The First Home Scheme (FHS) / Shared Equity Scheme was introduced in July 2022 aimed at first time buyers & other eligible homebuyers in a bid to close the gap between the max mortgage available & the property purchase price i.e., your deposit. The FHS can run alongside the government Help to Buy scheme (HTB) which together can provide a significant contribution towards your deposit & therefore make the hopes of buying your own home a possibility.
As mentioned above, this scheme only applies to First-time Buyers and other Eligible Homebuyers who:
1/Previously purchased or built a home with a spouse, civil partner or partner and that relationship has ended (you must not retain any beneficial interest in the previous property)
2/You have sold or divested of your home as part of a Personal Insolvency or Bankruptcy Arrangement or other legal arrangement as a consequence of insolvency
To qualify for this scheme, the property must also meet the following criteria:
Newly built properties only
House or Apartment that is your only home
Purchase price is within the local authority price ceilings – see county to county price ceilings here: https://www.firsthomescheme.ie/about/property-price-ceilings/
You are permitted to “rent a room” as long as the property remains your principal place of residence
You are not entitled to rent out the property
How does the scheme work:
You must have mortgage approval from an approved participating lender which we in Acorn Financial Services can assist with. Click the following link to send your details for a call back from one of our experienced financial advisors: https://www.acorn.ie/contact-us
You must borrow the maximum mortgage amount available to you
Maximum Shared Equity is 30% of the property purchase price if not availing of HTB
Minimum Shared Equity is 2.5% or €10,000 whichever is HIGHER
If availing of the HTB scheme then the maximum under this scheme is limited to 20%
Self-builds are excluded from the scheme
This is an equity stake in the property which comes with service charges outlined as follows:
Service charges are applied from year 6 and accrue daily as follows:
Years 0 to 5 0%
Years 6 to 15 1.75%
Years 16 to 29 2.15%
Years 30+ 2.85%
Redemption rules:
You can pay back the equity through overpayments direct or when you sell the home
A property valuation will be required from a First Home Scheme valuer to determine the redemption figure
Partial redemptions are allowed but must be a minimum of 5% of the original FHS equity amount
Maximum 2 redemptions in any 12-month period
Mandatory redemptions are required if:
You switch mortgage to a non-participating lender
You sell this property
The property is no longer your principle place of residence
Homeowner dies (in joint cases where the last homeowner dies)
Borrowing top-up rules:
Top-ups against the property are allowed subject to lender criteria
First Home Scheme must be informed in advance and can object
In summary, due to the challenges in the current housing market making it difficult for some to purchase their own property, Acorn Financial Services, with almost 30 years of experience, welcomes the introduction of the First Home Scheme as it has widened the net of potential buyers who previously had no way of owning their own home or were very limited in the choice of properties due to personal savings + max mortgages available. Get in touch with us today if you want more information on your options for purchasing your own home.