Home loan scheme requirements need to be relaxed

Requirements of applicants seeking a loan under the Rebuilding Ireland Home Loan scheme should be relaxed (RIHL ) according to Tuam area councillor Karey McHugh Farag.

Under current conditions, those wishing to be issued with a loan from the scheme must have mortgage rejection letters from two different banks.

However, Cllr McHugh Farag says applicants are being prohibited from applying for a loan from the scheme as banks are willing to provide small mortgages which are not enough to cover the price of the house.

She said; “My issue [with the application process] is people need two refusals from banks to use it. Banks are giving small amounts like 50, 60, 70 grand so [people] are being offered money but not enough to [cover a house price].”

The Caothairleach of the Galway County Council Jimmy McClearn agreed with Cllr McHugh Farag’s point describing present mortgages being offered by banks as “useless” as they are not enough to buy a house.

The councillors’ comments come after the members of County Hall approved the raising of a loan of €10 million from the Housing Finance Agency for the purpose of funding loans issued to first time homeowners under the RIHL.

Acting director of services for housing at the local authority Michael Owens told the chamber that the €10 million loan was needed as most of the first loan of €10 million approved late in 2018 was drawn down as required in response to loan approvals.

Mr Owens also informed councillors that as of the end of 2019 more than €6.7 million of the first loan has been drawn down.

 

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