Úna Joyce, Senior Executive Officer, April 2016 Shared Ownership Restructuring Solutions

Shared Ownership Scheme was introduced in 1991 Designed to facilitate access to home ownership to those who were unable to buy a home outright with a conventional mortgage. Under the Shared Ownership Scheme the borrower initially acquires a share (minimum 40%) in a house and rents the remaining share/equity from the Local Authority, with an understanding to purchase the remaining share/equity within a 25 year period. The scheme as originally introduced in 1991 was changed significantly from January 2003 resulting in two loan type and two sets of Shared Ownership borrowers each with different repayments arrangements. Background to Shared Ownership

A total of 16,502 loans were issued Nationally from 1992 to ,329 loans were issued by Dublin City Council. Index Linked –Pre 2002 (1991 to 2002)  Issued 3,944  Remaining 294 Post 2002 (2003 to 2011)  Issued 1,385  Remaining 779 Background to Shared Ownership

Persisting Difficulties: ILSO Borrowers are not making provision to acquire the Rental Equity Balance (REB) after 25 years Advanced age and reducing income limits the possibility of the borrower raising the finance to repay the REB Significant positive equity, where present, may not be realisable without the sale of the property High loan amounts and negative equity Changing family sizes Rent increase of 4.5% per annum, is making repayments unaffordable for many borrowers year on year

Loan Book – 31 st March 2016 Value of TOTAL Loan Book€282,804, Total Value of Loan Book – Shared Ownership Loans €154,226,184 (1073) Value of Loan Book – Shared Ownership Loans –ILSO Pre ’02 -Value of Accounts in arrears €22,411,439 (294) €1,946, Value of Loan Book – Shared Ownership Loans – Post ’02 Value of Accounts in arrears €131,814,745 (779) €10,598,864 (473)

Proposals Where the borrower has made no provision for the REB and where the annuity has been re-paid in full: - Offer a fixed rate (3%) annuity loan Over a maximum of 15 year term Or up to age 70

Proposals Where an annuity and/or REB balance exists: - restructure all debt to a full annuity loan at the prevailing variable interest rate with a mortgage charge for all sums owing on property repayable up to a maximum age 70 at a repayment amount affordable to the borrower and any balance outstanding at age 70 to be frozen and repaid by way of lump sum payments, property resale or from the borrower’s estate

Benefits to Borrower the benefits to Borrower will include : 100% ownership of the property affordable monthly repayments easier access to finance in acquiring REB MPI cover for full 100% of debt flexibility in dealing with changes in household size

Benefits to Local Authority While the commitment for the Local Authority to the Housing Finance Agency(HFA) remains, the benefits include: reduced exposure to unpaid REB increased security on outstanding debt through all sums owing mortgage charge broadened offering to those in MARP consistency across loan book

Housing Loans & Grants Block 2, Floor 2 Civic Offices Dublin 2