Fingal stops accepting applications for Rebuilding Ireland home loan

North Dublin council has already approved loans worth €57m – or more than 25% of total fund available

Fingal County Council has stopped accepting applications for the low-cost Rebuilding Ireland home loan, having already approved more than 25 per cent of the national €200 million fund, which was due to last for three years.

This is despite the Department of Housing, Planning and Local Government stating that the scheme is in “full operation”.

Fingal, which covers areas including Swords, Blanchardstown and Malahide on Dublin’s north and west sides, has been one of the most active councils offering the loans thus far, with some 534 applications received to date.

Of these, loans worth €57 million have been approved. Given that the total fund size for the home loan scheme was just €200 million, if all these loans are drawn down, then Fingal alone would account for more than 25 per cent of the total fund.

Of the loans approved in Fingal, some 89 have been drawn down, at a total value of €19.7 million or an average of €221,348.

A spokesman for the council said it was waiting to see if it would get more funding before recommencing the scheme. “Fingal County Council has ceased accepting new applications under the Rebuilding Ireland Home Loan Scheme until such time as the Department of Housing, Planning and Local Government confirm the availability of further funding for the scheme,” he said.

Fingal’s assertion however, runs contrary to the department’s view. “The department has confirmed with all local authorities that the scheme remains in full operation and that they should continue to receive and process applications,” a spokesman for the department said.

The department said it was currently in discussions with the Department of Public Expenditure and Reform, and Department of Finance, with regard to an extension of the scheme and additional funding.

First-time buyers

The loan scheme, which was launched in February 2018, allows putative first-time buyers to avoid Central Bank loan restrictions and lock in to low-cost interest rates of as low as 2 per cent over 25 years by applying for a home loan with their local authority. It is part of the Government's three-pronged approach to make homes more affordable.

Loans can be sought for up to 90 per cent of the value of the home, up to €320,000 in counties Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow, and €250,000 elsewhere.

Demand has been strong, with more than 4,000 applications so far, of which 1,722 were approved as of end February, with 575 drawdowns with a total value of €107 million (average of €186,086 per loan).

If all the approved loans are drawn down, based on the average loan value, this would come to some €320 million – far in excess of the €200 million total fund available. Duplications, however, whereby some applicants will have sought approval across various local councils, would likely reduce this figure.

And this is despite the fact that the scheme has had a poor approval rate, with the figures showing an approval rate of less than one in two so far. Factors which may have hindered approvals include the obligation to purchase a specific mortgage insurance policy, which can cost more than €100 a month extra, a figure that puts affordability out of reach for some potential buyers.

Fiona Reddan

Fiona Reddan

Fiona Reddan is a writer specialising in personal finance and is the Home & Design Editor of The Irish Times