Councillors question high refusal rate for Government-backed Home Loan scheme

Councillors question high refusal rate for Government-backed Home Loan scheme

Only 43% of people who are applying for Rebuilding Ireland Home Loan scheme are being approved by Cork County Council, a figure described as “abysmal” by one councillor.

The scheme allows first-time buyers to borrow up to 90% of the market value of a property but they must have a deposit of 10% and an income of not more than €50,000 for a single applicant and €75,000 for joint applicants.

The scheme was designed to allow first-time buyers that earn too much to be considered for social housing but not enough to secure a mortgage from commercial banks to buy a house.

Councillor Des O’Grady (SF) said he is “appalled” by the figures.

“There was much fanfare from the Government when this was announced. The Council has received 197 applications. 85 approved were approved, that’s just a 43% approval rate. That’s a shocking rate. The results are abysmal. It’s not going to put any dent in the housing crisis.” 

Deirdre Forde (FG) queried whether applicants are getting enough support to complete their applications.

“I’d love to know the reasons [people are refused]. Have they not got the proper advice? A lot of people don’t have the wherewithal to fill out complicated applications properly.

Seamus McGrath (FF) said: “The refusal rate is quite high. We assume they are being refused for valid reasons but maybe we need to do more on working with people at the outset to identify valid applications. There is no point in getting people’s hopes up,” he added.

According to Michael Creed (FG) the scheme needs to be less stringent in terms of the load criteria.

“The scheme is a good scheme but some people are falling through the cracks. It’s a bit too rigid, there needs to be more flexibility,” he added.

County Hall director of Housing Maurice Manning said the scheme is subject to the same criteria as a commercial bank loan.

“The important thing to remember is all applicants to that scheme are subject to normal loan criteria and must show a capacity to pay. It isn’t available to everyone and the refusal rate has come down since it was offered.” 

A County Hall spokesperson said car loans, credit cards, personal loans and job security are all considered on applications.

The maximum loan allowed under the scheme is €288,000 - 90% of the maximum property value of €320,000.

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