Mortgage to rent scheme 'a real alternative for Cavan people in debt'

Cavan Co Council’s Housing SPC has backed the mortgage to rent scheme as a real alternative for people in unsustainable mortgage debt.
 
At the monthly meeting recently, representatives heard that recent changes in the earnings threshold and the increased allowance for house prices meant it was a more realistic programme for Cavan families in dire financial straits.
 
Currently there are over 600 people with distressed mortgages in the county – householders unable to make any payment for at least two years – and it is envisaged that mortgage to rent (MTR) could provide a solution for a significant percentage of that number.
 
Under the old scheme, there was a very low pick-up on the scheme but heard from a mortgage to rent expert that the extensions to what a household could earn, though still not high enough, meant mortgage to rent could help to solve a huge national problem where at least 28,000 cases are in existence.
 
“This scheme is designed to help those in difficulty, at risk of repossession and potentially facing homelessness” explained Stephen Curtis, Head of Operations Home For Life, which is a mortgage to rent operator.
 
He said his company was one of several spearheading a  renewed drive to keep householders in their current homes debt-free as long-term tenants of their local authority.
 
Home For Life works with homeowners, lenders and the local authority to keep unsustainable mortgage holders in their current homes in an attempt to avoid disruption for families, he pointed out.

Under the scheme, a property is sold to Home For Life and then leased back to the State through the local authority which, in turn, sublets the house or apartment back to the homeowner. The homeowner pays an affordable income-based rent to their local authority.

As part of the scheme in Cavan, the local authorities would then undertake to provide for the ongoing long-term housing needs of the applicant and other eligible residents of the property for as long as their housing need exists.

Home For Life CEO Paul Cunningham said there had been a huge interest in the MTR scheme particuarly over the past six months. He agreed with his colleague that it was a real alternative for people.

“We are finding that people in financail distress are often only becoming aware of this as a possibility now. Most of the housedwellers we talk to are happy that they can stay in their own home knowing there is the possibility of buying it back should their circumstances change,” he emphasised in a statement.

Mr Cunningham also highlighted how under the new scheme there was a shorter length of time in getting a solution for individual cases. “It was a year or even 18 months up to last year but we are reducing that to about six months now, which is something that everyone is happy with,” he added.