What is the first home scheme?

The first home scheme (FHS) is an affordable housing initiative launched in July 2022. The scheme’s primary focus is to assist those looking to purchase their first home. The initiative works using a shared equity format, whereby banks and mortgage lenders contribute up to 30% of the overall value for a stake in the property. 

The scheme is initially available to first-time home buyers whose mortgage is through AIB, Permanent TSB or Bank of Ireland.

What is an equity share?

The first home scheme utilised an equity share model. This works by certain mortgage providers offering to buy a stake in your property. Depending on the buyer’s preference, this stake can either be temporary or permanent.

So as an example, if the first home scheme provides you with 15% of the equity required to purchase the property, they will retain 15% of the ownership of the property until it’s sold or you decide to pay it back.

It’s important to remember that equity interest is a percentage and not a fixed amount. This means that the amount of money owed will fluctuate in tandem with the property’s value.

How can I pay it back?

For the most part, the equity can be paid back in one go or in affordable instalments. However, some eventualities result in the full amount being required to be paid back. We will cover those in more detail later in this article.

Who Qualifies for the First Home Scheme?

The First Home Scheme is primarily aimed at first-time buyers who wish to purchase a home on a “new development”. These buyers usually need help to finance the amount required through their mortgage and deposit.

There is a second demographic who are eligible to apply. Under the Government’s “Fresh Start Principle”, people who are divorced, separated or who have undergone insolvency proceedings and have no capital remaining in their former home will also be eligible to apply.

If you want to check your eligibility, go to First Home Scheme Eligibility.

What other criteria applies?

You must be a first-time buyer or part of the ‘fresh start’ initiative. You must be aged 18 and over and have the right to live in Ireland.

You are a first-time buyer if:

• You have yet to purchase or build a property to live in.
• You do not possess any financial interest in any property in Ireland or abroad.

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

For the first five years, the First Home Scheme is free, but if you decide not to buy out the FHS Equity share by year 6, a service charge will be applied.

Much like the equity stake, services charges are based on a % rather than a fixed amount.

6 – 15 Year	1.75%
15 – 30 Years	2.15%
30+ Years	2.85%

These rates are fixed.

You can pay the service charge either annually or in monthly instalments; if you cannot afford to pay the service charge, then there is an option to pay a reduced amount. There are options to pause and defer payments also.

Can I buy back the equity share in my home?

Yes, you can buy back the equity in your home, and this can be done as either a lump sum or in affordable instalments. If you pay back the loan before Year 6, then there will be no service charge for using the FHS.

What is the process for buying back the equity share?

In order to buy the equity back in your home, you will need your home to be valued. The valuations must be done by an approved FHS Valuer. If you are unsure of whom to use, you can find a list of accredited FHS valuers on the portal; an FHS valuation is valid for 12 months.

Once you have your FHS-approved valuation, you submit this to the FHS. The FHS will then provide you with a “Redemption Quote”. This quote tells you exactly what needs to be paid back and the different options.

What does percentage ownership mean?

This means that eligible homebuyers will receive funds from the FHS in return for the FHS taking an equity share in the ownership of their property. 

For example, Property purchase price = €450,000. Equity share provided by FHS = €45,000 (10% of the property purchase price). Therefore, FHS will own a 10% equity share in your property, even if the value of the property increases or decreases over time. 

When you fully redeem (buy back) the equity share, you will own your property outright (100%). If you would like to see more examples of how this works, we have included other examples in our Homebuyers Guide.

Situations when I have to pay off the equity share

Selling or renting your home.

If you decide to sell or rent out your home, then you are legally obligated to pay off the FHS equity share along with any outstanding service charge.

Your home must remain your primary residence. If this changes at any point, then you’re required to pay back the FHS.

However, you can rent out a room in your home as long as it still remains your primary residence.

Change of mortgage provider

If you switch your mortgage provider to another FHS-approved lender, then you are not required to pay off the FHS equity stake, but if you move your mortgage to a provider outside of the scheme, then you will need to repay it in full.

Death

Unfortunately, in the event of your passing away, the FHS will need to be repaid in full.

How do I apply for the First Home Scheme?

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

What to expect while applying online:

1. Check if you qualify: Use the FHS eligibility calculator to check if you qualify.
2. Get mortgage approved: You will need to get mortgage approval from a lender on the FHS scheme.
3. Apply online: You will need to provide personal details, such as the property you want to buy and the solicitor you plan to use. You also need to provide the following:

• Mortgage approval proof
• Photo ID for all applicants
• Proof of address for all applicants (this must be dated within the last 180 days)

4. Application assessment: your application and supporting documentation will be reviewed by the FHS.
5. Get your eligibility certificate: if you are eligible for the scheme, you will get a certificate proving your FHS eligibility. This document gives you an estimated value of how much equity you could potentially receive from the First Home Scheme. Give the certificate to your mortgage lender to include in your mortgage application.
6. Get mortgage approval: You will need a mortgage application approved by one of the FHS mortgage lenders.
7. Upload letter of offer to customer portal: The FHS has an interactive portal with a document upload feature; you will need to upload your approval letter to the portal.
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: Finally, your solicitor will send the signed customer contract and other required forms to the FHS. Once approved, the FHS will transfer the funds to your solicitor’s account. Then your solicitor will complete the purchase of your home.

FAQS

I previously bought a home outside of Ireland. Am I eligible?

I previously bought a home outside of Ireland. Am I eligible?

No, the scheme only applies to first-time buyers. If you previously owned a home abroad, you would not be eligible for the FHS.

When do I have to pay back the equity stake?

It’s totally down to you. You can pay it back in one go or instalments. If you decide to sell the house, rent it out or pass away, you would need to pay back the FHS in full.

What will my mortgage repayments be?

Your repayments will be based on the amount you borrow from a lender. So in the above example, repayments will be based on a mortgage of €200,000. However, a charge will eventually apply to the money the Government has provided unless you pay it back.

Will I be charged interest or a fee on the money the Government gives me?

No, the Government does not charge any interest; however, after five years, you will be charged a service fee. For more information on the charges, you can check our price table in this article’s “How much funding can I get and are there any costs?” section.

Is there an income limit?

No, there is no income limit on the First Home Scheme.

Contact the First Home Scheme

Use the details below to contact the FHS scheme.

First Home Scheme

Block C, Maynooth Business Campus, Maynooth, Co Kildare W23 F854

Tel: 0818 275 662

Homepage: https://www.firsthomescheme.ie/

Email: info@firsthomescheme.ie

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