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Mortgage-to-rent schemes
Introduction
Under two new mortgage-to-rent schemes, people who are having trouble paying their mortgages may be able to switch to renting their homes as social tenants. They will no longer own the home or have any financial interest in it.
They must first agree with their lender that they can no longer afford to pay the mortgage and that this situation is unlikely to change. The schemes are being launched on a pilot basis and are expected to be generally available at a later stage.
Rules
For you to qualify for the mortgage-to-rent option:
- You must have engaged with your lender's Mortgage Arrears Resolution Process (MARP) and your mortgage must have been deemed unsustainable under the Central Bank’s Code of Conduct on Mortgage Arrears (CCMA) (pdf)
- You must agree to voluntary repossession of your home
- You must have no significant positive equity in your home
- Its current market value must be less than €220,000
- You must be eligible for social housing and must apply for social housing
The appropriateness of your current home will also be taken into account and you may move to a more appropriate property under the mortgage-to-rent arrangement.
The mortgage-to-rent schemes come into operation after the voluntary repossession is agreed. The schemes will work as follows:
Model 1
The property is bought by an approved housing body (housing association or co-operative) at current market value and the household becomes a social housing tenant of the housing body. The purchase of the house is partly financed by a loan and partly from the Exchequer under the Capital Advance Leasing Facility (CALF).
Model 2
The mortgage lender becomes the long-term owner of the property and the household becomes a social housing tenant of the local authority. The local authority leases the property from the mortgage lender.
Detailed arrangements
As mentioned above, the mortgage-to-rent schemes are only being piloted at present. More details will be available when the schemes are finalised and rolled out more widely.
Further information
The Mortgage-to-rent schemes were recommended by the Inter-Departmental Mortgage Arrears Working Group (the Keane Group) in its report (pdf) of September 2011. Read more in our document on responses to mortgage arrears and personal debt.
