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Home Choice loan scheme receives just four applications
Sunday, January 25, 2009 By Emma Kennedy
Local authorities have received just four applications for the government’s new Home Choice loan scheme since it opened to first-time buyers on January 1.

The scheme was introduced in the budget to kick-start buying by would-be buyers ‘‘who wish to buy now but who have been affected by the credit squeeze’’.

It is operated by four local authorities, with the support of a unit in the Affordable Homes Partnership (AHP).

An AHP spokeswoman said January was always a quiet month for home purchases, but the level of interest in the scheme was expected to pick up in the coming weeks. A spokesman for the Department of the Environment said that, while the scheme had been available since January 1, it was only now that it was ‘‘fully operational’’.

‘‘Staff from the four designated local authorities have received training on how the scheme will be operated and what their role will be,” the department spokesman said.

‘‘The organisational structures in the local authorities have been agreed and set up.”

However, The Sunday Business Post has learned that the local authorities operating the scheme have been granted an exemption from regulatory requirements for providing home purchase loans.

A spokeswoman for the Financial Regulator said a level of discretion allowed for an exemption to be granted when the provision of credit was for ‘‘charitable or public purposes’’.

Some concerns have been raised about the prudence of the scheme, given the poor economic climate, and a number of complaints were made to the European Commission about the scheme.

The Department of the Environment spokesman said the government responded to the commission on December 15 and ‘‘rejects the claim that Home Choice Loans are a state aid’’.

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