Local Authority Home Loan Key Features
First Time Buyer Status
In order to qualify for the Local Authority Home Loan scheme, each applicant must be a first-time buyer (applicants cannot have previously, either individually or jointly, purchased or built on their own behalf, a residential property either in Ireland or elsewhere) or be otherwise eligible through the Fresh Start principle.
As an applicants you are required to declare that you are a first time buyer(s). You must provide your Personal Public Service Number (PPSN) and consent to authorise the Local Authority to conduct such checks as are necessary to confirm this, such as conducting a Local Property Tax check and Central Credit Register check.
Joint Applicant Status
For the purposes of a joint application, all applicants must qualify as first-time buyers except where an applicant is eligible under the Fresh Start principle. Joint applicants can be two or more persons who apply for a housing loan together.
- Proof of insufficient mortgage offer, taking into account the level of savings available to the applicant, from two regulated financial providers in the Republic of Ireland must be submitted as part of the Local Authority Home Loan application. The proof must be dated within 12 months of the application, and the amount must be equal to or less than the Local Authority Home Loan amount sought. Examples of acceptable evidence are:
- A letter from a regulated mortgage provider showing the amount you requested and were offered, and/or
- A letter from a regulated mortgage provider stating that your application is outside their lending criteria, and/or
- An online calculator output sheet from a regulated mortgage provider website, showing that you have insufficient borrowing capacity for the amount sought under your LAHL application.
- A letter from a mortgage broker firm confirming that you have been unable to secure sufficient mortgage finance from two regulated mortgage providers, with supporting screenshots or print outs of the attempts made.
- Each applicant must be aged between 18 years old and 70 years old
- Applicant(s) cannot have previously purchased a residential property in or outside Ireland, with the exception of applicant(s) qualifying under the Fresh Start Principle.
- Property ownership through inheritance does not impact on your eligibility to apply as a first time buyer, i.e. if you own a house that you did not purchase and have not previously purchased a home then you are still eligible to apply for the Local Authority Home Loan Scheme.
- You must intend to occupy the property as your normal place of residence.
- You must have a legal right to reside and work in the State. You must be able to demonstrate that they are habitually resident in Ireland. Furthermore, there are minimum periods of residence required for non EU/EEA applicants:
- All Irish citizens are automatically legally resident. They will also need to be habitually resident in Ireland to be eligible for assessment.
- UK citizens will be regarded as being legally resident in Ireland. They will also need to be habitually resident in Ireland to be eligible for assessment. (This accords with the Common Travel Area requirements)
- All EU/EEA citizens who are legally and habitually resident in the State will not be eligible to apply for a Local Authority Home Loan for the first three months of residence in the State. Thereafter, they will be eligible to apply if they are habitually resident in the State and meet the definition of "worker" in EU law or have been legally and habitually resident in the State for more than 5 years.
- Non-EEA applicants:
- Single/joint applications where applicant(s) are Non-EEA/EU applicants from any other countries must be legally and habitually resident in Ireland for a period of 5 years; or have leave to remain extending to potentially permit 5 years reckonable residence; or have indefinite leave to remain in the State.
- An application from a non-EEA/EU national married to/in civil partnership within 1-3 above may be considered as part of a joint application for that household, provided they hold a valid Stamp 4 . No specific length of prior residence is required.
- When deciding if you are considered habitually resident in Ireland, the Department of Social Protection considers the following five factors:
- Length and continuity of residence in Ireland
- Length and purpose of any absence from Ireland
- Nature and pattern of employment
- Your main centre of interest
- Your future intentions to live in Ireland as it appears from the evidence
- Single applicants must not be earning greater than €70,000 annual gross income.
- The combined income of joint applicants must not be greater than €85,000 annual gross income.
- Where you are married, in a civil partnership, or in an intimate and committed relationship, they may not apply for a Local Authority Home Loan on their own. They must make any such applications together with their spouse, civil partner or partner, as the case may be.
- You must have a credible savings record of a minimum of 12 months duration immediately prior to making an application.
- You must be of good credit standing with a satisfactory credit record.
To be eligible for a Local Authority Home Loan, you must be:
- in continuous employment for a minimum of two years as a single applicant
- in continuous employment for a minimum of two years as the primary earner in a joint application
- Employment can be PAYE and/or self-employment.
- Continuous employment does not need to be permanent, but continuous in nature. This means that an applicant may be in the same employment or in more than one employment over a two year period, however the break from employment cannot have been for more than 4 weeks.
- For self-employed applicants, a minimum of two full year’s accounts for that employment must be provided.
- Multiple casual employments will not be considered eligible.
The requirement that a single or sole earner must have at least two years continuous employment and the second applicant must have at least one year of continuous employment is relaxed for periods where an applicant was unemployed as a direct result of the COVID-19 situation. Generally, affected applicants who were in receipt of the Pandemic Unemployment Payment (PUP) up to 5 April 2022 are not considered to have had a break in employment in the two preceding years if the following conditions are met:
- You confirm that you became unemployed in or after March 2020 as a result of the COVID-19 situation and you can provide proof of receipt of the Pandemic Unemployment Payment (PUP), or another pandemic relevant scheme. If another unemployment support was obtained, you must explain why you did not access PUP. and
- You have resumed continuous employment for a period of at least three months, post your COVID-19 unemployment period(s).
Contract Employment Income
Contract income will be considered in repayment capacity provided:
- The applicant works in an industry where contract income is regarded as common, e.g. (retail, hospitality, education, health, and financial services)
- The applicant has been on contract in similar industry for at least the last two years or, where recently commenced a contract, has been employed in a similar industry for a minimum of the previous two years before their application date.
- Where an applicant(s) contract has three or fewer months to expiry and the contract provider has given written confirmation that the contract is to be renewed.
Further evidence of contract employment may be sought by the Local Authority.
- You must consent to the mandatory Central Credit Register (CCR) enquiry. This consent will be used to conduct a new enquiry as part of the credit assessment process.
- An application will be classified as incomplete if all parties to the Local Authority Home Loan application have not signed the CCR consent. A judgement search is completed for all named applicant(s) on an application recommended for approval.
Mortgage Protection Insurance
Mortgage Protection Insurance is a form of insurance which pays off the outstanding balance on your mortgage should you die before the mortgage is fully repaid. The Local Authority MPI scheme is a group scheme. It is obligatory for all borrowers who meet the eligibility criteria to join the scheme.
- Local Authority Mortgage Protection Insurance (LA MPI) is a requirement of the Local Authority Home Loan scheme or in the case of one or more applicant(s) not being able to obtain the LA MPI you must have comparable and alternative cover and provide evidence of this cover at the time of drawdown of the loan and each year for the duration of the term of the loan.
Full terms and conditions of the scheme are available from your local authority.