Government’s €400m first-time buyer scheme set to open – The Irish Times

First-time buyers who cannot afford to buy newly built houses or apartments can from today apply for the government’s €400 million share capital scheme.

Housing Minister Darragh O’Brien is due to announce the First Home program on Thursday, which the Coalition says will fund up to 8,000 homes over four years. The scheme will be open to buyers of newly built houses and apartments in private estates anywhere in Ireland.

The scheme will provide a portion of the purchase price to buyers to add to their mortgage and deposit and applications will be taken immediately. The state will pay up to 30% of the cost of the new home in exchange for an equivalent stake in the property, with the intention that this can be repaid at a later date.

It is understood that buyers will have the opportunity, but not the obligation, to redeem all or part of the participation in the First Home program at any time if they wish and have the resources to do so. A small service charge will be payable on the equity after the sixth year. Under a similar scheme in the UK, the majority of buyers buy out the stake early in the term, a government source said.

The program would, according to the source, be “carefully targeted and calibrated with house price caps ranging from €250,000 to €450,000, depending on where you are in the country”. It is understood that there will be increased ceilings for apartments in recognition of the viability issues of these properties.

Applicants will be required to borrow the maximum mortgage amount available to them and the program will be open to AIB clients, including their EBS and Haven mortgage businesses, Bank of Ireland and Permanent TSB. Other mortgage providers may join in the coming months.

The figure of 400 million euros is shared 50/50 between an investment by the State and participating banks. Sinn Féin has criticized the scheme, which it says could drive up house prices. The party has already tabled motions to have the program scrapped.

In a motion presented to the Dáil earlier this year, Sinn Féin housing spokesperson Eoin Ó Broin said that “government policies, including home purchase assistance and affordable housing first home, have and will continue to inflate housing prices.

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