Government’s €400m ‘First Home Scheme’ to help first-time buyers begins operations today

First-time buyers who cannot afford newly built homes or apartments can from today apply for the Government’s €400 million shared equity scheme.

The €400m ‘First Home’, a new scheme set up to make it easier for First-Time Buyers to afford a new build home as part of the Government’s Housing for All strategy.

To qualify for the First Home Scheme, you must meet certain criteria.

You must be a first-time buyer or ‘fresh start’ applicant who is over 18 and has the right to live in Ireland.

You are a first-time buyer if:

  • You have not previously bought or built a property to live in.
  • You do not own or have an interest in any property in Ireland or abroad.

You will not qualify as a first-time buyer if you have owned a home abroad or have previously inherited a home.

You are a ‘fresh start’ applicant if you previously owned a home, but you no longer have a financial interest in it because:

  • You are now divorced, separated, or your relationship has ended
  • You have gone through personal insolvency or bankruptcy

If you are buying the property with someone else, they must also be a first-time buyer or fresh start applicant.

The property you buy must be a newly built home in private development. The scheme does not cover second-hand homes or self-build homes.

Your home must be within the price limits for your area

Your new home must cost less than the price limit for your local authority area. These limits are different depending on where you buy and what type of property you purchase. The limits are linked to the median price for first-time buyers in each area. They will be reviewed regularly and changed if needed. See the price limits for each area below:

How much funding can I get and are there any costs?

The First Home Scheme is a shared equity scheme. This means you can get funds from the scheme in return for a percentage ownership of the property. You can buy back this percentage if and when you want, and then you will fully own the home.

You can get up to 30% of the market value of your new property with the First Home Scheme. This is reduced to 20% if you are also getting the Help to Buy Scheme. The minimum amount you can get is 2.5% of the property purchase price, or €10,000, whichever is higher.

Are there any charges?

There is no charge for the First Home Scheme for the first 5 years that you own your home. But, if you have not bought out the FHS equity share in your home by the sixth year, a service charge will apply. This service charge is for the maintenance of the First Home Scheme. It is a percentage of the amount the FHS paid when you bought the home. The service charge amounts increase the longer you stay in the scheme. They are:

  • 1.75% for years 6 to 15
  • 2.15% for years 16 to 29
  • 2.85% for years 30 and over

These rates are fixed.

You can pay the service charge annually or in monthly installments. If you can’t afford the service charge you can pay a reduced amount, pause the payments for a set amount of time or defer them altogether. There is no additional cost for deferring the service charge, but it will eventually need to be paid. For example, it will need to be paid if you want to pay back the equity share, to sell the home or if you die.

How do I apply for the First Home Scheme?

You apply online for the First Home Scheme. If you cannot apply online or need help filling out the form, contact the FHS and they will help with this.

There are a number of steps to the FHS process:

  1. Check you qualify: use the FHS eligibility calculator to check if you qualify.
  2. Get mortgage approval in principle: you need to get mortgage approval from a participating lender to apply.
  3. Apply online: you need to give some personal details as well as information about the property you want to buy and your solicitor. You also need to provide:
    1. Mortgage approval in principle
    1. Photo ID for everyone applying
    1. Proof of address for all homebuyers (this must be dated within the last 6 months)
  4. Have your application assessed: your application and documents will be reviewed by the FHS.
  5. Get your eligibility certificate: if you qualify for the scheme, you will get an FHS eligibility certificate. This gives you an estimate of how much equity you can get from the FHS. Give the certificate to your mortgage lender to include in your mortgage application.
  6. Get mortgage approval: get mortgage approval from your lender. They will give you a mortgage letter of offer.
  7. Upload letter of offer to customer portal: upload your mortgage letter of offer to the FHS website along with any other documents needed.
  8. Get your FHS customer contract: if your FHS application is approved, you and your solicitor will get a hard-copy of your customer contract for the equity share. This is a legal contract between you and the FHS, which must be signed by you and witnessed by your solicitor.
  9. Get your FHS funds: your solicitor will send the signed customer contract and other forms to the FHS. The FHS will then transfer the funds to your solicitor’s account, so they can complete the purchase of your home in line with the mortgage process.

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