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22-01-2018, 10:09   #1
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Government Funds Local Authority Housing Scheme

The government will be providing 200m to local authorities this year to provide low interest mortgages (2%-2.25% over 25-30 years) for people who have been denied by the banks (at least twice). Sole applicants must earn no more than 50k, with couples earning no more than 75k. If buying in Dublin, Cork or Galway then you could borrow up to €320k.

I don't really understand this. If you're a couple and two banks has deemed you're not eligible to get a mortgage, then you can go to your local authority and get a potentially larger mortgage for a lower interest rate. While someone else in similar circumstances but who may have been more prudent financially, is rewarded with a lower mortgage by the bank at a higher interest.

Am I missing something?
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22-01-2018, 10:22   #2
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Sounds the same as the old home choice loan scheme that was set up and afaik is still going. Apparently they issued less than a dozen mortgages.
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22-01-2018, 10:26   #3
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yeah i was wondering this to i called dcc they had an eligibily list and that does sound so wierd oh your not financially viable and a danger but we will give you money but not someone with a good record hmmmmm
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22-01-2018, 10:34   #4
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Assuming they can be discerning about who they approve for these mortgages, I imagine they're not going to lend to people who have terrible credit ratings, but might lend to those who are prudent financially but have fixed outgoings such as childcare which means they don't meet the banks disposable income requirements. Or one applicant might have health issues which prevents them from obtaining life assurance, thus stopping them from getting a mortgage.

This seems a bit like the affordable housing scheme that was around a while back. A friend of mine was earning €35k and applied for that scheme, helping her buy an apartment that she could never have gotten approval to buy otherwise. I think the apartment was €280k, a two bed, and she got a mortgage for €140k and the council paid for the other half. Ten years later he has rented out the second bedroom, never missed a mortgage payment and has paid off a chunk (or perhaps all? I'm not sure) of the council's investment in the house.

Having said all of that, I think they'd be better off trying to fix the supply issue with the €200 million they're spending on this rather than increasing the amount of people in the market for houses. I suppose it might take some people out of the rental system, which may have a trickle on effect of reducing the attractiveness of property to cash buyers, but a scheme this small isn't going to make much of a dent in that.
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22-01-2018, 10:35   #5
Eric Cartman
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every 3 bed semi within 1 hour of the m50 just became 320k
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22-01-2018, 10:42   #6
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Originally Posted by Eric Cartman View Post
every 3 bed semi within 1 hour of the m50 just became 320k
Every 2 bed apartment more like
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22-01-2018, 10:43   #7
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That's for sure - more potential buyers for the same inadequate supply .....
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22-01-2018, 10:47   #8
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FFS. This does nothing for supply, just drives up prices.

Put the 200 million into building new houses, not property owners pockets.
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22-01-2018, 11:38   #9
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Good ****ing god......

The 9 most terrifying words in the English language: I'm from the government and I'm here to help
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22-01-2018, 11:41   #10
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I'm just above the threshold(s) and currently in the bidding process for a house in Dublin which is looking competitive and unlikely to succeed. This has me really worried what may lay ahead at this low price entry point into the market.
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22-01-2018, 12:00   #11
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Originally Posted by Bargain_Hound View Post
I'm just above the threshold(s) and currently in the bidding process for a house in Dublin which is looking competitive and unlikely to succeed. This has me really worried what may lay ahead at this low price entry point into the market.
Ditto. I had an idea of what I was targeting, years of saving leading up to what I hoped would be a purchase later this year.

Now I'm a lot less sure I'll be able to afford what I hoped I could, if the market 'welcomes' hundreds of people with bigger mortgages that I can access, into this range of the market (200-300k).

How stupdendously unfair, right?
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22-01-2018, 13:43   #12
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I don't get this either. None of the current rules seem to apply either - someone with an income of 40k potentially getting a mortgage of 200k?! The interest rates are much better than what you'd currently get from a bank too, and fixed for the duration of the loan. It seems really unfair. Imo if someone is getting rejected by multiple banks for a mortgage then there's usually a good reason for that, and that's not the council's problem to sort out.
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22-01-2018, 13:45   #13
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Originally Posted by LookingFor View Post
How stupdendously unfair, right?
Things like this usually are seen as unfair since they benefit some people at the expense of others.
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22-01-2018, 13:51   #14
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It's just...nuts.

If you're in the 50-100K bracket, and you've been working toward a first house, saving and scraping...little did you know you were also working so that, via your tax euros, someone earning less than you can potentially now come in now and outbid you on a property.
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22-01-2018, 13:55   #15
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Back to square one for a lot of people.

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