What is the First Home Scheme (FHS)?

The First Home Scheme is a shared equity scheme designed to support first-time buyers and eligible
homebuyers in bridging the financial gap between their deposit, mortgage, and the cost of a new
home. In partnership with the State and participating banks, the scheme contributes up to 30% of
the market value of your new home, securing a stake in your property.

How does the First Home Scheme work?

The First Home Scheme can fund up to 30% of the market value of your new property, but this amount is reduced to 20% if you are availing of the Help to Buy Scheme (HTB). To qualify for the scheme, you must be a first-time buyer or a “fresh start” applicant, over 18, and have the right to live in Ireland.

How do I qualify for the First Home Scheme?

Firstly, to qualify, you must be a First Time buyer/“fresh start” applicant, over 18 and have the right to live in Ireland.

You are a First Time buyer if you:

• have not previously bought or built a property to live in.

• do not own or have an interest in any property in the Republic of Ireland or abroad.

You are a” Fresh start” applicant if you:

• previously owned a home, but you no longer have a financial interest in it
• are now divorced, separated or your relationship has ended.
• have gone through personal insolvency or bankruptcy.

Also, you must have borrowed the maximum amount available to you from one of the participating lenders (up to 3.5 times your income, increasing to 4 times your income in Jan 2023) and have a minimum deposit of 10% of the property purchase price.

If you are buying the property with someone else, they too must be a First Time Buyer/ Fresh start applicant.

The Scheme does not cover second-hand homes or self builds, the property you buy must be a new build in a private development.

If you have ever owned a home abroad or previously inherited a house, you will not be eligible for the First Home Scheme.

You will not be eligible for the FHS if you are availing of a Macro Prudential Exception (MPE) with a participating lender. This is where your lender allows you borrow above the Central Bank limits. Lenders have the ability to do this for a certain percentage of mortgages they provide.

Your home must be within the price limits for your area:

Your new home must have a market value less than the price limit for your local authority area. These limits differ depending on where you buy and what type of property you are purchasing. They relate to the average price for first-time buyers in each area. Further, they will revise the limits regularly and update them if needed.

See the price limits for each area below:

Local authority Area:

• Cork City, Dublin City, Dún Laoghaire-Rathdown, Fingal, South Dublin = €450,000 for houses & €500,000 for apartments
• Galway City = €400,000 for houses & €450,000 for apartments
• Limerick City & County, Waterford City & County = €350,000 for houses & €450,000 for apartments.
• Wicklow = €450,000 for all properties.
• Kildare = €400,000 for all properties
• Cork County, Galway County, Kilkenny, Meath, Westmeath = €350,000 for all properties.
• Clare, Kerry, Laois, Louth, Mayo, Monaghan, Offaly, Roscommon &Wexford = €300,000 for all properties.                
• Carlow, Cavan, Donegal, Leitrim, Longford, Sligo & Tipperary = €250,000 for all properties.

Note: Duplexes fall under the house price limits.

The scheme only applies when buying a property that will be your principal place of residence.

For further information on this visit: https://www.firsthomescheme.ie/faqs/rules-and-eligibility/

Is there a charge associated with the First Home Scheme?

There is no charge for the equity share for the first five years.

At the beginning of your sixth year of ownership of your property, (if the equity share is still in place), a service charge will apply. This is a charge that has to be paid by you for the maintenance and servicing of the FHS.

The equity share that is applied from the start of year six onwards, is at the following rates per annum:

• 1.75% for year six – year 15
• 2.15% for year 16 – year 29
• 2.85% for year 30+

These rates are fixed for the life of the equity facility.

The government is loaning you money and takes an equity stake in your property. For example: if the government loans you 10% of the purchase price of the property, they own 10% of the property. You can buy out this percentage for cash at any stage. But if you choose not to buy out the government’s equity in your property, you will be liable to pay the associated interest charges each month or pay it back partially as you can afford. There is no additional cost for deferring the service charge. However, it will continue to accrue against your account and you will need to pay it at a later date.

Do I need a Legal agreement in place between me and the First Home Scheme?

Engaging a solicitor is essential to establish a legal agreement between you and the FHS, similar to
an agreement with a mortgage lender. Your solicitor will provide independent legal advice and assist
with necessary documentation.

What happens if I want to buy back the Equity Share?

If you wish to buy back some or all of your equity facility, you must provide a property valuation
conducted by an FHS Approved Valuer. After year six, if you wish to redeem the equity share in full,
any accrued unpaid service charges must be paid in full.

To buy back some of your equity share, it must be a minimum of 5% of the original equity amount.
This minimum will not vary over the life of the equity facility Only two partial redemptions are
permitted in any 12-month period.

What happens if I want to sell my home?

You are required to contact the FHS if you are considering selling your property. On the sale of your property the equity share and any outstanding service charges must be repaid in full.

As property prices can vary, going up and down, any change in property price will determine any partial or final redemption amounts to be paid. (If property prices increase/decrease over time, the percentage equity you have to redeem will remain the same. However, the € amount will increase/decrease.)

Any material alterations you make to your property that increase its current market value will be deducted from the market value of your property for valuation purposes. For example: any works that require a planning permission, the addition of an extension/conservatory.

In addition, any works carried out to increase the Energy Rating (BER) of your home are also classified as material changes.

What happens if I want to rent my property?

The FHS is designed for those buying a property as their principal place of residence, making renting
of your property, not permitted. Any equity- share and service charges must be cleared before
considering rental.

What Information do I need to provide when applying for the FHS?

• personal details i.e.: your full name, current address, date of birth and occupation.
• qualification details i.e.: Are you a first-time buyer? Are you availing of HTB?
• property details i.e.: what type of property you are looking to buy, the purchase price and location of the property (local authority area)
• your solicitor’s details – i.e.: name and address
• a copy of your Mortgage Approval in Principle (AIP) from a Participating Lender (this must be valid for at least eight weeks from date of submission)
• photo ID for all homebuyers, valid for at least six months i.e.: passport, driver’s licence
• current address verification (dated in the last six months) for all homebuyers i.e.: bank statement, recent utility bill – gas, electric, telephone (landline only, mobile phone bills will not be accepted
• It is recommended that in addition to life cover for your mortgage, you have sufficient cover for the equity share under the FHS.
• Along with buildings insurance on your property you will need to provide evidence that the FHS’ interest is noted on your Home Insurance policy. If that is not possible, then a letter from the insurance stating that it is not possible to note FHS’ interest on the Home Insurance policy.

How do I apply?

Check you qualify: To check you qualify, use the FHS eligibility calculator 

Get mortgage approval in principle: Once you have an Approval in Principal, you can register and apply for the FHS.

Apply online: You will need to provide some personal details along with information about the property you wish to buy and your solicitor:

• Mortgage approval in principle.
• Photo ID for all homebuyers applying i.e.: passport, drivers licence
• Proof of address for all homebuyers (this must be dated within the last 6 months)

Have your application assessed: Your application and documents will be assessed by the FHS.

Get your eligibility certificate: On qualifying for the scheme, you will be issued with an FHS eligibility certificate. This provides an estimate of how much equity you can receive from the FHS. Give the certificate to your mortgage lender and they will include it in your mortgage application.

Get mortgage approval: On getting mortgage approval, your lender will give you a mortgage letter of offer.

Upload letter of offer to customer portal: Upload your mortgage letter of offer along with any other documents required on the FHS website.

Your FHS customer contract: When your FHS application is approved, you and your solicitor will be sent a hard copy of the equity share. This is a legally binding contract between you and the FHS. The contract must be signed by you, witnessed by your solicitor.

Get your FHS funds: Your solicitor will return the signed customer contract along with any other forms to the FHS. The FHS will then transfer the funds to your solicitor’s account, so they can complete the purchase of your home.

Contact Details:

If you have any questions or need further assistance, our team of expert advisors at Ezfees Financial
Mortgage, Life & Pension Brokers are here to help. Contact us at 0818 910800 or send your queries
to info@ezfeesfinancial.ie for expert advice tailored to your needs.

Why not book a comprehensive Mortgage Consultation with us today via our “Book A Consultation”
option on our website:  https://ezfeesfinancial.ie/book-consultation/
“Ezfees financial, we’re here to help make your dream home a reality.”