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First mortgage-to-rent scheme for homeowners piloted

Mortgage holders will give up their properties and become tenants under the programme designed to help people in debt.

Image: Leon Farrell/Photocall Ireland

THE FIRST MORTGAGE-to-rent scheme has been announced as part of the Government’s efforts to help homeowners trapped by unsustainable mortgages.

Under the pilot scheme, mortgage payers will avoid losing their home by giving up ownership and becoming tenants.

It is being run by Clúid Housing Association, which has offices in Dublin, Cork and Galway. Its CEO Brian O’Gorman said the programme would initially involve “a small number of households.”

“The aim is to assist vulnerable home-owners who have unsustainable mortgages and are in danger of losing their home,” he said.

Clúid is currently negotiating final details with the Government, the Housing Agency and AIB. However, broadly speaking the scheme will involve mortgage payers giving up their house or apartment to the bank which holds the mortgage.

The home will then be sold on to Clúid at its current market value, rather than the value of the original mortgage. The household will become tenants of the association, and pay rent based on their income rather than repayments on a debt.

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Only homeowners whose mortgages have been officially deemed unsustainable in a Mortgage Arrears Resolution Process with the lender will be eligible for the pilot. The home must be worth less than €220,000 and they must qualify for social housing support.

It’s expected the Government – which put mortgage-to-rent schemes forward as part of the Keane report last October – will roll the programme out nationwide if the pilot is a success.

More: Report rules out blanket debt forgiveness on mortgages>

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