Government Funds Local Authority Housing Scheme

200m will get you about 700 houses or 700 mortgages - not a lot for a lot really

But building them themselves will give a sustainable income with a non ridiculous rent for working people - paid back in less than 40 years

But the council doing something like this...better to pay some middle man company to manage rooms for the homeless in an hotel

Losty Dublin wrote: »

I can see some potential pro's out of this.

• It may force the main lenders to reduce their rates and some of their fringe costs. It may coax some vacant properties onto the open market as well as some of the private small time rental homes.
• It will make things easier for some people to escape from a long term rental trap.
• It will discourage sub prime lenders from entering the market.

However I can't see it being decisive enough to make a difference bar the last, which is something that the Central Bank can control to some extent everything. Also, given the chronic lack of housing in most sectors of the market none of these were badly needed acting upon and it will only serve to hurt the market in the mid term.

The government is going to be a subprime lender.
When the defaults occur, it will be swept under the carpet as always.
just give away the money and save on the admin.

I'm curious how the insufficient funds will work?

My partner and I were hoping to buy later in the year and while we should have no issues securing a regular mortgage, I'd love to be get one fixed at such a low rate!!

Graham wrote: »

This.

Nationally speaking, it’s not particularly significant and as such unlikely to have any substantial effect on house prices.

Possibly dumbest thing I’ve seen FG do in the last decade. And we’ve seen a lot.

They would’ve been far better off investing in O’Cualann housing, say.

Cookie_Monster wrote: »

Do they? That's about 42k gross, 19.7% high than average and 82% higher than min wage. Hardly the level of income you should be targeting for assistance
https://salaryaftertax.com/ie

For a one income family with very young kids? Of course they deserve help. Or I know a couple one on permanent contract on around 35k the other on around the same but not on a permanent, yet has been in the same job years. Do they not deserve help?! Of course they do!!!! Slaving away without a chance with the banks. Aging and missing a chance to settle down and have their own family. What hell that has been.
If someone is working their ass off every day, up at 5 am, home at 6pm but just falling outside of the banks crazy rules then yes they need help!
Come on!

We are looking seriously at the moment.
I wanted to take a year off work.

I wonder if I quit work then the other half's salary will be about right for this scheme.

We get a sweet low interest loan and just invest the money we have saved now at twice the rate the mortgage is.

I sat down to work it out last night but got interrupted. I'd love a year off work and a nice low interest mortgage.

And me quitting gets us refused from the banks we need too ha.

BattleCorp wrote: »

I'm not hitting out at you but you see the problem here. This product isn't meant for the likes of you. You would essentially be taking advantage of a system that wasn't meant to be used that way. Not your fault by the way, it's natural to want to do as well for yourself as possible.

It's meant for anyone who qualifies for it.
If I make certain changes I can qualify for it.
My taxes are paying for it, so I don't feel guilty benefitting from it. After all I'm paying more towards the cost of it than most who will be on it.

Darkglasses wrote: »

Important general note on these mortgages which I haven't seen mentioned yet - the underwriting process for CoCo mortgages does not take any account of the number of children or dependents you have in calculating your borrowing capacity, it is purely based on income and loans repayments/alimony if applicable. If this was a factor in your refusal with banks, this is very likely to be a good route for you.

Yes, I agree. A lot of ppl with 2+ children have very little chance to get bank mortgages. They are also the ones who‘d need to stay in a certain locality due to schools etc. A bit of security for their family is necessary. Having said that though, I think this scheme is a halfcooked solution as it does nothing to supply more houses into the market! The Government should support self-builders - at the moment you pay premium building costs... and they keep rising! Also, some planning restrictions in rural areas need to be looked at as case-to-case not a blanket „you didn’t grow up in this area, you are not allowed to raise your own family here“. A lot of „blow-ins“ struggle with this, as they wouldn’t get planning in certain areas, therefore they can’t even purchase sites near town boundaries to successfully apply for planning. Moreover, the CoCo‘s could support renovation works for currently inhabitable houses. I know that ppl prefer low-energy new builds, but there are older builds lying idle and some of them could be brought up to be in liveable condition within a few months. If families are willing to live in these houses, why not support them? The Government scheme also would need to offer a tax-funded mortgage on the condition, that the purchased property will be a long-term family home and if ever sold, there will be a claw-back of a certain percentage.

BattleCorp wrote: »

How will the Government not lose money on what is essentially an interest rate that will more than likely turn out to be even lower than the tracker rate over the lifetime of the mortgage.

The government will presumably finance this with some long term bonds, so they are unlikely to lose money on the interest charged. The banks can't compete with government borrowing costs.

Where they (we) will lose out is if borrowers won't or can't repay their loans and default. Some of the default rates mentioned in the media for existing government schemes are shocking.

I think people are misinterpreting why people will be eligible for these- it's not about having bad credit, it's about having a legitimate reason why banks won't lend to you but you're still a good bet.

I've friends with a county council mortgage. They've both been working extremely hard, and consistently, for over a decade- which they had to, and were able to, prove via tax returns- but didn't have permanent jobs, and didn't work in a field where people get permanent jobs. They had saved a deposit while paying exhirbetant rates twice what mortgage repayments would be. They'd been evicted twice in the year before they got their mortgage due to one landlord refurbishing to hike up prices even further and one being forced to sell by NAMA. They now have security, more manageable payments, and a lot more certain future.

They contribute to society, they work very hard, they pay tax and they are entirely unlikely to default on any loan. There should be a scheme for people like them that gives certainty. I've worked in the charity sector which is another area where people often have fixed term contracts, depending on funding, for years and years and years. I work in a sector where if I lost my job tomorrow I could be confident of getting a new role within a number of months, but where there is also an aversion to making people permanent. I've got a mortgage, but a slight change in our circumstances would have made that harder.

The CoCo mortgages seemed to be v rigorous and involved a lot of jumping through hoops and proving affordability. I agree this new scheme will in no way help supply, but I think it sounds like a useful way to help some v hardworking people gain security in a very uncertain market.

OscarBluth wrote: »

I think people are misinterpreting why people will be eligible for these- it's not about having bad credit, it's about having a legitimate reason why banks won't lend to you but you're still a good bet

Banks issue mortgages using a rules-based system, regulated by the central bank.

Under this system civil servants (presumably) will issue mortgages using a rules-based system, regulated by politicians.

You are arguing that the politically-governed rules-based system is better than a central bank-regulated rules-based system.

That is a difficult argument to make.

The whole point of the central bank rules is to prevent the State (well, taxpayer) being lumbered with bad private sector debts. This proposal completely undermines that.

KellyXX wrote: »

It's meant for anyone who qualifies for it.
If I make certain changes I can qualify for it.
My taxes are paying for it, so I don't feel guilty benefitting from it. After all I'm paying more towards the cost of it than most who will be on it.

Sounds a bit ...."snobby"

A 10% deposit is required here so a minimum of circa €25-30k in most cases, as im sure we all know saving this amount is bloody hard, so to imply people benefiting from this scheme are paying less tax than you or whatever the above means is pure nonsense, from reading some comments it seems some posters have already painted the picture of the kind of people who will be availing of this scheme if you catch my drift.

I'm no scrounger, I have paid 60k in rent in the last 5 years and have a (Dublin) deposit sitting ready to go that i have worked by ass off to save, I work full time and pay my taxes, Yet the banks cant make us a realistic mortgage offer because my wife is self employed so apparently we cant afford it despite paying €1700 every month to Sherry Facking Fitzgerald, we deserve a break, if this is our break so be it, I'll apply anyway and see what happens.