First-time buyers now eligible for loans to renovate derelict houses

Government Expands Support for First-Time Buyers with Local Authority Purchase and Renovation Loan

The Minister for Housing, Local Government and Heritage, Darragh O’Brien TD, announced an exciting development for first-time home buyers today, 5 June 2024. The government has approved the Local Authority Purchase and Renovation Loan (LAPR), a significant expansion of the existing Local Authority Home Loan scheme. This new initiative is designed to support both the purchase and renovation of vacant or derelict homes eligible for the Vacant Property Refurbishment Grant.

Bridging the Gap for First-Time Buyers

According to the government, The Vacant Property Refurbishment Grant has been highly successful, attracting over 8,100 applications. Building on this success, the LAPR will enable first-time buyers to secure loans that cover both the purchase and necessary renovation of these properties. This initiative broadens the scope of the existing local authority mortgage lending rules, which previously only applied to habitable homes and covered purchase costs alone.

Expanded Eligibility and Increased Opportunities

Eligibility for the LAPR will follow the current local authority mortgage lending criteria, ensuring a streamlined process for applicants. This loan is particularly beneficial for those who have viable renovation projects but face challenges in securing adequate funding from commercial lenders. There are two primary beneficiary groups:

1. Individuals with a viable project who lack sufficient income to obtain commercial financing but can demonstrate repayment capacity for a local authority loan.
2. Individuals whose projects do not meet bank lending criteria but are viable under the LAPR’s terms and have sufficient income to support repayment.

Key Features of the Local Authority Purchase and Renovation Loan

A notable feature of the LAPR is the inclusion of a bridging loan linked to the Vacant Property Refurbishment Grant. This element increases the applicant’s borrowing capacity and improves the project’s viability by considering the cost net of the grant. The LAPR will be available in the coming weeks, further reinforcing the government’s commitment to revitalizing vacant homes and supporting homeownership.

Comprehensive Support for Renovation Projects

The LAPR will maintain the same income limits and creditworthiness assessments as the Local Authority Home Loan. However, specific amendments will accommodate renovation projects. For instance, applicants must be first-time buyers or Fresh Start applicants and demonstrate the viability of their renovation project. Homes must have been vacant for over two years and meet the criteria for the Vacant Property Refurbishment Grant.

The value of the property post-renovation must not exceed specified limits, which vary by location:

• €360,000 in Dublin, Kildare, or Wicklow
• €330,000 in Cork, Galway, Louth, or Meath
• €300,000 in Clare, Kilkenny, Limerick, Waterford, Westmeath, or Wexford
• €275,000 in Carlow, Cavan, Donegal, Kerry, Laois, Leitrim, Longford, Mayo, Monaghan, Offaly, Roscommon, Sligo, or Tipperary

Combining Grants for Greater Support

The LAPR is designed to work seamlessly with the Vacant Property Refurbishment Grant. Applicants can also apply for additional grants, such as those offered by the SEAI, although the bridging loan component is specific to the Vacant Property Refurbishment Grant.

The introduction of the LAPR represents a substantial boost for first-time buyers looking to transform vacant or derelict properties into new homes. By expanding the local authority lending rules and incorporating renovation funding, the government is taking a significant step towards addressing the housing shortage and revitalizing vacant properties across Ireland. This initiative not only supports homeownership but also aligns with the broader objective of bringing homes back into use under the Housing for All policy.

Estate Agents Cork, West Cork

Looking for an estate agent in Cork or West Cork? Contact DNG Galvin today and avail of 40 years experience and expertise.

More information on the Local Authority Purchase and Renovation Loan on the government website