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Scheme to help homebuyers in Ireland has been criticised as having too many hurdles

Dublin: The local authority home loan scheme introduced by the government to help those struggling to get a mortgage to buy a house has been criticised as not being effective enough. There is a serious allegation against the scheme that it only gives loans after accepting the application. There is also criticism that the housing agency, which is a part of this scheme, is conducting research on how not to give loans.

The scheme’s flaws were highlighted by the Department of Housing’s revelation that 59% of local authority home loan applications received in the last six months were rejected.

Figures provided by the Department of Housing to Social Democrats housing spokesman Cian O’Callaghan show that 515 of the 870 applications received up to the end of June had been rejected. The records also say that most of the applications received last year went to the ‘waste box’. In 2022, the scheme received 2,168 applications. Of those, the agency rejected 1,247.

The scheme allows loans of up to 324,000 to those who want to buy a house, depending on the area they live in. The housing agency evaluates applications, approves or rejects them, and forwards them to the appropriate local authorities. But rejecting most of the applications received defeats the purpose of the scheme.

At the same time, the government has been attempting to make the scheme more appealing, but none of it has been successful. The eligibility criteria were expanded earlier this year, and €250 million was set aside for the scheme.

Cian O’Callaghan points out that the loan limit is not keeping up with rising property prices, and he calls for the scheme to be reformed soon. A family looking to buy a house in Dublin and elsewhere cannot afford even €3,60,000.

The housing department spokesperson clarified that applications are rejected for a wide range of reasons, including credit worthiness. The scheme requires that two banks have rejected the mortgage before applying for the scheme.

The department says that there is no evidence that the amount sanctioned by the local authority home loan is inappropriate. The department, on the other hand, explains that the project is being reviewed.

What exactly is a local Authority Home Scheme?

The scheme provides first-time home buyers with a government-backed mortgage through local authorities. This home loan is available nationwide through all local authorities. This is a loan with a monthly repayment schedule.

The scheme can be used to buy homes in Dublin, Wicklow, and Kildare with a total value of up to £360,000.

In the counties of Cork, Galway, Louth, and Meath, up to 330,000, in the counties of Clare, Kilkenny, Limerick, Waterford, West Meath, and Wexford, up to 300,000, and in other counties, up to 275,000 can apply in the scheme. Loan up to 90% of the property’s market value. The scheme provides mortgages for the purchase and construction of new or old residential properties. The interest rate starts at 3.35%.

With the restructuring of this loan scheme in March, more people are said to be benefiting from the scheme. This scheme is mostly availed by immigrants, including Indians. Although there are many objections, experts say that if you apply correctly, you can secure this loan. This loan scheme is beneficial not only for families but also for those living alone in the first years after arriving in Ireland. This loan is subject to the condition that any two commercial banks must have rejected the application before submitting the application to the local authority.

If the annual income is less than 70,000 euros for single applicants and less than 85,000 euros for joint applicants. You can apply for this scheme nationwide starting in March 2023.

FOR MORE INFORMATION https://localauthorityhomeloan.ie/

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