To ask the Minister for Housing; Planning and Local Government when he was first informed that the Rebuilding Ireland home loan scheme was oversubscribed and that local authorities were unable to process application forms due to a lack of funding; and if he will make a statement on the matter.
The Rebuilding Ireland Home Loan scheme was launched in February of last year to replace the existing local authority mortgage schemes, which were funded through loans that local authorities obtained from the Housing Finance Agency (HFA) for that purpose.
When the Rebuilding Ireland Home Loan was initially being developed, it was estimated that the drawdown of loans under the scheme would be approximately €200 million over three years. The scheme has proven to be far more successful than originally anticipated, and the level of funding issued by local authorities to end January 2019 is approximately €106m, which is ahead of initial estimates for the scheme.
My officials have kept me informed regarding the progress of the Rebuilding Ireland Home Loan on a regular basis, and have been engaging with officials from the Department of Public Expenditure and Reform in relation to the scheme since October 2018, when it became clear that the rate at which loans were being approved was higher than was originally anticipated. However, at that stage it was not yet clear that these approvals were being translated into actual loans issued by the local authorities. In fact much of the criticism at the time was that insufficient loans were being approved and/or drawn down. However, as Minister I had made a commitment on launching the scheme that I would seek further funding for it at an early stage, if necessary, given my belief in its potential. It was clear from data gathered towards the end of the year that drawdowns were happening at an increased rate. Indeed, by the end of January €106m had been drawn down, which accounted for some 53% of the available funding, at which point €66m would have been more consistent with the expectation of funds being drawn down over a three year period. I informed the Dáil on 29 January 2019 that the scheme had proven to be more successful than initially anticipated, as a result of which it would require a further tranche of funds to be borrowed by the Housing Finance Agency in order to enable its continuation. I further indicated that my Department was in discussions with the Departments of Public Expenditure and Reform and Finance with regard to an extension of the scheme and that when these discussions were concluded I would make an announcement on the matter.
A meeting with the Minister for Finance and Public Expenditure and Reform was scheduled for 4 February 2019, however this had to be rescheduled and took place on 5 March 2019. At no time was the first tranche of funding depleted and following the meeting on 5 March 2019, I informed the Joint Oireachtas Committee on Housing, Planning and Local Government that local authorities could continue to accept applications as discussions had commenced on further funding. As of the end of January 2019, €106m has been lent, supporting 575 individuals and families to buy their first home.
I am currently in discussions with the Minister for Finance, Public Expenditure and Reform regarding further funding for the scheme. Specific allocations to local authorities for 2019 will be finalised when those discussions have concluded. However, in the meantime the scheme remains open and all local authorities should continue to receive and process applications.
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