Navigating the Fresh Start Mortgage: Your guide to state affordable housing schemes

A Fresh Start principle applies to applications to State affordable housing and loan schemes. This means that the following categories of persons are eligible to apply for the Local Authority Home Loan:

  • Applicant(s) who previously purchased or built a dwelling, together with a spouse, a civil partner or a person with whom he or she was in an intimate and committed relationship are eligible under the Fresh Start principle where this relationship has ended, and they have divested themselves of their interest in the previous property.
  • Applicant(s) that previously purchased or built a residential property, but has been divested of this through insolvency or bankruptcy proceedings, are eligible to apply. However, a separate assessment of creditworthiness will be conducted by the underwriters. This applies when the applicant has exited the insolvency/bankruptcy proceedings.

Termination of Relationships – Separation / Divorce / Dissolution of Civil Partnership / Civil Annulment

In recognition of instances where an individual has undergone a separation / legal separation/divorce or otherwise and has relinquished their rights to the family home property, an exemption to the First Time Buyer eligibility criteria can be applied under the Fresh Start Principle.

In cases such as these, the applicant must meet all the following criteria (This will need to be confirmed by way of a solicitor’s letter before drawdown of any loan):

  • be separated/legally separated/divorced (i.e. their marriage or civil partnership or partnership has been legally or otherwise dissolved) under a Court Order or by a separation agreement.
  • if there is no separation agreement regarding the breakdown of a relationship, a sworn statement should be obtained confirming: There is no formal separation agreement.
    • No court proceedings are pending under family law legislation.
    • The position in relation to maintenance and other payments, if any.
  • have left the family home property and retained no interest in it, and
  • the property under the Local Authority Home Loan is the first residential property purchased since leaving the family home.
  • where either party to a mortgage application is separated or divorced, the following details should be supplied with the application;
    • The extent of maintenance being received or paid by the applicant.
    • The circumstances under which the maintenance payments can cease (typically the age of the majority of dependent children and/or remarriage).
    • Details of any payment(s) to be made in respect of the removal of spousal/partnership rights to the existing family home or other property which could have a bearing on the ability to repay the mortgage.
    • That no onerous conditions exist.

Insolvency / Bankruptcy

A person who has exited insolvency/bankruptcy proceedings and had previously purchased a home may still be eligible for Local Authority Home Loan if as a result of insolvency or bankruptcy, they had to sell or had been divested of their home.

Where any of the persons making an application previously purchased or built a dwelling in the State for his or her occupation but that person demonstrates, that they have sold, or have been divested of, that dwelling as part of a personal insolvency or bankruptcy arrangement or proceedings or other legal process consequent upon insolvency, then the previous purchase or building of the dwelling concerned shall not render the applicant(s) ineligible for a Local Authority Home Loan.

If you have any questions regarding any of the above schemes, please do not hesitate to get in touch with our conveyancing department or call us at 051-874-909 or email us at info@poc.ie.

For more information see https://localauthorityhomeloan.ie/about/