THE TREATMENT that applicants for local authority home loans receive has been described by one Limerick TD as an “Alice in Wonderland situation”.
Limerick Fianna Fรกil TD Willie O’Dea said the criteria that Limerick City and County Council are bound to apply is not in line with anything in the commercial sector.
“There are people who have contacted me who are paying โฌ2,300 a month in rent. A mortgage on a similar house would cost โฌ1,800. But the Council is refusing them a loan because they have less than 12 months’ savings,” Deputy O’Dea said.
“If you can consistently pay that amount in rent, surely you can be trusted to pay a mortgage which would cost less? And if you’re paying that much rent on an income that qualifies you for a local authority loan, you’re not going to have much money to save”.
The Fianna Fail TD said this is an issue that has been cropping up more frequently from people requesting his help.
“This is an Alice in Wonderland situation. The local authority home loan is designed to help people who would struggle to pay a mortgage at the rates charged by commercial banks, yet applicants are being subjected to more onerous conditions than the commercial banks would impose,” he told this newspaper.
Deputy O’Dea said he does not blame the local authority, however, as “they are operating the rules they are given. The Department is operating on a directive of the housing agency. The system is broken.”
In answer to a query from the Limerick Post, a spokeswoman for Limerick City and County Council outlined how, in 2024, “59 local authority home loan applications were received with 20 being approved in principle”.
“Local authority home loan eligibility requires a person to be able to provide at least 10 per cent of the purchase price. This has to be at least three per cent coming from a person’s own resources, that being a 12 months’ credible and consistent savings record.
“The seven per cent balance can come from non-borrowed sources, such as a gift or inheritance,” the spokeswoman said.
“A local authority tenant who applies for a local authority home loan for the purposes of the purchasing their house under the Tenant (Incremental) Purchase Scheme 2016 can avail of a 100 per cent loan.
“A rent record is considered as part of the application assessment. The requirement for a savings record is a scheme rule that is made at Departmental/Ministerial level. The local authority has no discretion to deviate from it.”
