Advice Desperately Needed – Mid 20’s Male Renovating a House Under the Vacant Property Refurb Grant

shane9

Hi All, I am coming on here to hopefully get some advice in relation to renovating a property under the Vacant Property Refurbishment grant (I’m not sure where else to turn!).

In 2023 I was in the fortunate position to be able to purchase my first property - a three-bedroom home. This property had been vacant for a period of two plus years before I purchased it.

After months (and months) of putting together documentation and jumping through loops for the council, I have received approval from the council for a grant of 70’000 euro to renovate the property.

In total I will be putting in approximately 120k euro to completely renovate the home – the 120k euro is made up of 50k euro offered by the bank as part of the mortgage for renovations/home improvements and of course the 70k euro from the grant. The work will hopefully be completed by a one-stop-shop building contractor. This will hopefully bring the home from a BER rating of E to a minimum BER rating of B2.

This is all fantastic, but here is the issue!!!! For anyone who has researched the grant online, I’m sure ye have heard of the extreme backlash the government have received for the difficult conditions of the grant – the MAIN issue being that the council do not reimburse you the 70’000 euro until there is proof (transfer of funds/payment for work) that you have paid the contractor in full for the works completed.

I, like many many other people across the country do not have 70k cash lying around to throw at renovating a home. However, the council will not pay over the money until they receive proof of payment for the works being completed?

Does anybody have any advice on what my options are here in terms of financing this 70k until the grant comes through? Has anybody else who has gotten the grant approved had the same issue? All advice is hugely appreciated thank you!

Nody

Mod:

Hello @shane9 welcome to boards and I think you'll find this forum more suitable for your question rather than Investment & Markets. Please note a new charter is in effect.

sydthebeat

Like many grants, you need to have the ability to pay upfront and reclaim the grant afterwards.

So you might need to phase the work so the 50k you have is spent on "grant works" for you to reclaim.

Otherwise you'll need to short term finances the 70k by means of loans.

There have been posters here who have gotten receipts from contractors in the promise of payment after the grant is received, but I would not imagine that scenario is available for many

shane9

https://www.boards.ie/discussion/comment/121801183#Comment_121801183

Thanks for your comment! Could you please explain this? One of the conditions of the county council to hand over the grant in the end is as follows -

'Further to your approval and in order to draw down the grant in the future we will require that you be set up as a customer with our finance department. I have attached a supplier set up form which needs to be filled out in full. We will also require a bank statement header showing the BIC/IBAN and address of the bank and your own address. Please ensure the bank statement you are submitting is the same bank statement that the project costings will be paid from'.

My understanding of this is that I need to send them the details of the bank account which will be used to pay for the funds, which will be the same bank account that they reimburse with the grant value of 70'000 after they check that the full amount of funds have been transferred to the building contractor. Going back to my original point, I do not have 70k to transfer the funds to them and I do not want to go down the route of taking out more loans to cover this.

Thanks a million again!

shane9

https://www.boards.ie/discussion/comment/121801190#Comment_121801190

Thanks for your comment! One of the conditions of the county council to hand over the grant in the end is as follows -

'Further to your approval and in order to draw down the grant in the future we will require that you be set up as a customer with our finance department. I have attached a supplier set up form which needs to be filled out in full. We will also require a bank statement header showing the BIC/IBAN and address of the bank and your own address. Please ensure the bank statement you are submitting is the same bank statement that the project costings will be paid from'.

My understanding of this is that I need to send them the details of the bank account which will be used to pay for the funds, which will be the same bank account that they reimburse with the grant value of 70'000 after they check that the full amount of funds have been transferred to the building contractor. Going back to my original point, I do not have 70k to transfer the funds to them and I do not want to go down the route of taking out more loans to cover this.

Thanks a million again!

dmakc

I'm sure some banks must have a bridging loan department for this purpose. 4.5% x 70,000 for 6 months of works would hit you for EUR 1,500 interest though

gipi

Banks don't issue bridging loans any more, haven't done since 2008.

dmakc

https://www.boards.ie/discussion/comment/121801411#Comment_121801411

Interesting. I had got one on the business side recently but I take your point for housing

Calahonda52

https://www.boards.ie/discussion/comment/121801411#Comment_121801411

Brought in by Central Bank on domestic side.

One issue here for the OP is what the LTV is on the property at each stage in the project, and what additional security may be required/available

eg: House cost 200k

Purchase mortgage: 150k

LTV 75%

What will the property be worth on project completion is the key question

Calahonda52

https://www.boards.ie/discussion/comment/121801183#Comment_121801183

This only applies to SEAI administered grants which this is not, since the OSS are SEAI approved, as are the contractors

shane9

https://www.boards.ie/discussion/comment/121801455#Comment_121801455

A family member sold me the property for 130k - purchased it as 130k for a 3 bedroom property in the current market is almost unheard of & prices are only continuing to rise. I was aware that the property would be eligible for the 70'000 euro grant. Therefore overall I should be getting great value for a property that is going to be a minimum of a B3 rating. The LTV is greater than 80% as I'm a first time buyer. All going to plan with financing the property, once the property is completed renovations it will be worth approximately 250k considering the total renovations will amount to 120k. Just need to figure out the funding of the 70k part is all and come to agreement with the building contractors.

What payment set up do building contractors usually go with do you know?

shane9

https://www.boards.ie/discussion/comment/121801455#Comment_121801455

A family member sold me the property for 130k - purchased it as 130k for a 3 bedroom property in the current market is almost unheard of & prices are only continuing to rise. I was aware that the property would be eligible for the 70'000 euro grant. Therefore overall I should be getting great value for a property that is going to be a minimum of a B3 rating. The LTV is greater than 80% as I'm a first time buyer. All going to plan with financing the property, once the property is completed renovations it will be worth approximately 250k considering the total renovations will amount to 120k. Just need to figure out the funding of the 70k part is all and come to agreement with the building contractors

Furze99

https://www.boards.ie/discussion/2058337318/advice-desperately-needed-mid-20-s-male-renovating-a-house-under-the-vacant-property-refurb-grant

Frankly, this is a problem of your own making. It is very clear in the T&Cs of these grants that you pay all invoices first and then get any grants afterwards. That's how they all work.

Nor am I aware of any real backlash on this aspect as it's well understood. What some people are unhappy about is the 13 month deadline to get works completed due to shortage of tradespeople.

You'll need to get a personal loan from bank/ CU or a loan from family etc.

DOCARCH

Mod Note: Threads merged. No need for two threads by same poster on same subject!

sydthebeat

page 11 of the grant scheme outline:

Prior to the grant being paid:

- in cases where approval in principle was granted, proof of ownership must be provided before the grant can be paid. 

- in respect of a property that is being made available to rent, evidence that the applicant has registered the tenancy with the Residential Tenancies Board (RTB) is required.

Prior to the grant being paid, the local authority will require evidence such as appropriately detailed invoice(s) for the completed works. The local authority will conduct a final property visit to review that the work has been completed in-line with grant application and as vouched in the invoiced documentation provided. Once the local authority is satisfied, the grant will be paid. 

shane9

https://www.boards.ie/discussion/comment/121803958#Comment_121803958

Thanks a million for the comment! Much appreciated.

Water John

Credit Union may be more willing to consider the issue, temp short term loan.

shane9

https://www.boards.ie/discussion/comment/121804345#Comment_121804345

Thanks a million! Will definitely look into this

Mellor

If the grant is for specific works, could those works be staged first?

Where you pay initially with your €50k investment, and claim say €40k in grant works. Then use that to complete another €40k of work, claiming the remaining €30k. Using that to complete the works.

Would avoid loans or the like.

shane9

https://www.boards.ie/discussion/comment/121805170#Comment_121805170

Yeah that maybe could be an option, however the council won't pay out the grant in stages. They will only pay the whole grant out for 70k once all works are completed. Might double check with them on that though thanks for your suggestion!

jojobrowne12345

Hi all,

Jumping on this thread- i am eligible for the scheme but my builder said he wasnt comfortable signing off on my cost of works estimate for my application- do anyone know if i can do this myself?

I'm trying to get the application going to DCC because im burning a lot of time here on an empty house and don't want to do any work before a site visit from the scheme rep. in case i influence the grant approval.

appreciate any feedback. thanks,