Local Authority Purchase and Renovation Loan

The Local Authority Purchase and Renovation Loan (LAPR) is a government-backed mortgage and loan that helps you to buy and renovate a derelict or uninhabitable home.

The loan is for first-time buyers, and ‘fresh start applicants’, who have been unable to get funding from commercial lenders, such as banks and credit unions. It is an extension of the Local Authority Home Loan.

You must qualify for the Vacant Property Refurbishment Grant to get this loan.

The loan has 2 parts:

• A fixed rate mortgage loan
• A variable rate bridging loan

The bridging loan is for the amount you’ve been approved for the Vacant Property Refurbishment Grant. You pay the bridging loan back as soon as you get the grant. The bridging loan is interest-only, which means you repay the balance and the interest but are not charged for the loan.

The Local Authority Purchase and Renovation Loan website has more information about the loan including an FAQ and a loan calculator.

The amount you can borrow depends on:

• How much you can afford to borrow. You need to show that you can afford your monthly mortgage repayments, which must be less than 35% of your net household income.
• The loan to value for the home you are buying. Loan to value is the ratio of the size of the loan to the value of the home you are buying.
• The Vacant Property Refurbishment Grant amount you have been approved for
• The level of renovation work you need for your home and the project viability. Project viability covers how likely the project is to be completed successfully and on time and budget.
• The estimated value of your home

The value of your home for this loan is taken as the estimated value of the property after the renovations are done. This value cannot exceed the maximum market property values for the Local Authority Home Loan in your area.

The maximum value is different depending on where your home is located:

• €360,000 in Dublin, Kildare, Wicklow
• €330,000 in Cork, Galway, Louth, Meath
• €300,000 in Clare, Kilkenny, Limerick, Waterford, Westmeath, Wexford
• €275,000 in Carlow, Cavan, Donegal, Kerry, Laois, Leitrim, Longford, Mayo, Monaghan, Offaly, Roscommon, Sligo, Tipperary

There are also 3 project types for the loan. You can apply for different levels of support depending on which project type applies to your property, see table below.

There are different maximum amounts you can borrow depending on the project type you are applying for. See these limits on the Local Authority Purchase and Renovation Loan website.

You can use the calculator on the Purchase and Renovation Loan website to get an estimate of how much you can borrow and what your repayments will be.

The Local Authority Purchase and Renovation Loan is made up of 2 parts, a mortgage and a bridging loan. The mortgage and the bridging loan have different terms and interest rates.

1. Interest rates for the mortgage part of the loan are fixed at:

• 4.00% for loans up to 25 years (APR 4.07%)
• 4.05% for loans over 25 years and up to 30 years (APR 4.13%)

Note: The interest rates for the Local Authority Purchase and Renovation Loan can change from time to time. You will get the interest rate that is available when you drawdown your loan and this rate is set for the term of your loan.

A fixed interest rate means that your monthly repayments remain the same for the term of the loan. You can pay off all or part of your mortgage, but you may have to pay a breakage fee.

You must sign up to the local authority collective Mortgage Protection Insurance (MPI) scheme. You pay MPI monthly in addition to your loan repayments.

1. Interest rates for the bridging loan are:

• 3.5% interest only variable rate for 2 years

The bridging loan is an interest only loan. You can get your bridging loan for the amount you’ve been approved for with the Vacant Property Refurbishment Grant. You must repay the bridging loan when you get the Vacant Property Refurbishment Grant at the end of the project.

The Local Authority Purchase and Renovation Loan is available to first-time buyers and ‘fresh start’ applicants. Fresh start applicants include:

• People who are divorced, separated, or whose relationship has ended and who have no financial interest in the family home
• People who have gone through personal insolvency or bankruptcy

To qualify for a Local Authority Purchase and Renovation Loan you must meet these requirements:

Your information and about the home

You must:

• Be a first-time buyer or a 'fresh start' applicant, see above.
• Be aged between 18 and 70.
• Have a legal right to live in Ireland.
• Buy and renovate a home that is in the State.
• Occupy the property as your normal place of residence. You cannot use the loan for rental properties.
• Be able to show that your project is viable. This means showing that you can complete the renovations to the required standard at a reasonable cost.

Your employment and income

You must:

• Have been in continuous employment or self-employment for a minimum of 2 years, if you are the primary applicant. Secondary applicants must have been in continuous employment for a minimum of 1 year. Income from an alternative source may be acceptable.
• Have a gross annual income of less than €70,000 for single applicants and €85,000 for joint applicants.
• Be able to provide the minimum deposit for the loan.
• Show that you can afford your repayments. These repayments must be less than 35% of your net household income.

Qualifying for the grant and loan

You must:

• Qualify for the Vacant Property Refurbishment Grant.
• Be unable to get sufficient financing for your project from commercial lenders, such as banks and credit unions. You will need to provide evidence of insufficient offers of finance from two regulated financial providers, for example, a bank or building society. Alternatively, you can provide letters of refusal for project specific reasons.
• Pass the creditworthiness assessment for the Local Authority Home Loan. For this assessment you need to meet the requirements for income sustainability, employment and creditworthiness, as well as some other personal qualification requirements.

To apply for the Local Authority Purchase and Renovation Loan, complete the application form.

You submit your application and supporting documents to the housing section of the local authority in the area where you want to buy and renovate your home. You can submit your application by post or in person. Contact your local authority to check how they would like you to submit your application.

You will get a decision in writing about your application.

Supporting documents

You need to submit supporting documents with your application, some of which depend on your situation. The application form provides a checklist for applicants so that you can make sure you have all the documents you need before you submit your application.

You will need:

• Evidence of insufficient mortgage offers of finance from two regulated financial providers. This evidence can be either a:
  • Letter of insufficient mortgage offer from a bank or building society showing the requested loan amount
  • Letter stating that the application is outside the lending criteria of the bank or building society
  • Copy of a lender's mortgage calculator showing that you are unable to borrow the amount needed
  • Letter of refusal for a loan stating that your application was outside the lending criteria of the commercial lender for project specific reasons
• Photo ID (for example, current passport or drivers licence)
• Proof of address (current utility bill or bank statement dated within 3 months of the application)
• Proof of your Personal Public Service (PPS) number or Tax Registration Number
• 12 months of your most recent bank account statements. This includes current accounts, savings accounts, loan accounts and credit union accounts. One of these accounts should show your salary lodgements.
• 6 months of your most recent credit card statements.
• An original salary certificate. This is completed by your employer and has information about your job and wages.
• End of year Employment Detail Summary (P60)
• Tax balancing statement (P21), if applicable
• Most recent pay slips for 3 months

You also need to send some documents about the project, including:

• Stage 1 viability assessment documents, which include a building survey, scope of works and cost plan
• A valuation report giving the market value of your property. This should include the current value, if you are buying your property with the loan and an estimate of its value when the renovation works are completed.
• Proof of Vacant Property Refurbishment Grant approval and the amount approved, if this is available
• Proof of current approval in principle for a Local Authority Home Loan, if available
• Proof that Professional Indemnity Insurance is in place

Additional supporting documents

If you are renting, self-employed, getting a social welfare payment or applying as a 'fresh start' applicant, you may also need other supporting documents when you are applying.

If you are a tenant:

• Renting private rented accommodation, you need evidence of 12 months of rent payments before applying. If you have received a Notice to Termination from your landlord, you should also send a copy of this.
• Renting directly from the local authority, or under the Housing Assistance Payment (HAP) scheme or Rental Accommodation Scheme (RAS), you need a letter from the Rent Assessment Section of your local authority confirming that your rent assessment is up to date and the account has been clear for 6 months before applying

If you are self-employed you also need:

• An accountant’s report or your audited accounts for the previous 2 years
• A letter from an accountant confirming that your personal and business taxes are up-to-date and in order
• A tax return summary (Form 11) for the previous 2 tax years
• A current tax balancing statement
• A current preliminary revenue tax payment receipt
• 12 months of your most recent personal current account bank statements, business current account statements, savings account statements. These should show your net income and savings.

If you are getting a jobseeker payment or other social welfare payment you need:

• Appendix 2 of the application form completed by the Department of Social Protection
• Statement of the total benefits you received in the previous tax year

If you are applying as a 'fresh start' applicant you may need additional documents to show that you qualify for the loan even though you may not be a first-time buyer.

The documents you need depends on if you are applying as a fresh start applicant because your relationship has ended, or because you have exited insolvency or bankruptcy proceedings.

You apply to your local authority for the Local Authority Purchase and Renovation Loan.