Affordable housing breakthrough

BANK of Ireland Mortgages announced yesterday it has become the first private sector institution to enter the affordable housing market.

From yesterday the bank is offering mortgages to people sanctioned for affordable housing by their local authorities.

Called "Breakthrough", the mortgage is the first of its kind in the country and it will offer loans of up to 97% of the discounted purchase price. The Irish Financial Regulator, IFSRA are aware of the 97% loans offer and have no difficulties with it. A spokesman said the same guidelines apply to these loans as other mortgages.

Last night a Bank of Ireland spokeswoman said she expected members of the gardaí and the teaching professions to be among those who will qualify for the cheaper homes.

Minister for Housing and Urban Renewal Noel Ahern welcomed the development yesterday. Other banks are also expected to sign up for the scheme in the months ahead, he said. Substantial growth in affordable housing output over the coming years is expected. Since 1997 over 13,000 households have benefited through affordable housing measures and over 11,000 units will be delivered from the various affordable schemes between 2005 and 2007.

This year estimates of 3,500 affordable housing units from the various schemes are expected, the minister said.

Joe Larkin, managing director, Bank of Ireland Mortgages said: "We are very pleased to announce this product is now available to the market. As the first lender in the market, we are confident this product will make home ownership a reality for many people."

The bank anticipates up to 11,000 affordable homes will become available to purchasers over the next two to three years. Sole borrowers can borrow up to five times their income, and joint borrowers up to four and a half times their combined income, subject to the normal lending terms and conditions.

Anyone applying for a Breakthrough mortgage must have been allocated a property by their Local Authority before applying for their mortgage. They must also have been issued with a 'Confirmation to Lender' certificate from the Local Authority.

These are the steps that people applying for an affordable house must follow:

* The customer registers and makes an application for an affordable house with their local authority.

* The local authority assesses the customer application and conducts a housing suitability assessment with them.

* If the customer is eligible, the local authority will offer them a property.

* The customer accepts this property from the local authority.

* The local authority issues the customer with a 'Confirmation to Lender' certificate.

* The customer submits an application for a mortgage with a Bank of Ireland mortgage adviser.