MINISTER FOR HOUSING Eoghan Murphy has said local councils are being asked to show “flexibility” to people applying for a government-backed mortgage scheme during the Covid-19 pandemic.

He said that councils should “extend time periods as necessary” to people who may be experiencing difficulties arising out of the Covid-19 restrictions through the Rebuilding Ireland Home Loan (RIHL) scheme.

It comes as the latest figures show that €177 million was paid out through the scheme to allow first-time buyers secure mortgages last year. Under the scheme, applicants can get up to 90% of the market value of the property if deemed eligible. 

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.

You apply for this scheme through whatever local authority you’re seeking a mortgage in, and the individual council will decide on the application and issue the mortgage if accepted. 

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. 

However, the popularity of the scheme exceeded the government’s expectations – and, crucially, the funding that had been set aside for it. 

The initial funds provided by the government were €200 million, but TheJournal.ie reported in March last year that the Department of Housing was seeking to sanction a further €600 million to keep it going over the next three years.

The uncertainty over the future of the scheme led to some families being left in limbo while they waited to hear if they’d secured a mortgage to purchase a home. 

Furthermore, in a move described by the opposition as “cold, harsh and sneaky” prior to this year’s general election, the interest rates for the scheme were also raised. 

Future funding of the scheme was secured, however, late last year. 

In response to a parliamentary question last week, Minister for Housing Eoghan Murphy said that an increase of funding of €363.6 million was granted for 2018-19 while an additional €120 million had been secured for 2020.

Murphy said it had been “recognised” that current applicants to the scheme may be experiencing difficulties arising out of the Covid-19 pandemic. 

These could include “accessing financial documents; property visits and valuations; solicitors visits, etc.”

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“Therefore, local authorities are being asked to show flexibility when dealing with applicants at all stages of the Rebuilding Ireland Home Loan process from application through to approval, drawdown and (where relevant) appeal and should extend the time periods as necessary to accommodate those who may be experiencing difficulties arising out of Covid-19 restrictions,” he said.

For existing applicants, local authorities are advised to ensure that final loan offers are made based on up to date financial and employment data from applicants, as appropriate, having regard to the implications that Covid-19 has had for many businesses and employers.

In a separate answer, he said that local authorities should also be “prudent” with their lending and said a decision on whether to withdraw or vary a loan offer is one for each local authority. 

Murphy also pointed to the latest statistics from the Department of Housing which give a breakdown of how much was approved and paid by the scheme last year by local authority.

There were over 1,000 applicants granted and allowed to draw down a loan for their mortgage under the scheme last year. 

Of these, €177 million was given out in mortgages to applicants to use to purchase their home. Dublin city had the highest number of applicants paid out, with 50 in the last quarter, alone.