The Affordable Housing Scheme is a scheme in Ireland that aims to help lower income households to buy their own homes.Mortgages.ie provide Mortgage facilities to enable you to complete the purchase of your home through this scheme.

Affordable housing scheme application form

The Scheme allows lower-income house buyers the chance to buy newly constructed homes and apartments in areas where property prices have created an affordability gap for lower income house buyers. These properties are then offered for sale to eligible first-time purchasers at prices significantly less than their actual market value.

The local authorities provide land on which new houses are built and sold. Your local authority will generally advertise the availability of houses for sale under this Scheme in the local press or perhaps on local radio. If there are more eligible applicants than houses, the local authority will determine the order of priority, taking account of household circumstances, etc.

The houses are usually bought with a mortgage provided by the local authority. Some banks also provide mortgages for affordable homes. The loan can be up to 100% of the price of the house, subject to repayments being no more than 35% of the household net income. Net income is your income after tax and social insurance (PRSI). Some private lenders have proposed special affordable housing mortgages. However such mortgages will generally offer up to 100% of the purchase price and may not have maximum limits (unlike local authority loans which are capped at 185,000 euro (effective January 2006). Applicants for private sector affordable mortgages must be pre-approved by their local authorities for a suitable property (See Rules below).

Households may be entitled to a mortgage subsidy depending on their income in the previous tax year. If they are surrendering a tenant purchase house, a local authority house or a house provided by a voluntary body, they have the option of going for the mortgage subsidy or the Mortgage Allowance Scheme.

Rules

You qualify for the Affordable Housing Scheme if :

• You are in need of housing and your income satisfies the income test below
• You are registered on a housing waiting list with a local authority
• You are a local authority tenant or a tenant purchaser and you want to buy a private house and return your present house to the local authority
• You are a tenant for more than one year of a home provided by a housing association under the Capital Loan and Subsidy Scheme and you want to buy a private house and return your present house to the housing association.

The income test only applies to people mentioned in the first bullet point; if you are covered by the second, third or fourth bullet points, you are exempt from the income test.

The income test

Single income household
If your gross income (before tax) in the last income tax year was 40,000 euro or less (effective January 2006), (previously the limit was 36,500 euro), you are eligible.

Two income households
Multiply the gross income (before tax) of the higher earner in the last income tax year by 2.5 and add the gross income of the other earner in the last income tax year. If the answer is 100,000 or less (effective January 2006), (previously the limit was 92,000 euro), you are eligible.

Mortgage subsidy scheme

If your gross household income is less than 28,000 (effective January 2006), (previously the cut off was 25,500 euro), you will be entitled to a subsidy that will reduce your mortgage payments. This subsidy will be paid to the local authority. The subsidy is between 1,050 and 2,550 euro per year.

A household that does not qualify under the third and fourth categories above (i.e., a household that does not qualify for this subsidy) may instead qualify for the Mortgage Allowance Scheme.

Selling your house
If you sell your house within 20 years, you will have to pay the local authority a percentage of the proceeds of the sale. This percentage is expressed as the percentage difference between the sale price and the market value of the house. This amount will be reduced by 10% each year after you have owned your home for 10 years. So, if you sell your home after 20 years, you will not have to pay anything to the local authority.

Additional sources of affordable housing

In addition to the Affordable Housing Scheme, affordable housing is provided under Part V of the Planning and Development Acts 2000-2002. Part V allows a local authority to require developers to set aside up to 20% of new developments of five or more houses for social or affordable housing . Each local authority has to include these provisions (i.e., the commitment to providing a percentage of social and affordable housing) in its housing strategy, which form part of the development plan for its area.

Development plans are essentially blueprints for planning and development in your area. They include the local authority's objectives for the use of particular areas where you live (i.e., residential areas, industrial areas, agricultural areas, etc.). The plans are drawn up by the local authority in consultation with interested groups (including citizens) and are available from your local authority to view if you wish. You can read more about development plans here.

While up to 20% of any new housing development can be set aside for social/affordable housing, the local authority will determine the exact percentage, given the level of social need in the area. It may decide for example, that zero percent of the overall development is appropriate.

This provision of a percentage of affordable or social houses applies to any development of 5 or more homes, so now, any time that 5 or more homes are being developed, the local authority will decide how much (if any) will be affordable, social, voluntary, housing etc. This is determined in consultation with the developer, taking into account the appropriate percentage in the development plan.

There are no rules about where affordable houses should be located in new developments. It is for the local authority to decide which homes should be designated as affordable housing, as appropriate. For example the affordable houses may be peppered through the development/estate or may be grouped in pairs, in areas, etc. The proximity of these homes will all depend on what the local authority approve as most appropriate for the area and most appropriate for the residents of these homes.

Eligibility for Part V housing

You are eligible to buy an affordable house provided under Part V of the Planning and Development Acts 2000-2002 if 35% of your income is not sufficient to enable you to buy a house. If you get your loan from the local authority and your gross household income was below 28,000 euro in the previous tax year, you will be entitled to a subsidy that will reduce your mortgage payments. This subsidy will be paid to the local authority. The subsidy is between 1,050 euro and 2,550 euro per year. A clawback similar to that which applies under the Affordable Housing Scheme is payable if the house is sold with 20 years of purchase.

How to apply
In the first instance contact the local authority in the area whare you want to live for an application form and information pack about the Affordable Housing Scheme in your area.

You may be required to supply the following information with your application:

A current payslip from your employer
An Income tax form (P60) or a PAYE balancing Sheet (P21)
Other documentation that may be requested by the local authority.
You may also be requested to submit a letter from your employer confirming that you are a permanent employee. For self-employed people, you may be required to submit audited accounts for the previous three years.

If you are currently living in rented accommodation, you may have to produce a statement of your weekly rent signed by the landlord or you can submit a copy of your rent book with your application.

Applications for affordable housing under Part V of the Planning and Development Acts 2000-2002 are made to your local authority.

Further information:

The Affordable Homes Partnership is Government agency responsible for promoting affordable housing.

They can be contacted at

Affordable Homes Partnership
2nd Floor
Cumberland House
Fenian Street
Dublin 2
Dublin
IRELAND
Tel:+353 1 6564100
Fax:+353 1 6564100
Homepage:http://www.affordablehome.ie
Email:info@affordablehome.ie
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