Only eight deals have been completed under the Government’s mortgage-to-rent scheme since it was launched in June.
The controversial initiative targets low-income families whose mortgage situation has become unsustainable.
It ensures the family remains in their home while ownership is transferred to an approved housing body, which in turn rents it to the original owners.
In a written Dáil response to Fianna Fáil’s Barry Cowen, minister of state for Jan O’Sullivan admitted that “the number of completed transactions is low, but significant progress has been made”.
The scheme was launched on a pilot basis last February and Ms O’Sullivan said that 708 applications were lodged last year by the lender, but by year-end only eight transactions had been completed — 1% of the overall total.
“My department has budgeted for the resolution of roughly 250 mortgage-to-rent transactions in 2013,” said Ms O’Sullivan.
“At the end of 2012, 558 cases had been submitted by lenders. Of these, 289 were being processed and 136 borrowers had been engaged with or were in the process of being engaged with by the lender. Sales had been agreed on eight properties, with two of these having been completed.”
Ms O’Sullivan said all the main lenders and so-called subprime lenders are supportive of the scheme. “It’s important to bear in mind that the transition from being a homeowner to a social housing tenant is a major one for families,” she said.
“Mortgage-to-rent or other such interventions cannot be rushed for any party. For example, the process provides a 60-day decision period and a 28-day cooling off period.
“My department estimates that the overall timeframe per case, from start to completed transaction, will be up to eight months. This compares favourably to the timeframes in other jurisdictions operating similar schemes.”
The figures for 2012 show that two completed transactions took place in Dublin, along with one each in Dublin Fingal, Dublin South, Kildare, Kilkenny, Tipperary North, and Wicklow.
Mr Cowen described the number of completed deals as disappointing. “The scheme is in place eight months now,” he said. “There needs to be a concentrated effort to make the scheme work and it needs to be publicised much better.”
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