Affordable Housing
What is an affordable home?
An affordable home is a home that you buy at a discount to the market price, and you must live in it. If you sell it within 20 years, you will have to pay back a percentage of the sale price to the local authority.
Do I qualify for an affordable home?
To qualify for an affordable home, you should:
be a first-time buyer (but there are some exceptions, for example if you are divorced);
have enough income to meet your mortgage repayments after you have paid all your other costs; and as a guide, earn between €25,000 and €58,000 if you are applying on your own and up to €75,000 between both of you if you are applying with someone else. These are the approximate limits only - lower and higher income limits may apply.
What happens once I apply?
The local authority will assess your application to decide whether you qualify for an affordable home. They will send you a letter explaining the outcome of your application.
What are my chances of being offered an affordable home?
There is more demand for affordable homes in some places than others. The number of affordable homes available may be limited in the area you would prefer to live in. Keep your options open by considering alternative areas.
How much is an affordable home?
An affordable home is a home that you buy at a discount to the market price, but the prices are different in different areas of the country. The price depends on the area you want to live in and on the size and type of affordable home available. The price of affordable homes in large towns and cities tends to be higher than elsewhere.
In all cases you pay less for your affordable home than you would pay if you were buying it on the open market - that is what makes it an 'affordable home'.
Can I apply for an affordable home if I am not an Irish citizen?
You may apply for an affordable home if you have the right to live and work permanently in Ireland . If you are from a country that is a member of the European Union (EU) or European Economic Area (EEA), you can apply for an affordable home as long as you are living and working in Ireland . If you are not from a country that is a member of the EU or EEA, you can check with your local authority.
The European Economic Area (EEA) includes the 27 EU member countries and Iceland , Lichtenstein and Norway .
Where can I get a mortgage for an affordable home?
You may get a mortgage from the following organisations:
* Bank of Ireland* Educational Building Society (EBS) * IIB Homeloans* First Active;
Check www.affordablehome.ie for any updates to the above.
How long can a mortgage last?
A mortgage can last from 15 to 35 years. The number of years the mortgage lasts is called the term. With a shorter term, you have higher monthly repayments but, because you pay the mortgage over a shorter period, you pay less interest in total. With a longer term, you have lower monthly repayments but you pay more interest in total.
Example
| Cost of affordable home |
Less deposit 3% |
Mortgage over 30 Years |
Approx. Monthly repayment (at an interest rate of 5%) |
| €180,000 |
€5,400 |
€5,400 |
€935 |
| €220,000 |
€6,600 |
€213,400 |
€1,145 |
Note: This is an example only and the interest rates may change. Your monthly mortgage repayments can go up or down depending on interest rates and the conditions of your mortgage agreement. You must pay legal fees, which may be about €2,000. To buy an affordable home you will need a deposit (3%) and enough money to cover legal fees and other costs. Remember to make sure that after you make your monthly repayments you still have enough money left to pay all your other bills. A management charge may apply to some affordable homes.
Do I need mortgage-protection insurance?
If you get a mortgage with a bank or building society, you will need to take out mortgage-protection insurance. Discuss your options for mortgage-protection insurance with them.
What is the 'clawback'?
If you sell your affordable home within 20 years, you must pay back to the local authority a percentage of the sale price. This is known as the 'clawback'.
The local authority works out the clawback as follows.
When you buy your affordable home, you get it at a discount to other similar properties in the market. The clawback is based on the percentage discount you get when you buy your affordable home. If you decide to sell or remortgage your home, the local authority applies this percentage to the price you get for the sale. If you sell within the first 10 years, you must pay back the full percentage from the sale that you got as a discount when you bought your home. After 10 years, the percentage you must pay back reduces by one-tenth for each full year you live in your home. If you sell your home after 20 years, you do not have to pay any 'clawback' to the local authority.
You can get more information from the following websites -
www.affordablehome.ie
www.environ.ie
www.citizeninformation.ie
