Fresh Start Principle

A Fresh Start principle applies for applications to State affordable housing and loan schemes.

This means that the following categories of persons are eligible to apply for the Local Authority Home Loan;

• Applicant(s) who previously purchased or built a dwelling/dwellings, together with a spouse, a civil partner or a person with whom he or she was in an intimate and committed relationship are eligible under the Fresh Start principle where this relationship has ended, and they have divested themselves of their interest in the previous dwelling/dwellings.
• Applicant(s) that previously purchased or built a residential dwelling/dwellings , but has been divested of this through insolvency or bankruptcy proceedings, are eligible to apply. However a separate assessment of creditworthiness will be conducted by the underwriters. This applies when the applicant has exited the insolvency/bankruptcy proceedings

Termination of Relationships - Separation/Divorce/Dissolution of Civil Partnership/Civil Annulment

In recognition of instances where an individual has undergone a separation/legal separation/divorce or otherwise and has relinquished their rights to the family home property, an exemption to the First Time Buyer eligibility criteria can be applied under the Fresh Start Principle.

In cases such as these, the applicant must meet all the following criteria (This will need to be confirmed by way of a solicitor's letter before drawdown of any loan):

• be separated/legally separated/divorced (i.e. their marriage or civil partnership or partnership has been legally or otherwise dissolved) under a Court Order or by a separation agreement.
• if there is no separation agreement regarding the breakdown of a relationship, a sworn statement should be obtained confirming: There is no formal separation agreement.
  • There are no court proceedings pending under family law legislation.
  • The position in relation to maintenance and other payments, if any.
• have left the family home property and retained no interest in it, and
• have divested themselves of any interest in any dwelling/dwellings, purchased prior to the separation/legal separation/divorce or otherwise.
• the property under the Local Authority Home Loan is the first residential property purchased since leaving the family home.
• where either party to a mortgage application is separated or divorced, the following details should be supplied with the application;
  • The extent of maintenance being received or paid by the applicant.
  • The circumstances under which the maintanence payments can cease (typically age of majority of dependent children and/or remarriage).
  • Details of any payment(s) to be made in respect of the removal of spousal/partnership rights to the existing family home or other property which could have a bearing on ability to repay the mortgage.
  • That no onerous conditions exist.

Insolvency/Bankruptcy

A person who has exited insolvency/bankruptcy proceedings and had previously purchased a dwelling/dwellings may still be eligible for Local Authority Home Loan if as a result of insolvency or bankruptcy they had to sell or had been divested of their home.

They must have exited insolvency/bankruptcy at least 12 months previously to be eligible to apply. Additionally, they must have a clean credit record for a minimum duration of no less than 12 months prior to their LAHL application. 

Where any of the persons making an application previously purchased or built a dwelling/dwellings  that person demonstrates, that they have sold, or have been divested of, that dwelling/dwellings as part of a personal insolvency or bankruptcy arrangement or proceedings or other legal process consequent upon insolvency, then the previous purchase or building of the dwelling/dwellings concerned shall not render the applicant(s) ineligible for a Local Authority Home Loan.