THE GOVERNMENT’S REBUILDING Ireland Home Loan (RIHL) scheme was launched in January 2018 with funding to the tune of €200 million over a three-year period to provide loans for first-time buyers.

There have been fears the initiative could be shut down due to a lack of funds, and figures released this week have shown that almost €50 million was paid out via the scheme in the first three months of this year alone.

So far, €140 million has been paid out of the scheme meaning that roughly €90 million was spent in the scheme’s first year – far more than originally expected.

The RIHL is a government-backed mortgage for first-time buyers which you can avail of through your local authority. The buyers can use the loan to purchase a new or second-hand property, or use it for a self build. 

The uncertainty over funding has left some prospective home buyers in doubt over whether they’ll be able to access the funds, and the lack of clarity over the future of the scheme has persisted since early March.

Minister for Housing Eoghan Murphy told the Dáil this week that “further significant funding” is coming but admitted there has been a “lack of consistency” in how the loan scheme has been applied across local authorities in Ireland so far.

Rebuilding Ireland Home Loan

First-time-buyers can borrow up to 90% of the market value of the property, with maximum market values set at €320,000 in the counties of Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow, and €250,000 in the rest of the country.

The RIHL differs to other government schemes such as the Help to Buy scheme, which is an incentive for first-time buyers to get a tax rebate on a new build home. The RIHL applies to any home, and its broad eligibility criteria means that individuals with an income up to €50,000 or a joint income of €75,000 can apply. 

Initial government funding for the scheme was €200 million, but TheJournal.ie reported in March that the Department of Housing was seeking to sanction a further €600 million to keep it going over the next three years.

It has also emerged in recent months that applicants to some individual councils were left in limbo as their application was put on hold pending confirmation of further funding from the government.

In the case of one family TheJournal.ie spoke to, it meant they were facing losing out on their dream home as they couldn’t get the loan to secure the property.

Speaking in the Dáil this week, Fianna Fáil’s John Curran said: “Everybody knows the scheme is grossly oversubscribed, but the underlying reason for the delay is that local authorities do not know how much money will be provided this year or next year or for what period they might have to carry this loan.”

First three months of the year

Figures released by the Department of Housing this week showed that €47,741,744 had been paid out to help 280 first-time buyers purchase their home in the first quarter of this year.

The area covered by Dublin City Council issued the most amount of loans, with 68 applicants given loans worth €12,818,845.

The average loan paid across the country was €170,506.

In some areas, however, this was far higher. In South Dublin County Council (which gave out loans to 16 applicants), the average loan was €229,506.

Only one local authority issued no loans in this period, and it was Cavan County Council. Similarly, no loans were approved in this period. 

Furthermore, loans worth €46 million were also approved in the first three months of the year. This doesn’t mean, however, that all of these loans have been issued yet as successful applicants could be waiting until they’ve found the home they want to purchase.

‘Wildest expectations’

While uncertainty still persists over the scheme, Murphy has maintained that “all approvals that have been given will be honoured”.

“Every comfort has been given to local authorities, either in the circular I issued or through direct contact, that they can continue to issue and approve loans and that those loans will be honoured by my Department, working with the Housing Finance Agency,” he said.

Murphy said that, to March 2019, €139.9 million of the original €200 million had been drawn down in loans, leaving roughly €60 million left. 

The minister also denied there’d been any delay in issuing approvals to people, despite the experience of applicants in some areas.

Labour’s Jan O’Sullivan asked if those who’ve applied to local authorities that have proven slower to grant approval are now disadvantaged “in spite of being in the same circumstances as a person who received approval from a local authority that is quicker to grant approval”.

Fianna Fáil’s Curran added: “This is a good and necessary scheme, which has surpassed the Minister’s wildest expectations. We all want to see it succeed. We also want a level playing pitch.

The Minister stated that €60 million is available and he has repeatedly stated that he informed local authorities that loans will be honoured. Local authorities know that. However, they do not know when additional funds will come on line when the €60 million is spent.

Minister Murphy replied that the scheme had “very good timelines in place” but each local authority has its own credit committee and different demands placed upon it in terms of the number of applications it has received.

“Part of the review we carried out sought greater consistency in timelines across local authority areas,” he added.

There is still no confirmation as to whether further funding has been secured for the future of the home loan scheme.