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First Home Scheme - Anyone using it?

  • 12-07-2022 4:49pm
    Registered Users Posts: 3,999 ✭✭✭Padre_Pio

    I saw an announcement this week of the First Home Scheme, which aims to bridge the affordability gap between what buyers can get under current lending rules and the actual cost of a house.

    Basically, the scheme pays the buyer a certain percentage (up to 30% if HTB is not used) of the house value, and they acquire equity in the house. The buyers pay this equity back when the house is sold, or at any time. Service charges of a few % apply after year 6.

    I had a look into it but the lending rules are very strict. Must be a new build, but not a self build. Must be a first time buyer. Price ceilings set based on county.

    I found the price ceilings to be ridiculously low. 350k maximum for where I'm looking to buy, which means only those buying the cheapest houses in an estate may be eligible. I'm sale agreed at 370k (with an exemption), so I called up to see whether there was wiggle room, but there's none to be had. Either you're eligible or you're not.

    Does anyone have any thoughts or experiences with this?


  • Registered Users Posts: 3,090 ✭✭✭Browney7

    Effectively it's a way of boosting the number of buyers with a decent warchest to support new build property prices and land values. It will be interesting to see what type of houses/units are delivered in the next year or two.

    An interesting feature of the scheme is that it is simple interest that is applied to the state's share. Based on this, there is no real incentive to pay off the "service fee" from year 6 onwards as you aren't penalised for not paying the fee. The "penalty" is that if house prices rise you have to pay back a higher euro amount to the state.

    It's interesting to note that you have to max out your 3.5x salary loan amount before you can apply so it will be interesting to see who takes up the scheme. Some of the caps are "interesting" to say the least. 450k for an apartment in the limerick city local authority area being one of them. 500k for new apartments in the Dublin areas affectively caps out the combined salary for a mortgage "unit" (couple or individual) at 105.7k per annum (500k cap minus 30k HTB minus 100k FHS (20% max if availing of HTB))

  • Registered Users Posts: 29 DirectorKrennic

    Hi all, I am just wondering if anyone has actually been able to submit an application for the 'First Home Scheme' yet? The reason I ask is, I was able to successfully submit all my information with no issues for steps 1-5 (I had to hold my passport up to my laptop camera and do a face scan also which all worked fine - the website is impressive enough to be honest) but I am unable to complete step 6 'Submit your application.' I was able to sign, they sent an email to me which then took me to DocuSign (was able to sign no problem here either) but step 6 won't work for me. I did notice it does say for step 6 on the site that if you have any issues you can call then so I'll do that on Monday at 9am if I can't submit by then. Wishing all the fellow first time buyers out there the best of luck with the house search. I won't be buying in Dublin personally. I notice if you don't use HTB the Shared Equity Scheme allows for a 30% share with the Government so I might use that option as I won't get as much back with HTB as most people do because I'm single. What do people think of the scheme and the site so far? I found an apartment I'd like to buy so fingers crossed. I would love to have my own place in the next few years but due to lack of supply I know I have to be realistic. I've saved E32,000.00 personally but I know if I had more it'd be better. I'll keep saving away anyway I'm rambling now....

  • Registered Users Posts: 29 DirectorKrennic

    Hey all just a quick update, about an hour after completing most steps I got an email saying my documentation had been reviewed and I was then able to log in and submit my application. Fingers crossed. I'd love to be a homeowner!

  • Registered Users Posts: 26 Arun Thomas

    Anyone know at what stage should I apply for this scheme.There is a page to fill up the address of the property

  • Registered Users Posts: 3,999 ✭✭✭Padre_Pio

    I emailed Darragh O'Brien's office and asked about the price caps:

    "The Scheme uses regional price ceilings based on the median prices of new-build first-time buyer homes. This is to temper any inflationary pressures and to target support at the lower part of the price distribution in each area

    The setting of the initial First Home Scheme price ceilings has been informed primarily by an analysis of the most recent published CSO data, specifically the national Residential Property Price Index (RPPI), together with a review of current market data and sales prices for new homes by first-time buyers."

    And why apartments have a higher ceiling than houses:

    "In 2021, the median price of a new house was €355,000, and the median price of a new apartment was €415,000. This difference is reflected in the price ceilings of the First Home Scheme."

    Gotta say that I don't really agree with this.

    The house vs apartment is completely skewed, seeing as apartments are overrepresented in areas where housing is most expensive, so of course the average apartment price will be high.

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  • Registered Users Posts: 29 DirectorKrennic

    The price went up for the place I was looking to buy so I won't be proceeding with my application for now. Just going to try save hard for the next 6 months and see if supply of new builds improves. I got my hopes up for a new scheme in Louth but it's sold out. If anyone sees any new builds (outside of Dublin, Kildare and Wicklow - I won't afford them) please let me know! Good luck with the saving and house finding people. :)

  • 100% agree with this. I came here entirely to find out why the price limit for an apartment in Dublin is €500,000 but for a house is €475,000. It seems totally illogical - unless they want to promote the building of apartments. It's more like a handout to developers who recently have been complaining of the supposedly high costs of building apartments as opposed to houses. Indeed, according to the following article the government is under pressure to interfere in the supposedly free market to ensure completion of apartments so this higher value for apartments is no doubt to incentivise people to purchase them:

  • Registered Users Posts: 3,247 ✭✭✭RichardAnd

    "It's more like a handout to developers who recently have been complaining of the supposedly high costs of building apartments as opposed to houses"

    This. As with just about anything that the state cooks up these days, this scheme can be summarised in three words: It's a grift.

  • Registered Users Posts: 2 NicG22

    So I’m actually using this scheme at the moment but the way it was done in my county was that they’ve actually purpose built 2 estates solely for this scheme and you had to apply through the local authorities website. Some houses are more expensive than others so the houses you qualified for depended on your purchasing power. The scheme itself is appearing to be a great asset however a major issue I’m having at the moment is actually from the developers company. I know other houses that they have built and the process that buyers went through with them but because these houses are part of the scheme we’ve been given absolutely no opportunity for changes even though we are still buying and taking out a mortgage but we are being treated as though this is social housing and you’ll just get what you’re given kind of situation. All houses will be generic, no choice of carpet colour, tile colour, kitchen colour, nothing.

  • Registered Users Posts: 2,165 ✭✭✭BKWDR

    The First Home Scheme has nothing to do with Local Authorities though.

    The affordable purchase is done with the Local authority and they give you an equity on a property that they are bringing to the market and there's no fee or charges on the equity amount.

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