Local Authority Home Loan
What is the Local Authority Home Loan?
The Local Authority Home Loan is a government-backed mortgage for first-time buyers and certain other applicants. Loans are offered at reduced interest rates and can be used to buy new and second-hand properties, or to build a home. The interest rates are fixed for the full term of the mortgage, so you have the same repayments for the lifetime of the loan.
How much can I borrow?
You can borrow up to 90% of the market value of the property you are building or buying. The maximum market value is different depending on where your home is located. The maximum market value is:
- €320,000 in Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow
- €250,000 in the rest of the country
You need to show that you can afford your monthly mortgage repayments, which must be less than one-third of your household income. You can use the Home Loan Calculator on the Local Authority Home Loan website to get an estimate of how much you can borrow and what your repayments will be.
Do I qualify for the Local Authority Home Loan?
The Local Authority Home Loan is available to first-time buyers and ‘fresh start’ applicants. Fresh start applicants include:
- People who are divorced, separated, or whose relationship has ended and who have no financial interest in the family home
- People who have gone through personal insolvency or bankruptcy
To qualify for a Local Authority Home Loan you must:
- Be a first-time buyer or a 'fresh start' applicant, see above.
- Be aged between 18 and 70.
- Provide evidence of insufficient offers of finance from two regulated financial providers, for example, a bank or building society.
- Have a gross annual income of less than €65,000 as a single applicant buying in Cork, Dublin, Galway, Kildare, Louth, Meath or Wicklow, or €50,000 or less as a single applicant buying in other counties. Joint applicants must have a combined gross annual income of less than €75,000.
- Have a satisfactory credit record (a Central Credit Register enquiry will be made to check your credit record.)
- Have a deposit of at least 10% of the property’s market price or purchase price, whichever is less. (If you are eligible for the Help to Buy Scheme, you can use this towards your deposit.)
- Have a legal right to live and work in Ireland and be able to show that you are habitually resident here.
- Occupy the property as your normal place of residence.
In addition, you must have been in continuous employment or self-employment for a minimum of 2 years, if you are the primary applicant. Continuous employment does not have to be permanent, full-time or even with the same employer. However, there should not be a break of more than 4 weeks between your jobs and you will not qualify if you have lots of casual jobs.
In general, secondary applicants must have been in continuous employment for a minimum of 1 year. However, secondary applicants on the following long-term social welfare payments may be considered:
- State Pension (Contributory)
- State Pension (Non-Contributory)
- Widow's, Widower's or Surviving Civil Partner's pensions,
- Blind Pension
- Invalidity Pension and Disability Allowance
Note: The requirement for applicants’ employment to be continuous was relaxed during COVID-19. This flexibility applies if applicants’ have periods of unemployment due to COVID-19 and meet other criteria. For more information on this see the FAQ’s on the Local Authority Home Loan website.
You can borrow up to 90% of the market value of the property. The maximum market value is different depending on where your home is located.
Interest rates for the Local Authority Home Loan are:
- 2.845% fixed interest rate for loans up to 25 years (APR 2.88%)
- 2.945% fixed interest rate for loans over 25 years and up to 30 years (APR 2.99%)
Note: Interest rates can change from time to time, but are set on the date you drawdown your loan.
A fixed interest rate means that your monthly repayments remain the same for the term of the loan. You can pay off all or part of your mortgage, but you may be liable for a breakage fee.
You must sign up to the local authority collective Mortgage Protection
Insurance (MPI) scheme. You pay MPI monthly in addition to your loan
How to apply for the Local Authority Home Loan
To apply for the Local Authority Home Loan, complete the application form (pdf). You can also get a paper form from your local authority. You submit your application and supporting documents to the local authority in the area where you wish to buy or build your home. You must complete and sign the declaration on the application form, which includes stating that the information you have provided in the form is correct.
The application form may ask for some information that you don’t have yet, for example, the address of the house you want to buy or build, and your solicitor’s details. Your application form will be accepted without this information, but you should include details of the county and area you are looking for your home, and state that your solicitor’s details are to be confirmed.
Your application form must be signed by all applicants and submitted to your local authority. You are advised to submit your application in person, so your local authority can review your application and ensure it is completed correctly. If you post your application and it is not completed correctly, the local authority will send it back to you.
You will get a decision in writing about your application approximately 6 to 8 weeks after submitting the completed application form. The loan offer is valid for 6 months from issue date.
You need to submit supporting documents with your application, some of which depend on your situation. The application form provides a checklist for applicants so that you can make sure you have all the documents required before submitting your application.
You will need:
- Evidence of insufficient mortgage offers of finance from two regulated
financial providers. This evidence must show the requested loan amount and
can be a:
- Letter of insufficient mortgage offer from a bank or building society
- Letter stating that the application is outside the lending criteria of the bank or building society
- A copy of a lender's mortgage calculator showing that you are unable to borrow the amount needed
- Photo ID (for example, current passport or drivers licence)
- Proof of address (current utility bill or bank statement dated within 3 months of the application)
- An original salary certificate. This is completed by your employer and has information about your job and wages.
- End of year Employment Detail Summary (P60)
- Tax balancing statement (P21), if applicable
- Most recent pay slips (3 if paid monthly, 6 if paid fortnightly and 12 if paid weekly)
- 12 months of your most recent bank account statements. This includes current accounts, savings accounts, loan accounts and credit union accounts. One of these accounts should show your salary lodgements.
- 6 months of your most recent credit card statements.
- Proof of your Personal Public Service (PPS) number
- Planning permission, if you are building your own home. (This requirement is at the discretion of your local authority, but in most cases you will need to submit planning permission with your application).
Additional supporting documents
If you are renting, self-employed, getting a social welfare payment or applying as a 'fresh start' applicant, you may also need other supporting documents when you are applying.
If you are a tenant:
- Renting private rented accommodation, you need evidence of 12 months of rent payments before applying
- Renting directly from the local authority, or under the Housing Assistance Payment (HAP) scheme or Rental Accommodation Scheme (RAS), you need a letter from the Rent Assessment Section of your local authority confirming that your rent assessment is up to date and the account has been clear for 6 months before applying
If you are self-employed you also need:
- An accountant’s report or your audited accounts for the previous 2 years
- A letter from an accountant confirming that your personal and business taxes are up-to-date and in order
- A tax return summary (Form 11) for the previous 2 tax years
- A current tax balancing statement
- A current preliminary revenue tax payment receipt
If you are getting jobseeker or other social welfare payments you need:
- Appendix 2 of the application form completed by the Department of Social Protection (this includes a statement of the total benefits you received in the previous tax year)
If you are applying as a 'fresh start' applicant you may need additional documents to show that you qualify for the loan even though you may not be a first-time buyer. The documentation you need depends on if you are applying as a fresh start applicant because your relationship has ended, or because you have exited insolvency or bankruptcy proceedings.
- If you are applying because your relationship has ended, you will need proof of this. If you are separated or divorced you will need proof of the divorce or separation, as well as evidence that you have no financial interest in the family home and details of any maintenance arrangement. If your relationship has ended but there is no divorce or separation agreement, you will need a sworn statement. This should state that there is no formal separation agreement, you have no financial interest in the family home, there are no court proceedings pending under family law legislation, and details about any maintenance arrangements.
- If you are applying after insolvency or bankruptcy, you will need proof that any property you previously purchased or built has been sold, or given up as part of a personal insolvency, bankruptcy arrangement, or other legal insolvency process.
There is more information about each of these requirements in the Local Authority Home Loan Borrower Information Booklet.
Where to apply for the Local Authority Home Loan
You should make an appointment with your local authority to submit your application form and supporting documents in person. If you post your application, it may be sent back to you if it is not completed correctly.
Note: The Local Authority Home Loan replaces the Rebuilding Ireland Home Loan, the old local authority mortgages and the Home Choice Loan, which are all no longer available.