Q. What is the First Home Scheme (FHS)?
This is a new shared equity housing program launched by the Government on Thursday, July 8, 2022. The purpose of this is to enable people to purchase new homes. In exchange for a portion in your new home, the State and participating banks under the FHS will contribute up to 30% of the purchase price. You don't have to, but you can always purchase the stake back if you want to.
Q. Am I eligible for the First Home Scheme?
There are certain requirements you must meet. Firstly, you must be over the age of 18 and have the legal right to live in Ireland. Secondly, you must be either a first-time buyer which means you haven’t purchased or built a home to live in or you can be a fresh-start applicant. As a fresh-start applicant, you could have formerly owned a home but no longer have a financial stake in it for example you are now divorced or have gone through bankruptcy. (If purchasing a house with another individual they must also either be a first-time buyer or fresh-start applicant).
Q. What type of property can I purchase under the FHS?
It has to be a newly constructed home or apartment in a private development. Different local authorities have different maximum home prices. This means that if the price of your property is higher than this amount, you are not eligible for the FHS. For example, in Galway the price limit for houses is €400,000 and €450,000 for apartments, however in Kildare its price limit is €400,000 for all properties.
Q. Are all banks participating in this scheme?
The banks that are currently participating is as follows:
1.Permanent TSB,
2.EBS,
3.Bank of Ireland,
4.Allied Irish Bank and Haven Mortgages.
Under Central Bank rules you have to borrow 3.5 times your gross annual income, and you need to put down a deposit equal to at least 10% of the property's buying price.
Q. What steps are involved in getting back the equity share?
The first step is to get your home valued. This valuation report will then be sent to the FHS, and they will give you a redemption quote, this quote is the figure that needs to be paid off in order to acquire you to have full ownership over your property.
Q. Are there any additional charges?
You will only be charged a fixed rate if on the 6th year you have not brought out the FHS equity share. This is noted as a maintenance charge, it represents a portion of the price the FHS paid for your house. The longer you participate in the scheme, the more the service charge amounts become. The service charge can be paid in monthly instalments or annually.
Q. How can I apply for the First Home Scheme?
Firstly, you can check if you qualify by using the FHS eligibility calculator. The next step is to create your application, go to www.firsthomescheme.ie. If accepted, you will receive an eligibility certificate outlining your eligibility for a range of amounts.
This article is for information purposes only and does not constitute specific legal advice, which should be obtained at all times. For more information, contact Eamon Concannon of Concannon Solicitors on 091-700 172/091 700173 or e-mail concannonsolicitors@gmail.com with any queries
