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First Homes Shared Equity Scheme a Game Changer for Waterford Purchasers

Updated: Jul 12, 2022

Opposition Parties against supporting individuals and couples in getting their foot on the housing ladder

Waterford Senator John Cummins and Fine Gael spokesperson on Housing, Local Government and Heritage has described the new First Homes Shared Equity Scheme as a ‘game changer for Waterford individuals and couples who want to purchase their first home.

The First Homes Shared Equity Scheme which is being launched today (Thursday) is aimed at helping first time buyers (and fresh starters) to bridge the affordability gap between the maximum mortgage they can get from the bank and the cost of a housing unit, up to a maximum of 30% (20% if being combined with the help to buy scheme).

Senator Cummins said “This is a targeted and proportionate scheme which will help individuals and couples who are just missing out on purchasing a home because their mortgage is restricted by the central bank rules to 3.5 times their income. Price ceilings will apply depending on the area of the country you are seeking to purchase a new home, with Waterford’s ceiling being €350,000 (€450,000 for apartments).

He added “This scheme is specifically targeted at those who need it most. Under the scheme you must get your maximum mortgage, so in simple terms, if you can get a mortgage to the value of the housing unit you are seeking to purchase you won’t qualify for the scheme. However, if for example you had a 10% or 20% gap between the maximum mortgage you can get from a lending institution and the cost of the unit, the state will take this 10% or 20% as an equity in the property and you can pay it off at a later point when you’re in a better position to do so.

The three pillar banks of AIB, Permanent TSB and Bank of Ireland will operate the scheme. The percentage equity stake can be paid off without any service charge in the first 5 years, with a servicing fee of 1.25% applying between years 6-15, 2.15% between years 15-29 and 2.85% applying after 30 years. There will be no obligation to pay off the equity during this period and it can be recouped at the point of sale in the future if that is what the purchaser wishes to do.

Senator Cummins continued “Fine Gael believes in home ownership; we want more people to own their own homes. The new First Homes Shared Equity scheme will ensure this is a realisable goal for a whole new cohort of people that were locked out of the market heretofore. It differs from opposition schemes because it enables the purchaser to own their home outright and sell it on to whomever they want at a future point in time if that is what they choose to do. Sinn Fein’s affordable housing policy proposes that the state retains ownership of the land in which the house is built and restricts the purchaser to selling the property on to someone within a certain income band – this is not full home ownership.

“This scheme can be combined with the Help to Buy Scheme which gives first time buyers a refund of their tax paid in the previous four years up to a maximum of €30,000 or 10% of the purchase price of the unit, whichever is less. The Help to Buy Scheme has assisted 33,597 individuals and couples to purchase or build their first home, including 830 in Waterford.

Senator Cummins concluded by saying “It is exceptionally disappointing that all opposition parties want to abolish the Help to Buy Scheme which has helped so many Waterford families. They have also been very vocal against the introduction of the First Homes Shared Equity Scheme which will support young people in getting their foot on the housing ladder.

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