The First Home Scheme (FHS) is an affordable housing scheme, which supports people to buy new homes. The FHS is a shared equity scheme, where the State and participating banks pay up to 30% of the cost of your new home in return for a stake in the home. If you want, you can buy back the stake at any time, but you don’t have to. The scheme is available nationwide for first-time buyers and certain other people who want to buy a new home but can’t afford to. Your income is not assessed for the FHS.
How do I qualify for the Scheme?
To qualify for the First Home Scheme, you must meet certain criteria. You must be a first-time buyer or ‘fresh start’ applicant who is over 18 and has the right to live in Ireland. You will not qualify as a first-time buyer if you have owned a home abroad or have previously inherited a home. If you are buying the property with someone else, they must also be a first-time buyer or fresh start applicant
The property you buy must be a newly built home in a private development. The scheme does not cover second-hand homes or self-build homes. The scheme only applies to properties that are bought as your home. You must live in it as your only place of residence
Who is considered a ‘fresh start’ applicant?
You are a ‘fresh start’ applicant if you previously owned a home, but you no longer have a financial interest in it because you are now divorced, separated, or your relationship has ended or you have gone through personal insolvency or bankruptcy
Are there any limits on the price of the property I buy?
Your new home must cost less than the price limit for your local authority area. These limits are different depending on where you buy and what type of property you purchase. The limits are linked to the median price for first-time buyers in each area. They will be reviewed regularly and changed if needed. The limit for Cork County is €350,000 for all properties while in Cork City the limit is €450,000 for houses and €500,000 for apartments.
Are there restrictions on where I can get my mortgage?
Your mortgage must be with a lender that is participating in the scheme. Participating lenders currently include, Bank of Ireland, Permanent TSB and Allied Irish Bank which includes AIB, Haven Mortgages and EBS.
You must borrow the maximum amount available to you from one of these lenders. Under Central Bank rules, the general limit for mortgage borrowing is 3.5 times your gross annual income.
If you are getting a Macro Prudential Exception (MPE) with a participating lender you will not qualify for the FHS. An MPE is when your lender lets you borrow above the Central Bank limits. Lenders have flexibility to do this for a certain percentage of the mortgages they provide.
You must have a deposit of at least 10% of the property’s purchase price.
How much funding can I get and are there any costs?
The First Home Scheme is a shared equity scheme. This means you can get funds from the scheme in return for a percentage ownership of the property. You can buy back this percentage if and when you want, and then you will fully own the home. You can get up to 30% of the market value of your new property with the First Home Scheme. This is reduced to 20% if you are also getting the Help to Buy Scheme. The minimum amount you can get is 2.5% of the property purchase price, or €10,000, whichever is higher.
There is no charge for the First Home Scheme for the first 5 years that you own your home. But, if you have not bought out the FHS equity share in your home by the sixth year, a service charge will apply. This service charge is for the maintenance of the First Home Scheme. It is a percentage of the amount the FHS paid when you bought the home. The service charge amounts increase the longer you stay in the scheme. They are:
• 1.75% for years 6 to 15
• 2.15% for years 16 to 29
• 2.85% for years 30 and over
Can I buy back the equity share in my home?
You can buy back the equity share in your home at any time. But, you don’t have to.
If you choose to, you can buy back the full equity share in one payment, or pay it back partially as you can afford to. However, the minimum amount you can pay back is 5% of the original equity amount and you can only make 2 partial payments a year.
The equity share in your home is a percentage of the market value of your home. So, if property prices increase, the amount you have to pay back will increase.
How do I apply?
There are a number of steps to the FHS process. You should first check if you are eligible for the scheme and you will then need to get mortgage approval in principal from a participating lender. You then apply online for the First Home Scheme. If you cannot apply online or need help filling out the form, contact the FHS and they will help with this. Their telephone number is 0818 275 662 and the website is www.firsthomescheme.ie where you will find more detailed information about the scheme.
If you need further information about this scheme or you have other questions, you can call a member of the local Citizens Information Service in West Cork on 0818 07 8390. They will be happy to assist you and if necessary arrange an appointment for you.
The offices are staffed from 10am -5pm from Monday to Thursday and on Friday from 10am -4pm. Alternatively you can email on firstname.lastname@example.org or log on to www.citizensinformation.ie