First Home Scheme

The First Home Scheme (FHS) is an affordable housing scheme, which supports you to buy a new home or to build your first home.

The FHS is a shared equity scheme. This means that the government and participating banks pay up to 30% of the cost of your new home in return for a stake in the home. If you want, you can buy back the stake at any time, but you don’t have to.

Who can access the First Home Scheme?

The scheme is available nationwide for:

• First-time buyers and certain other people who want to buy a new home
• People who want to build their first home on their own site, and certain other people who want to build a new home. (The scheme was extended to people building their own new homes in September 2023.)
• People who want to buy the home they are renting because their landlord is selling the property. This version of the FHS is known as the Tenant Home Purchase Scheme.

To qualify for the First Home Scheme, you must meet certain criteria.

1. You must be a first-time buyer or ‘fresh start’ applicant buying or building a new home

You are a first-time buyer if:

• You have not previously bought or built a property to live in.
• You do not own or have an interest in any property in Ireland or abroad.

You will not qualify as a first-time buyer if you have owned a home abroad or have previously inherited a home.

You are a ‘fresh start’ applicant if you previously owned a home, but you no longer have a financial interest in it because:

• You are now divorced, separated, or your relationship has ended
• You have gone through personal insolvency or bankruptcy

If you are buying or building the property with someone else, they must also be a first-time buyer or fresh start applicant.

2. You must be over 18

To qualify you must also be over 18 and have the right to live in Ireland.

3. You must live in the property and it must be new

The scheme only applies if you are buying or building the property as your home. You must live in it as your only place of residence.

If you are buying a property, it must be a newly-built home in a private development.

If you are building your own home:

• The property must be built on a site that you own or are buying
• The property must be a detached or semi-detached house
• The build must be managed by you or a contractor

The scheme does not cover second-hand homes, unless your landlord is selling the property you are renting and you want to buy it.

4. Your home must be within the price limits for your area

Your new home must cost less than the price limit for your local authority area. These limits are different depending on where you buy or build your home. The limits are also different if you are buying a house or apartment.

The limits are linked to the average price for first-time buyers in each area. They are reviewed regularly and changed if needed. You can find the current limits in the table below, or on the FHS website.

Note: Duplexes fall under the house price limits.

5. Your mortgage must be with a participating lender and you must have a deposit

Your mortgage must be with a lender that is participating in the scheme. Participating lenders currently include Bank of Ireland, Permanent TSB and Allied Irish Bank which includes AIB, Haven Mortgages and EBS.

You must borrow the maximum amount available to you from one of these lenders. Under Central Bank rules, the limit for mortgage borrowing for first-time buyers is 4 times your gross annual income. If you are a non-first-time home buyer, the limit is 3.5 times your gross annual income.

If you are getting a Macro Prudential Exception (MPE) with a participating lender you will not qualify for the FHS. An MPE is when your lender lets you borrow above the Central Bank limits. Lenders have flexibility to do this for a certain percentage of the mortgages they provide.

You must have a deposit of at least 10%. If you are buying, this is 10% of the property’s purchase price. If you are availing of the Help to Buy Scheme, this can contribute towards the deposit you need.

If you are building your home, this is 10% of the build cost. You can use the equity in your site to contribute to the deposit if you are building your home.

There is an eligibility calculator on the First Home Scheme website to help you see if you qualify.

The First Home Scheme is a shared equity scheme. This means you get funds from the scheme in return for a percentage ownership of the property. You can buy back this percentage if and when you want. If you do then you will fully own the home.

You can get up to 30% of the market value of your new property with the First Home Scheme. This is reduced to 20% if you are also getting the Help to Buy Scheme. The minimum amount you can get is 2.5% of the property purchase price, or €10,000, whichever is higher.

Are there any charges?

There is no charge for the First Home Scheme for the first 5 years that you own your home. But, if you have not bought out the FHS equity share in your home by the sixth year, a service charge will apply. This service charge is for the maintenance of the First Home Scheme. It is a percentage of the amount the FHS paid when you bought the home. The service charge amounts increase the longer you stay in the scheme. They are:

• 1.75% for years 6 to 15
• 2.15% for years 16 to 29
• 2.85% for years 30 and over

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

You can pay the service charge annually or in monthly instalments. If you can’t afford the service charge you can pay a reduced amount, pause the payments for a set amount of time or defer them altogether.

There is no additional cost for deferring the service charge, but it will eventually need to be paid. For example, it will need to be paid if you want to pay back the equity share, to sell the home or if you die.

You can buy back the equity share in your home at any time. But you don’t have to.

You can buy back the full equity share in one payment, or pay it back partially as you can afford to. However, the minimum amount you can pay back is 5% of the original equity amount and you can only make 2 partial payments a year.

The equity share in your home is a percentage of the market value of your home. So, if property prices increase, the amount you have to pay back will increase.

For example, if you bought your property in 2022 for €300,000 and the FHS provided equity of 10% or €30,000 and you want to buy back the equity share in 2025 when the property is valued at €350,000, you will have to pay 10% of this, which is €35,000.

If you want to buy back some or all of the FHS equity share in your home, you must get your home valued. The valuation must be completed by an FHS Approved Valuer and you will pay for this. You can find a list of FHS Approved Valuers on the FHS customer portal. The valuation is valid for 12 months.

You send this valuation report to the FHS and ask them for a ‘redemption quote’. The redemption quote will tell you how much it will cost you to pay off some or all of the FHS equity in your home.

This redemption quote is based on the valuation you get. If you built your own home, the value of your site is discounted from the property value when the redemption payment is calculated.

You must provide a number of supporting documents when you pay this off. The First Home Scheme website has information on what you need.

What if I don’t agree with the valuation?

If you don’t agree with the valuation provided, you should contact the FHS to get a second valuation. If you don’t agree with the second valuation, the FHS will get an independent assessment of your home’s value. This valuation is binding.

What if I add value to my home?

If you make a material change to your home that increases its market value, this increase will not be taken into account when valuing your property. For example, if you extend your home, the increase in the value of the home this brings will be excluded from the valuation. The First Home Scheme website has more information about what is considered a material change.

If I sell my home or rent it out

If you sell or rent out your home, you must pay off the FHS equity share in your home and any outstanding service charges. You must pay off the equity share in any situation where the home is no longer your primary residence. However, you can stay in the scheme, if you want to rent out a room in your home while you live there.

If I switch mortgage provider

You can switch your mortgage to another lender in the scheme without having to pay off the equity share. However, if your new mortgage provider is not part of the scheme, you will have to pay off the equity share and any charges.

If I die

If you die, or for joint applicants, when the last applicant dies, the equity share must be paid off.

You apply online for the First Home Scheme. If you cannot apply online or need help filling out the form, contact the FHS and they will help you.

There are a number of steps to the FHS process:

1. Check you qualify: use the FHS eligibility calculator to check if you qualify.
2. Get mortgage approval in principle: you need to get mortgage approval from a participating lender to apply.
3. Apply online: you need to give some personal details as well as information about the property you want to buy and the details of your solicitor. You also need to provide:
   1. Mortgage approval in principle
   2. Photo ID for everyone applying
   3. Proof of address (this must be dated within the last 6 months)
   4. An estimate of how much it will cost to build your home, if you are building the property.
4. Have your application assessed: your application and documents will be reviewed by the FHS.
5. Get your eligibility certificate: if you qualify for the scheme, you will get an FHS eligibility certificate. This gives you an estimate of how much equity you can get from the FHS. Give the certificate to your mortgage lender to include in your mortgage application.
6. Get mortgage approval: get mortgage approval from your lender. They will give you a mortgage letter of offer.
7. Upload letter of offer to customer portal: upload your mortgage letter of offer to the FHS website along with any other documents needed. If you are building your own home, you will also need to provide a certified build cost from a qualified architect, engineer or quantity surveyor.
8. Get your FHS customer contract: if your FHS application is approved, you and your solicitor will get a hard-copy of your customer contract for the equity share. This is a legal contract between you and the FHS, which must be signed by you and witnessed by your solicitor.
9. Get your FHS funds: your solicitor will send the signed customer contract and other forms to the FHS. If you are buying your home, the FHS will then transfer the funds to your solicitor’s account, so they can complete the purchase of your home in line with the mortgage process. If you are building your home, you have 12 months from when you sign the contract to draw down the funds to your solicitor’s account and 24 months from draw down to complete the build of your home.

The Tenant Home Purchase Scheme is an extension of the First Home Scheme. It expands the FHS so you qualify if your landlord is selling the property you are renting and you want to buy it.

The Tenant Home Purchase Scheme is slightly different to the FHS because you can buy a second-hand home (your rental home) and the FHS is only available for new homes. This also means you will not qualify for the Help to Buy Scheme, which only applies to new homes.

You must have a valid notice of termination to qualify for the Tenant Home Purchase Scheme. You must send a copy of this and your mortgage approval in principle when you apply.

Apart from these minor differences, all the other requirements and qualification criteria for the FHS apply to the Tenant Home Purchase Scheme.

You apply for the Tenant Home Purchase Scheme online on the First Home Scheme website.

You can find more information about the Tenant Home Purchase Scheme on firsthomescheme.ie.

The First Home Scheme website has detailed information about the scheme, including an FAQ and eligibility calculator. They also have a number of guides about the scheme, including:

• Your Guide to the First Home Scheme (pdf)
• Your Guide to the Self Build Product (pdf)
• Your Guide to the Tenant Purchase Scheme (pdf)

If you have questions about the scheme, you contact First Homes Scheme for more information.

Local authority affordable housing scheme

There is a Local Authority Affordable Purchase Scheme, which is similar to the First Home Scheme. With this scheme the local authority buys a stake in your home instead of the banks. However, this scheme only applies in certain areas.