THE TAOISEACH HAS said the government will have to consult with the Central Bank before continuing to provide loans under a scheme for first-time buyers.

It emerged yesterday that a directive had been issued to local authorities telling them to stop considering applications for the Rebuilding Ireland Home Loan Scheme because all of the €200 million fund had been allocated.

Under this scheme a first-time-buyer could apply for a home loan to purchase a new or second-hand property, or to build their own home. First-time-buyers could borrow up to 90% of the market value of the property at a reduced interest rate.

Leo Varadkar was questioned about the scheme by Fianna Fáil leader Micheál Martin today who said the government had always indicated that a second fund would be created “very quickly” after this had run out.

He asked why the Department of Housing did not make a public announcement about halting the scheme.

“People are still applying,” he said. 

Why can’t the minister and the government just be honest with the people?

Martin said this was an example of “low income people being let down again”.

In response, the Taoiseach said some 575 people had been helped by the scheme and a further 1,000 had been approved but have yet to draw down the funding.

He told Martin that the government will now consider increasing the €200 million cap, but he said the money “has to be found”.

Varadkar also said there will have to be consultation with the Central Bank before any expansion of the scheme. 

He pointed out that these are loans are being offered to “people who were turned down by banks and building societies” and that they are being given at a reduced interest rate.

The Taoiseach said the government will have to ask the Central bank whether it is “comfortable with us offering more of these loans”.