The Minister for Housing Darragh O’Brien was today given approval by Government to amend the Local Authority Home Loan to include the renovation of derelict buildings.
As part of Housing for All, a newly expanded Local Authority Home Loan (LAHL) was launched in January 2022.
LAHL is a Government-backed mortgage for those who cannot get sufficient funding from commercial banks to purchase or build a home. It is available nationwide from local authorities for first-time buyers and fresh start applicants.
The loan can be used both for new and second-hand properties, or to self-build. It can also be used for Affordable Housing and Tenant Purchase Schemes.
Currently, only habitable properties meet the property eligibility of the Local Authority Home Loan (LAHL). Conversely, both vacant and derelict properties can potentially qualify for the Vacant Property Refurbishment Grant (VPRG), of €50,000 and €70,000 respectively. It is noted that the VPRG can only be drawn down after the relevant works have been completed.
It is intended to extend the LAHL to cover purchase and renovation of non-habitable homes that are potentially eligible for the VPRG, thus plugging any gaps where insufficient finance is available. It will take a number of months to develop this and it is expected to be in place from 2Q 2024.
The LAHL provides fixed rates for up to 25 or 30 years with a fixed interest rate over the term of the mortgage of 4% and 4.05% respectively.
The LAHL is not bound by the macro prudential rules and therefore the Loan to Income ratio can, in many cases, exceed the 4 times income allowed under Central Bank rules, subject to a maximum debt service to disposable income ratio of 35%.
Applicants between the ages of 18 and 70, subject to income limits, can borrow up to 90% of the market value or purchase price of the property subject to scheme house price limits.
Maximum market values of the property that can be purchased or self-built are:
€300,000 in Clare, Kilkenny, Limerick, Waterford, Westmeath and Wexford, or
€360,000 in Dublin, Kildare, and Wicklow, or
€330,000 in Cork, Galway, Louth and Meath, or
€275,000 in Carlow, Cavan, Donegal, Kerry, Laois, Leitrim, Longford, Mayo, Monaghan, Offaly, Roscommon, Sligo and Tipperary.
The Income limits for individual and joint applicants are €70,000 and €85,000 respectively.