First Home Scheme now includes First Time Buyers with a Notice of Termination

2023-04-20

Help To Buy

General

On 31 March 2023, the Minister for Housing announced that the First Home Scheme (FHS) will be expanded to include eligible First Time Buyers who have received a Notice of Termination and who wish to purchase the home they are currently renting. This is a welcome move that provides certainty to tenants who may be facing uncertainty about their housing situation and offers a pathway to homeownership for those who may have been renting for an extended period and may have found it challenging to save for a deposit due to the high cost of rent.

What is the FHS?

The FHS is a financial support scheme launched in July 2022 in Ireland to bridge the affordability gap for First Time Buyers between their mortgage and deposit, and the price of their home. It can fund up to 20% of the purchase price of your home if you are availing of the Help to Buy (HTB) Scheme, or 30% if you are not using HTB relief. In return for the financial support, the government will get an equity share in the home equal to the percentage of the funding they have provided (i.e. up to 30%).

For example, your household income is €70,000 and you wish to buy a home with a purchase price of €400,000. The minimum deposit required is €40,000, which is 10% of the purchase price of the home. The maximum mortgage available to you is €280,000, which under the new mortgage lending criteria is up to 4 times your income. The affordability gap between your mortgage, deposit and the price of your home is €80,000. You can therefore apply for the FHS to bridge the €80,000 affordability gap.

Who is eligible for the FHS?

The FHS is open to First Time Buyers; people who previously purchased or built a home in Ireland with a spouse, civil partner or partner, and that relationship has ended (provided that they do not retain a beneficial interest in the previous property); and people who previously purchased or built a home in Ireland and have sold that property as part of a personal insolvency or bankruptcy arrangement, or other legal process as a consequence of insolvency.

Now, under the expanded criteria, the FHS is also open to First Time Buyers who have a Notice of Termination and who wish to purchase the second-hand home they are currently renting.

To be eligible for the FHS, you must:

Have mortgage approval with a participating lender (i.e. AIB, Haven Mortgages, EBS, Bank of Ireland, permanent tsb)
Borrow the maximum mortgage amount available to you, i.e. up to 4 times your income
Not be availing of a mortgage exception
Have a minimum deposit of 10% of the home’s purchase price.

How do I apply for the FHS?

First, check your eligibility using the FHS Eligibility Calculator available at https://www.firsthomescheme.ie/eligibility-calculator/. A screen print of the Eligibility Certificate is required when applying for a mortgage.
If you are eligible, register with the FHS and submit an application online.
You will need to provide your personal details, qualification details (e.g. whether you are availing of the HTB Scheme, etc.), property details, your solicitor’s details.

When submitting your application, you need to upload a copy of your Approval in Principle from a participating lender, photo ID for all homebuyers, and current address verification. Under the new eligibility criteria, if you have received a Notice of Termination from your landlord, you will have to provide confirmation thereof.

The expansion of the FHS is a positive step for First Time Buyers who are looking to escape the rental trap and become homeowners. If you’re a tenant who has received a Notice of Termination and you’re looking for certainty about your housing situation, check out our FHS Guide for more information or contact us today.