More than half of applicants for a government home loan plan rejected

by



[ad_1]

More than half of applicants for the government’s affordable home loan scheme have been turned away, according to new figures.

The Housing Department said 1,542 valid applications for a rebuilding home loan in Ireland had been received as of the end of November, of which 827 had been rejected and 715 approved.

The scheme, which launched in 2018, is aimed at first-time buyers who have a deposit and the ability to pay a mortgage, but who have not been successful with other lenders in obtaining a mortgage.

The Housing Agency offers a central support service that evaluates Rebuilding Ireland Home Loan applications on behalf of local authorities and makes recommendations to authorities to approve or reject applications. These recommendations are then considered by the credit committee of each local authority, which issues decisions.

While the Covid-19 pandemic may have had an impact, the government also increased the cost of the plan, increasing the rate at which applicants could borrow from 2% over 25 years to 2.75% over the same period.

According to the department, reasons for rejecting applicants include poor savings or financial management records, and applicants who do not demonstrate ability to repay.

Mike Allen, Focus Ireland’s director of defense, said the reduction in approvals could cost the government elsewhere. He said that while no Focus Ireland customer had been made homeless by not receiving a home loan for the rebuilding of Ireland, it did mean that some people were “stuck” in the rental market, adding that it was a “dilemma” for the goverment.

“There are no rules or regulations that say that you cannot pay that level of rent because it cannot be sustained, but when you look for a loan from the State to buy somewhere you ask all kinds of questions about what is sustainable,” he added . said.

Allen said that no one wanted to go back to the days of unsustainable mortgages, but that in some cases it may be more beneficial for the taxpayer to issue a loan rather than have to provide other supports.

“It is a genuine dilemma for the government,” he added.

The final decision on loan approval is a matter for each local authority and its credit committee on a case-by-case basis, and applicants who are rejected can appeal that decision to the local authority.

However, indications from some local authorities suggest that very few appeals have been advanced.

Dublin City Council said it has received 206 applications from January to November 2020, with 125 cases approved and an additional 27 approved after addressing concerns from insurers. Another 18 cases are currently being reviewed by insurers and 36 were rejected. Dublin City Council said only two of those 36 rejections were appealed, and in both cases, the initial rejection was upheld.

There have been significant drops in the number of loans approved elsewhere. Last year, the Cork City Council approved more than 70 loans, but had only approved four in the first half of this year. The Cork City Council approved 16 loans in the first half of this year, also below the amount awarded in the same period last year.

David Hall, CEO of Irish Mortgage Holders, said the situation with home loans showed that “there is no flexibility” and that the state would actually save money in some cases by making loans.

“Ultimately, there is no joint thought,” he said.

One area that made more loans than it rejected was the Cork County Council, which received 118 valid full applications, approved 56 and rejected 40. There were three appeals as of the end of November, two of which were rejected.



[ad_2]