The new Government Equity Loan was announced by the Minister for Finance, Brian Lenihan, in Budget 2009. The loan is a single streamlined scheme for affordable housing.
From the buyer's perspective, the purchase transaction under the new arrangements will remain largely unchanged. However, instead of the home being sold at a discounted price, with the value of the discount being subject to a reducing clawback, the State will take an equity stake in the affordable home sold. The purchaser will have the option of either buying out the remaining equity in steps or at the end of a fixed period.
The new arrangement will introduce a number of benefits for affordable home buyers. It will bring greater flexibility to the purchase of an affordable home, allowing buyers’ initial outlay to be tailored to their particular circumstances. It will also make it easier for affordable purchasers to re-locate where their circumstances necessitate this.
Implementation of the new arrangement will also introduce greater equity into the system and provide a basis for achieving greater consistency across the schemes and across different areas of the country.
Timing of the introduction of the Government Equity Loan has not yet been determined. Legislation is required to give effect to this change. This will be done through an amendment to the Housing (Miscellaneous Provisions) Bill during its passage through the Oireachtas. In the meantime, the clawback arrangements will continue to apply in relation to the purchase of affordable housing.