A NEW scheme of low interest mortgages will see 100 families move from local authority housing in congested urban areas to homes in rural Ireland over the next three years.
The scheme, designed and run by the Department of the Environment and Rural Resettlement Ireland, will allow unemployed people and those on low incomes to buy homes in rural areas costing up to £33,000.
Speaking at the launch yesterday, Mr Jim Connolly chairman of Rural Resettlement Ireland, said. "People are entitled to rear their families in dignity whether or not they are unemployed."
Under the scheme, a loan of £6,000, which is non returnable if the move is permanent, will be provided by RRI. The Bank of Ireland will provide a 20 year mortgage of up to £12,000 at a fixed interest rate of 5 per cent for 10 years (rising to 71/2 per cent for another 10 years), and the local authority will provide a loan of up to £15,000.
People who leave a local authority house in good order will qualify for a £4,500 mortgage allowance from the Department of the Environment.
Mr Connolly said the money would have to be raised from voluntary contributions, and RRI had established a fund raising organisation in the US, called RRI (USA) Ltd. Along with the Ireland Fund and the Heinz Foundation, RRI had raised sufficient funds to start the limited pilot programme.
Mr Pat Molloy, group chief executive of the Bank of Ireland, said it was an experiment in social lending. "This is not a commercial activity as far as the bank is concerned, but we believe that the concept of rural resettlement is worth supporting and this is a very practical way to do so."
The Minister of State for Housing and Urban Renewal, Ms Liz McManus, said the scheme was an example of partnership between the public private and voluntary sectors in housing. Where new houses were not available, a small number of the mortgages would be available to build new houses on sites provided by RRI, she said.