Affordable Housing FAQs

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 up to €55,000 in a year as a single person (up to €75,000 between you if you are a couple).  These are the approximate income limits only - lower income limits may apply.

Are you eligible for mortgage allowance?

A Local Authority tenant/tenant purchaser, a tenant of a house provided by a voluntary body, which does not qualify for the income related subsidy under this scheme, may be eligible for mortgage allowance to reduce their mortgage payments in each of the first five years of the mortgage.  An allowance of up to €11,450 is payable.

Can I get my mortgage from any Lending Agency?

Mortgages can be obtained from one of the following nominated financial institutions: EBS (Home Access), IIB Homeloans Ltd. (Advantage Mortgage), First Active or Bank of Ireland (Breakthrough Mortgage).

However, if you are purchasing one of the Local Authority’s own affordable houses, you must get your mortgage from the Local Authority.  Local Authorities provide mortgages up to a maximum amount of €185,000 with a 3% deposit required.

Who provides affordable homes?

Private developments

Most affordable homes are in private developments.  Usually, a percentage of all houses or apartments in a private development are made available to be sold as affordable homes.  These are sold at a discount to other houses and apartments in the development.

Land owned by the Government and Local Authorities

Another way of providing affordable homes is to build them on land the Local Authority owns.  Land owned by the Government has also been made available for affordable homes.

What types of affordable homes are available?

A range of different properties are available to buy, including:

• one-, two- and three-bedroomed apartments; and
• two-and three-bedroomed houses.

What makes these properties affordable is that they are all available at prices that are much lower than the market value.

How do I apply?

To apply to Meath County Council for Affordable Housing, please print out and complete the Affordable Housing Application Form and send to Caroline Doonan, Housing Section, Meath County Council, County Hall, Navan, Co. Meath.

Contacts

Caroline Doonan,
Housing Section,
Meath County Council,
County Hall,
Navan,
Co. Meath.

Telephone: 046 9097256

Email: cdoonan@meathcoco.ie

You can apply to more than one Local Autority.  Local Authorities include County Councils, City Councils, Borough Councils and Town Councils.

What happens once I apply?

Meath County Council will assess your application to decide whether you qualify for an affordable home.  We 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 county.

The discount can also change depending on the property.  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'.

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'.  This applies whether you have a Local Authority mortgage or a mortgage with a Bank or Building Society. 

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.

Example of how the clawback works

John and Mary buy an affordable home.  The market value of this property is €280,000, and they buy it at an affordable price of €196,000.  So, the market value discount to John and Mary, which is known as the clawback, is 30%.

• If John and Mary sold their affordable home for €330,000 after five years, the clawback would be €99,000 (30% of €330,000).  They would have to pay back €99,000 to the Local Authority.  They would also have to repay any money owed to the mortgage lender to clear their mortgage.
• If John and Mary sold their affordable home for €430,000 after 15 years, the clawback would have reduced to 15% and they would have to pay back €64,500 (15% of €430,000) to the Local Authority. They would also have to repay the money owed to the mortgage lender to clear their mortgage.
• If John and Mary sold their affordable home after 20 years, they would not have to pay any clawback, but they would have to repay any money owed to the mortgage lender to clear their mortgage.

How much can I afford to borrow?

As a guide, your mortgage repayments should not be more than one-third of your net income (after tax and social insurance (PRSI) have been taken off).  For example, if your net incomet is €2,700 a month, your mortgage repayments should not be more than €900 a month.  You need to be careful not to borrow more than you can afford to repay.

Where can I get a mortgage for an affordable home?

You may get a mortgage either from the Local Authority or from the following organisations:

• Bank of Ireland
• Educational Building Society (EBS)
• IIB Homeloans Ltd.
• First Active

Check www.affordablehome.ie for any updates on the above.

If you choose a mortgage with a Bank or Building Society and the Local Authority offers you a home:

1. The Local Authority will give you a 'Confirmation for Lender' certificate, which describes the property and tells you the Banks or Building Societies that may be willing to grant you a mortgage for your affordable home; and

2.  You can then take this certificate and apply for a mortgage with a Bank or Building Society.  The term of your Bank or Building Society mortgage (the number of years you make repayments for) can be for up to 35 years.

If you choose a mortage with the Local Authority:

1.  The most you can borrow from a Local Authority is €185,000 

2.  The term of your Local Authority mortgage can be up to 30 years; and

3.  Your mortgage repayments cannot be more than 35% of your net income.  If you are applying for a mortgage with someone else, the repayments cannot be more than 35% of your net income put together.

How long can a mortgage last?

A mortgage can last from 15 years 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.

Cost of affordable home	Less deposit (3%)	Mortgage over 25 yrs	Approximate monthy repayment (an interest rate of 4.5%)
€ 160,000	€ 4,800	€ 155,200	€ 860
€ 180,000	€ 5,400	€ 174,600	€ 970
€ 220,000	€ 6,600	€ 213,400	€ 1,185

Note: This is an example only and the interest rate 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 and enough money to cover legal fees and other costs.  Remember to make sure that after you make your monthly mortgage repayment you still have enough money left to pay all your other bills.  A management charge may apply to some affordable homes.

Will I have to pay stamp duty?

As a first-time buyer, you will not have to pay any stamp duty if your home is less than 125 square metres.  Usually, homes bought by first-time buyers are less than 125 square metres.

What about tax relief on my mortgage?

You will get tax relief on the interest you pay on your mortgage.  The tax relief is applied by the lender providing your mortgage.  Your monthly mortgage repayments are then reduced in line with this.  Your lender should give you a TRS1 form which you will need to fill in and send to:

The Office of the Revenue Commissioners

Collector-General's Division

TRS Section

Sarsfield House

Francis Street

Limerick

Do I need mortgage-protection insurance?

Yes.  This is a special type of life assurance taken out for the term of the mortgage to make sure the mortgage is paid off if you die.

Mortgage-protection insurance from your Local Authoriy

If your mortgage is with the Local Authority, you must take out a mortgage-protection insurance policy with them and the cost will be added to your monthly mortgage repayments.

Mortgage-protection insurance from your bank or Building Society

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.

Am I entitled to other benefits?

If you are earning less than € 28,000 a year (before tax and social insurance are taken off) or if you are a tenant of a Local Authority or Voluntary Housing Association, you may qualify for help with your mortgage payments (see below).

Mortgage Subsidy

A mortgage subsidy is help with your mortgage payments.  To qualify, your household income needs to have been less than €28,000 (before tax and social insurance is taken off) in the previous tax year.  Household income is the total income of the owners of the affordable home.  If you qualify for a mortgage subsidy your monthly mortgage repayments will be reduced.

Mortgage Allowance Scheme

The mortgage allowance scheme is an allowance of €11,450 to go towards your mortgage, paid over a five-year period.  If you are a tenant of the Local Authority, or you are buying the home you previously rented from the Local Authority, and you want to buy an affordable home, you may qualify for the mortgage allowance scheme.

The allowance is paid directly to the lender providing your mortgage and your repayments are reduced for the first five years of the mortgage.  The allowance paid in any year cannot be more than the total mortgage repayments due in that year. 

You may qualify for the mortgage subsidy and the mortgage allowance scheme, but you can only claim for one of them.  Which of these benefits you most will depend on your income.

19. 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'. This applies whether you have a local-authority mortgage or a mortgage with a bank or building society.

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 re mortgage 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.

Example of how the Clawback Works

John and Mary buy an affordable home. The market value of this property is €280,000, and they buy it at an affordable price of €196,000. So, the market value discount to John and Mary, which is known as the clawback, is 30%.

• If John and Mary sold their affordable home for €330,000 after five years, the clawback would be €99,000 (30% of €330,000). They would have to pay back €99,000 to the local authority. They would also have to repay any money owed to the mortgage lender to clear their mortgage.
• If John and Mary sold their affordable home for €430,000 after 15 years, the clawback would have reduced to 15% and they would have to pay back €64,500 (15% of €430,000) to the local authority. They would also have to repay any money owed to the mortgage lender to clear their mortgage.
• If John and Mary sold their affordable home after 20 years, they would not have to pay any clawback, but they would have to repay any money owed to the mortgage lender to clear their mortgage.
• If John and Mary sell their home and the market value has decreased from €280,000 to€260,000 then the clawback would be based on the lower market value of €260,000 less what they paid €196,000, which is €64,000. So they have to pay back €64,000 to the local authority when they sell in addition to any money owing on their mortgage.

20. Can I Buy an Affordable Home through Shared Ownership?

Yes. Shared ownership is when you buy part of your home and pay rent to the local authority on the share you do not own. It means that instead of taking out a full mortgage on your new home, you can buy part of it and pay rent on the other part to the local authority.

What about a deposit and savings?

• It is possible to borrow up to 97% of the purchase price of an affordable home. This means that you need to save at least 3% of the price for a deposit.
• You should be able to show that you have a record of saving. Or, some Banks or Building Societies may take a record of rent paid into account as part of a saving record.  This can show your ability to pay a mortgage.
• Banks and Building Societies may apply their own conditions, so you should check with them first.