Home loans approved under Rebuilding Ireland ‘will be honoured’

Eoghan Murphy says local authorities should have no hesitation in drawing down funds

Minister for Housing Eoghan Murphy. Photograph: Tom Honan

Minister for Housing Eoghan Murphy. Photograph: Tom Honan

 

All home loans that local authorities have approved under the Rebuilding Ireland scheme “will be honoured and there should be no hesitation in facilitating drawdown”, the Minister for Housing has said.

Eoghan Murphy told the Dáil there is “more than enough funding” in the scheme to honour the approvals granted by credit committees and local authorities.

He said “I am very sorry for the confusion that is there in some local authority areas”, but “the scheme is not frozen” and the confusion was not because of anything the Department of Housing was doing or the Housing Finance Agency, which provides the funding to the city and county councils.

He was in talks with the Minister for Public Enterprise and the Central Bank on the 2019 allocation and he said a decision on that was “imminent”.

The Minister was responding to Fianna Fáil housing spokesman Darragh O’Brien, who highlighted the concerns of applicants who could not get the funds despite their loans being approve, pointing in particular to South Dublin which had not permitted a drawdown since December, and Waterford.

Mr O’Brien said that many people had made an offer on a house could not draw down the loan and were being told by local authorities that the money had been spent and they were waiting for their 2019 allocation.

But the Minister insisted that “all approvals that have been given to date by credit committees and local authorities will be honoured and there should be no hesitation in facilitating drawdown”.

‘Angry’

He said “it makes me very angry when I hear of a couple or individual who have been given approval and then can’t draw it down” and be able to follow through on homes they have put an offer on.

More than 700 applicants have taken out a mortgage with the Rebuilding Ireland home loan scheme the Minister launched in February last year with €200 million in funding more than three years.

It aimed to provide a new line of mortgage finance including fixed rates over a 25 to 30-year period, to credit worthy first-time buyers who could not access finance from financial lender.

By the end of January €106 million had been drawn down which was 53 per cent of existing funding, when €66 million would have been expected at that point in the three years.

Mr Murphy said that by March €127 million of the €200 million had been drawn down by the Housing Finance Agency but local authorities had drawn down just €85 million of that.

Mr O’Brien called on the Minister to issue a directive to local authorities such as South Dublin and Waterford to draw down the funding. He said that in September the Department was saying the take-up was slow but it turned out that “monitoring is a big problem between the Housing Finance Agency and the Department”.

Mr Murphy said he had issued a circular to local authorities that they could still process applications because there is “more than enough funding” available.