Affordable Housing. Guidance Notes

Transcription

1 Affordable Housing Guidance Notes

2 Introduction Guidance notes for applicants wishing to apply for affordable housing under Part V of the Planning & Development Act The Scheme is made under the provisions of Section 98 of the Planning and Development Act 2000 and Section 8 of the Housing (Miscellaneous Provisions) Act 2002 and sets out the criteria to be applied and the procedures to be adopted by Cavan County Council in the allocation of affordable housing to eligible applicants. The Scheme incorporates a points system for the allocation of such dwellings which is based on the guidelines issued by the Department of the Environment, Heritage and Local Government for Local Authorities in the allocation of such houses. The points scheme will only be implemented where the number of eligible applicants exceeds the number of affordable houses available for allocation at any given time. Who qualifies under the Scheme? The main qualification under the Scheme is that the repayments on a loan for a similar house at the full price would exceed 35% of the applicant s monthly income net of income tax and pay related social insurance. (Annual disposable income) Let us say that the price of a house is 200,000. At current interest rates the monthly repayments would be approximately 1,043. If Mr. White s net monthly income is 3,000 then Mr. White does not qualify ( 3,000 x 35% = 1,050). If Mr. Green s net monthly income is 2,500 then Mr. Green qualifies ( 2,500 x 35% = 875). In the case of joint borrowers the above calculations are based on the principal earner s income plus half of the second earner s income. Other conditions In order to qualify for the Affordable Housing Scheme, an applicant must be: 1

3 A first time buyer (there may be some exceptions to this, e.g. if your are divorced) In need of housing, in employment for at least 6 months, and whose income satisfies the income test outlined below or A person whose application for local authority housing has been approved by the local authority or A local authority tenant or tenant purchaser who wishes to surrender his/her dwelling to the local authority and buy a private house or A tenant for more than one year of a dwelling provided by a voluntary body who wishes to surrender his/her present house to the voluntary body and buy a private house. Previous/Existing home ownership Applications will be accepted from eligible persons who were/are previous home owners (inc. Tenant Purchasers). This may result from a number of reasons such as family break-up, unfitness of existing accommodation, overcrowding, etc. Applicants may be required to contribute towards the cost of the dwelling from the proceeds of the sale of the former house but in all circumstances will not be allowed to retain ownership of their former dwelling. Decisions in relation to eligibility/contribution will be at the sole discretion of Cavan County Council. Existing Tenants/RAS Tenants Existing Tenants of Cavan County Council or of dwellings in the County provided by approved Housing Bodies will be eligible to apply provided they meet the eligibility criteria and that they surrender their dwelling in a suitable condition. This provision also applies to tenants appointed by Cavan County Council under the Rental Accommodation Scheme (RAS). 2

4 How do I apply for inclusion in the Scheme? You should submit your application to Cavan County Council on the Council s Application form, accompanied by the necessary documentation. What happens then? Your name will be added to the Affordable Housing list and your application will be considered when houses become available under the Affordable Scheme in the areas where you have indicated an interest. Applicants should note that it is not possible to give a specific timeframe for the allocation of specific affordable units, as this is wholly dependant on individual Builders/Developers schedules. Applications from Non-EU Nationals All citizens of the European Union will have the same rights and entitlements in relation to eligibility for affordable housing as Irish Citizens. In the case of non-eu nationals, Cavan County Council will comply with whatever rules, regulations and government directives are currently in force in relation to eligibility for state services including housing accommodation. Where do I apply for a loan? Successful applicants will receive a provisional offer from Cavan County Council and should then apply for a loan from one of the following lending agencies:- o Bank of Ireland (Breakthrough Mortgage) o E.B.S. (Home Access) o IIB Homeloans Limited (Advantage Mortgage) The normal qualification criteria for Local Authority Annuity Loans and Shared Ownership Loans will apply where prospective house purchasers apply to the Local Authority for loan approval. 3

5 Stamp duty The normal rates of stamp duty apply to an affordable house. Mortgage Subsidy A mortgage subsidy is to help with your mortgage payments. To qualify, your household income needs to have been less than 28,000 (before tax and social insurance is taken off) in the previous tax year. The subsidy will be paid to the Local Authority and will reduce the monthly payments due on the mortgage. The mortgage subsidy will be set at the following amounts: Household Income per annum Subsidy payable per annum 13,000 and under 2,550 13,001 to 15,500 2,300 15,501 to 18,000 2,050 18,001 to 20,500 1,800 20,501 to 23,000 1,550 23,001 to 25,500 1,300 25,501 to 28,000 1,050 Over 28,000 NIL Household income is the total gross income of the purchaser and his/her spouse or joint purchaser. 4

6 Subsidy applicants must satisfy Cavan County Council that their personal tax affairs are in order. Purchasers in receipt of the mortgage subsidy will have their household incomes for the tax year ended on the preceding 31 st December reviewed before 1 st July each year and the subsidy adjusted as appropriate for the subsequent year. Mortgage Allowance The mortgage allowance scheme is an allowance of 11,450 is payable over a five (5) year period. If you are a tenant of the local authority or you are buying the home you previously rented from the local authority, and you want to buy an affordable home, you may qualify for the mortgage allowance scheme. The allowance is paid directly to the lender providing your mortgage and your repayments are reduced for the first five years of your mortgage. The allowance paid in any year cannot be more than the total mortgage repayments due in that year. You may qualify for the mortgage subsidy and the mortgage allowance scheme, but you can only claim for one of them. Which of these benefits you most will depend on your income. Sale or resale of dwellings Normally the consent of the Local Authority will be required to the resale of affordable houses. Where a house is sold within 20 years from the date of purchase, the house owner will be required to repay to the Local Authority a percentage of the proceeds in accordance with the following formula: Y x 100 Z Where Y is the difference between the market value of the house at the time of sale and the price actually paid, Z is the market value of the house at the time of sale by the Local Authority to the person. The amount repayable will be reduced by 10% in respect of each complete year of ownership after year 10. 5

7 Example A A property is acquired under the Affordable Housing Scheme in 2006 for 150,000. The property had a market value of 180,000 at time of sale. In 2015 the property is disposed of for 220,000. Y = 180,000 less 150,000 = 30,000, Z = 180, ,000 x ,000 = 16.66% Amount repayable to the Local Authority 220,000 x 16.66% = 36,652. Example B A property is acquired under the Affordable Housing Scheme in 2006 for 150,000. The property had a market value of 180,000 at time of sale. In 2018 the property is disposed of for 220,000. Y = 180,000 less 150,000 = 30,000, Z = 180, ,000 x ,000 = 16.66%. Amount repayable to the Local Authority 220,000 x 16.66% = 36,652 less 20% (10% for each complete year after year 10) = 7,330 Net repayment to the Local Authority = 29,322. 6

8 Structural Guarantee/Structural Survey An applicant to whom an offer of an affordable house has been made should satisfy himself/herself as to the structural soundness of the affordable home before completing the purchase. Improvements to the house An allowance may be made for any material improvements carried out to the house while in its ownership. Material improvements would cover extensions/conversions but not decoration or garden improvements. False or misleading information Any applicant who deliberately gives false or misleading information, or who fails to give or withholds relevant information in order to further their application will be liable for one or more of the following sanctions, depending on the circumstances of each case: Deferral of any consideration of their application for a period of time up to a maximum of 12 months Cancellation of their application Withdrawal of an allocation of a dwelling where Cavan County Council is satisfied that, were it not for the giving of false or misleading information, or the withholding of relevant information, the allocation in question would not have been made. Further information on the Affordable Housing Scheme is available from Housing Section. (Telephone No ). 7