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How To Apply For The First Home Scheme In Ireland
If you’re a first-time buyer in Ireland wondering how to apply for the First Home Scheme (FHS), you’re not alone.
Many prospective homeowners may have heard of this scheme through word of mouth, but are uncertain about their eligibility or how to begin the application process.
In this article, we demystify the process of applying for this initiative so that you can use it to help you bridge the gap between your deposit, your mortgage, and the price of your dream home.
Read on to discover how you can leverage the First Home Scheme to get one step closer to the property ladder!
What is the First Home Scheme?
In a nutshell, the First Home Scheme helps first-time buyers purchase or build a new home by covering up to 30% of the property’s value in exchange for an equal equity share.
For example, if you receive 20% support, the state and participating lenders will hold a 20% stake in your home.
With the FHS, homeowners can buy back the state’s equity share at any time, either in full or through partial repayments of at least 5% of the original share, with up to two repayments per year allowed.
How to apply for the First Home Scheme – Confirming your eligibility
Before gathering the relevant documentation and trawling through application forms, it’s vital to first confirm your eligibility for the scheme. The most important criteria are as follows:
- You must be over 18 and either a first-time buyer or an eligible homebuyer. The latter refers to people who are divorced, separated, or have undergone a personal insolvency or bankruptcy and no longer retain an interest in the family home.
- You must have mortgage approval in principle (AIP) from a participating lender. Participating lenders currently include Bank of Ireland, Permanent TSB and Allied Irish Bank, which includes AIB, Haven Mortgages and EBS.
- You must be borrowing the maximum mortgage amount allowed, which is up to four times your income.
- You must have a minimum deposit of 10% of the purchase price. However, it’s important to note that for self-builds, site equity can contribute to this deposit.
Once each of these boxes is ticked, you must ensure the property you have your sights set on will also fit the bill.
What types of property are eligible for the scheme?
To meet the requirements for the First Home Scheme, the property in question must be:
- A new build in a private development
- A self-build on your own site
- A tenant home purchase (after receiving a Notice of Termination)
- Used as your principal private residence
- Within the local authority property price ceiling.
To simplify this step, potential applicants can avail of an eligibility calculator on the First Home Scheme website, which generates a Preliminary Certificate, a helpful estimate of how much equity support you may qualify for.
How to apply for the First Home Scheme as a first-time buyer
If both your personal and property-based eligibility requirements line up, you can begin to look into the FHS application process.
Step 1: Register and apply via the First Home Scheme portal
The first step in the process is to register on the FHS customer portal and complete your application by uploading:
- Your AIP, which should be valid for at least 8 weeks
- A photo ID, such as your passport or driver’s licence
- Verification of address through a utility bill or bank statement, excluding mobile phone bills
- Your solicitor’s details.
Where necessary, you must also provide a Notice of Termination if purchasing your rented home, or your estimated build costs, if self-building.
Step 2: Receive your eligibility certificate
Once the above documentation has been reviewed, you’ll receive an Eligibility Certificate.
This is not a funding offer, but confirms your estimated equity support and lets you proceed with your mortgage lender.
Step 3: Finalise mortgage and upload offer
After you’ve received your Eligibility Certificate, you must provide it to your lender.
Once you receive full mortgage approval, you will need to upload your formal mortgage letter of offer to the FHS portal.
Step 4: Receive Customer Contract and complete purchase
As soon as the previous steps have been completed, the FHS will issue a Customer Contract. This should be sent to your solicitor for review before you sign on the dotted line.
From this point, your solicitor will handle final purchase details alongside your mortgage drawdown.
Upon completion, the FHS will release funds to your solicitor, who will finalise the property transfer.
The FHS will then issue a welcome letter and annual statements detailing equity and service charges.
Equity share and service charges
While there are no costs applicable to you for the first five years after availing of this scheme, it’s important to be aware of the service charges that kick in from year six.
These are:
- Years six to 15 – 1.75%
- Years 16-29 – 2.15%
- Years 30+ – 2.85%
You can redeem the state’s share, in part or in full, at any time. However, it’s crucial to consider from the outset that amounts will be adjusted to reflect the current property value, meaning a 20% share today is likely to cost more based on increases in market value.
For this reason, and after a certain period of time, the FHS will request that you carry out a new valuation of your home before proceeding with a redemption.
How to apply for the First Home Scheme – Start with expert help!
Applying for the First Home Scheme involves a number of detailed steps. From considering eligibility criteria and gathering documentation to consulting with prospective lenders on a suitable mortgage, there is a lot to wrap your head around.
To ensure you get the best possible rate on your mortgage and experience a seamless application journey when pursuing the FHS, it’s vital to consult an expert mortgage advisor who can assist with every step.
This is where Symmetry Financial comes to help!
If you’re considering applying for the FHS, our team will help you with every part of the process. We provide:
- Expert guidance when comparing qualifying lenders
- Help with the eligibility calculator and overall application process
- Smooth coordination with your lender and solicitor to ensure timely completion.
We are acutely aware that purchasing your first home is a life-changing moment. Let us help to make this life event as stress-free as possible, ensuring you are well-informed at every turn.
Contact us today to embark on your journey to homeownership with confidence.
If you’d like a free, no-obligation consultation for your mortgage, pension or financial needs, get in touch here, call us on 01 6831673 or email us directly on info@symmetryfinancial.ie.
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