The Local Authority Affordable Purchase Scheme helps people on low to moderate incomes buy homes at reduced prices. New homes under this scheme are located in areas with the greatest housing need and where affordability is an issue.

Through the scheme, the Local Authority will take a percentage equity stake (share of the ownership) in the home equal to the difference between the open market value of the property and the reduced price paid by the purchaser. So, if you buy the home at a 20% discount the Local Authority will have a 20% stake in your home. If the affordable purchaser wants, they can buy back the Local Authority’s stake at any time.
The Housing Authority can elect to require the repayment of the equity share:

• After a long stop period of a minimum of 40 years is reached; or
• On the occurrence of certain realisation events, which are set out in the Affordable Housing Act 2021, prior to the long stop date being reached.

The scheme is aimed at first-time buyers, but there are some exceptions to this.

Each Local Authority introduces its own affordable housing scheme and manages the application process. When homes are available under the scheme they will be advertised on the local authority's website and in a local newspaper. The advertisement will include details about the scheme including how and when to apply.

You will need to complete the application form and return it to the Local Authority, along with any additional documentation, by the closing date for the scheme. If you are interested in the Local Authority Affordable Purchase Scheme, you should check your local authority's website for details about upcoming schemes in your area.

To be eligible to apply for Affordable Housing applicants must meet certain income, property and residency criteria. At a minimum, applicants must satisfy the following primary criteria in order for their application to be processed.

Income and savings

· You must meet certain income criteria, as outlined below.

Your income must be below a certain level. This is calculated by multiplying your gross annual income by 4. This figure is known as your 'purchasing power' and it must then be less than 85.5% of the market value of the affordable home.

or

You must have proof from a bank or financial institution that you cannot get a mortgage for 85.5% of the market value of the home

The market value of the properties is agreed by the relevant Local Authority running the scheme prior to the launch of the scheme. More detail on what is considered assessable income is available in the Affordable Housing Income Assessment Policy.

·If you have savings above a certain amount, you may not qualify for this scheme. You can have the money to cover the deposit for the home and an additional €30,000. Anything above this is added to your purchasing power. And, if this goes above 95% of the market value of the home you are not eligible for the scheme.

Property

· You must be classified as a first-time buyer and do not own or have a legal interest in a dwelling.

First Time Buyer Exceptions are documented in the Affordable Housing Act 2021, which does allow categories of exceptions to the First-Time Buyer eligibility criteria, to include circumstances of divorce or separation, personal insolvency or bankruptcy and others, subject to terms and conditions.

Also, you must not already own or have an interest in another property. This applies unless the property is unsuitable for your household’s needs.

Residency

· You must have the right to live in the State and the right to reside indefinitely in Ireland.

· Intending purchasers from a member state of the EU/European Economic Area can apply for an affordable home, provided they are living and working in Ireland.

· The affordable home must be the household’s normal place of residence.

· Where intending purchasers are not an Irish/EU/EEA citizen, they must have indefinite leave to remain in the State.

The qualifying criteria for the scheme is set-out in the Affordable Housing Act 2021 and the Affordable Housing Regulations 2022.

Applicants should confirm through the online portal application by self-declaration that they are a first-time buyer and/or Help to Buy approval is obtained from the Revenue Commissioners.

No, with the exception of certain exemptions which are set out in the Affordable Housing Act 2021. This allows for particular categories of exceptions to the First-Time Buyer eligibility criteria to include circumstances of Divorce or Separation, Personal insolvency or bankruptcy, subject to terms and conditions.

In addition to the eligibility criteria, each Local Authority has developed a Scheme of Priority for Affordable Dwelling Purchase Arrangements which is adopted by the Local Authority and which is approved by the Department of Housing, Local Government and Heritage.

The Scheme of Priority outlines the methodology applied where the number of eligible applicants exceeds the number of affordable dwellings available for purchase for which applications are made. Applicants should consult their relevant Local Authority for details of the Scheme of Authority applicable to their area.

• Consent form and declaration signed and dated by all applicants.

• Proof of Residency : utility bill/Rental agreement/correspondence showing proof of residency.

• Proof of Citizenship: Passport or Birth Certificate

• Proof of Right to Reside in Ireland: GNI Stamp 4

• Photographic Identification – Any one of the following documents: -Current Valid Passport, Driving Licence, National Age Card issued by An Garda Siochana, an identification form with a photograph signed and stamped by a member of An Garda Siochana

• Proof of Present Address dated within the last 3 months. Any one of the following documents:- Current utility bill (gas, electricity, telephone, mobile phone, or internet bill), bank statement/credit union statement, document issued by government department that shows your address, Statement of Liability P21 from Revenue.

• Proof of PPSN/Tax Registration Number any one of the following documents: - Statement of Liability P21, Tax Assessment, Notice of Credits from Revenue, Letter from Revenue Commissioners addressed to you showing PPSN, employee details from Revenue, Receipt for social welfare payment, Letter from Department of Employment Affairs and Social Protection addressed to you showing your PPSN, Medical Card, Drug Payment Scheme Card, Payslip, P45.

• Proof of Income is required for all applicants. The Proof of Income Documentation Required includes:

• PAYE salaried applicants must provide an up-to-date Salary Certificate (Employment Detail Summary available via www.revenue.ie/MyAccount).

• Self-employed applicants must provide an Accountants Report/Audited Accounts (2 Years Required), Current Tax Balancing Statement & Current Preliminary Revenue Tax Payment Receipt.

• Evidence that applicant(s) are first time buyers: e.g. Help to Buy confirmation (available from www.revenue.ie)

• Evidence of ability to finance the purchase: e.g. Provisional loan approval letter from their Bank, Building Society or Local Authority.

• Evidence of savings/deposit

• Confirmation of eligibility for Help to Buy Scheme (print out from Revenue portal (myAccount (PAYE applicants) ROS (Self-assessed applicants) confirming names of applicant(s) and maximum entitlement under the scheme.) (Note that applicants are considered first-time-buyers only if BOTH are buying their home for the first time)

• Mortgage loan approval in principle letter stating the maximum mortgage available to applicants

All application details and data submitted for each scheme is retained for each individual scheme application only and will is not carried forward for any future affordable housing scheme(s).

Applicants who submit false or misleading information on their application will be disqualified from this process.

Applicants should submit a Mortgage Approval in Principle letter from their proposed lender confirming the maximum mortgage available to the applicant when applying for affordable housing.

Purchasers can use a mortgage from any private lending institution, such as a bank or building society (AIB Group including AIB/Haven/EBS), BOI and PTSB can provide mortgages. The Local Authority Home Loan is also available through Local Authorities to finance their purchase.

A booking deposit of €5,000 is payable on execution of contracts. In order to secure the home, Financial institutions require that a minimum 10% of the full purchase price must be raised as a deposit from your own resources. E.g. For a property with a market value of €350,000 an applicant will need a deposit of up to €35,000. The Help to Buy Scheme (HTB) operated by the Revenue Commissioners can be utilised towards this deposit amount where the applicant is eligible for the HTB Scheme.

Please refer to the qualifying criteria defined by the Revenue Commissioners for eligibility for the scheme.

Applicants who are eligible and who submit a valid application will be assessed based on Local Authority’s Scheme of Priority for Affordable Dwelling Purchase Arrangements.

Selected applicants will be required to submit formal mortgage approval and verify their application details and offered the opportunity to purchase a property in sequence until all properties have been sold. The developer and the LDA are not involved in the administration or the selection process for the Affordable Housing Schemes.

The market value of an affordable home is the price for which the affordable home might reasonably be expected to achieve on the open market. The initial market valuation of the home to calculate the equity share is carried out by the Local Authority. For subsequent valuations of the property, a valuation mechanism will be set out in the Affordable Dwelling Purchase Arrangement.

A valuation will be required when a redemption payment is being made by the purchaser. Over time, if the value of the affordable home increases, the amount owed on the value of the equity share will increase in line with the prevailing market value.

The affordable purchase price for the properties will be discounted on the market value and based on the specific purchasing capacity of eligible applicants. The Local Authority will provide an “Affordable Dwelling Contribution” to reduce the purchase price payable now by successful applicants. Discounts ranging from a minimum of 5% of the market value to a maximum of 25% of market value will be available depending on successful applicants’ income, deposit (which can include support from the Help to Buy scheme) and savings. Applicant “purchasing power” will determine the price that the purchaser will pay for the affordable home and the amount of the Affordable Dwelling Contribution.

The Local Authority will provide a contribution known as an “Affordable Dwelling Contribution” that facilitates the purchase of homes by an eligible applicant.

The Affordable Dwelling Contribution is the difference between the combined total of the purchaser’s deposit and maximum mortgage capacity (and savings where relevant) and the market value of the home on the date of purchase.

Market Value

Less

Deposit + Mortgage Capacity + Relevant Savings

Equals

Affordable Dwelling Contribution.

The purchasing capacity of applicants will be calculated as the combined total of

• Maximum mortgage capacity, i.e. 4 times gross household income, plus
• A minimum deposit of 10% of the affordable purchase price, plus.

In limited circumstances, any relevant savings, i.e., any savings in excess of the combined sum of the required deposit amount plus €30,000 may be taken into account.

It is a condition of this scheme that the Local Authority will register an inhibition on the property equal to the “Affordable Dwelling Equity”, or equity share, representing the percentage discount below market value that the home is purchased for. The “Affordable Dwelling Equity” will in general become repayable upon the subsequent sale of the property or after forty years.

The total amount repayable in respect of the “Affordable Dwelling Equity” to remove the Local Authority’s shared equity interest from the property will depend on the future market value of the home and the timing of the repayment(s).

The Local Authority’s equity share in the property must be repaid in full, but the timing of repayment(s) is flexible.

The Local Authority can demand the repayment of the affordable dwelling equity by serving a Realisation Notice on the homeowner on the occurrence of certain realisation events including:

The expiry period of 40 years without redemption in full of the equity share by the purchaser(s) (which will be the period during which the Local Authority may not realise its equity share other than for breach of other conditions of the agreement)

• Where the purchaser(s) dies, commits an act of bankruptcy, or is adjudicated a bankrupt.
• A mortgagee, incumbrancer or receiver gains possession of the affordable dwelling.
• The dwelling becomes subject to an order or process for compulsory purchase.
• The dwelling is demolished or destroyed, whether by fire or otherwise or is damaged so as to materially affect its market value.
• The dwelling is abandoned or is no longer the principal primary residence of the purchaser(s).
• The dwelling is sold.
• Where there is a material breach of a covenant in the affordable dwelling purchase arrangement.
• The purchaser(s) is found to have deliberately misled the Local Authority in respect of any material fact regarding eligibility or priority in making their application.

A Realisation Notice will specify a period (not shorter than three months commencing on the service of the notice) after which the Local Authority will be entitled to realise the affordable dwelling equity.

The procedure for this arrangement will be clearly set out in the Affordable Dwelling Purchase Arrangement.

The Affordable Dwelling Purchase Arrangement is the legal agreement or contract between the Local Authority and the purchaser setting out the terms and conditions under which the Local Authority provides the Affordable Dwelling Contribution.

Each successful applicant will enter into an Affordable Dwelling Purchase Arrangement with the Local Authority. This will be prior to the closing of the purchase of their affordable home. The agreement covers the obligations of the purchaser and the Local Authority and makes provision for the registration of the agreement with the Registry of Deeds/Land Registry. The agreement will also set out how and when the homeowner can make redemption payment(s) to reduce the Local Authority’s affordable dwelling equity share as well as the conditions under which the Local Authority may seek redemption of the affordable dwelling equity.

Successful applicants will be required to enter into a Contract for Sale with the LDA in order to complete the purchase of the affordable home. In addition, the LDA will also require confirmation of the purchaser’s Affordable Dwelling Purchase Agreement with the Local Authority.