Sinn Féin remains “absolutely confident” its affordable homes plan will meet the lending requirements of the banks, the party’s housing spokesman Eoin Ó Broin has insisted.
The party has pledged to deliver affordable housing for eligible purchasers at prices between €250,000 and €300,000.
Under the Sinn Féin plan the State would retain ownership of the land the homes are built on and there would be conditions on the sale and rent of the property.
Both Fianna Fáil and Fine Gael have questioned whether lenders will provide mortgages to housebuyers who would not own the land.
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The Business Post reported at the weekend that banking sources have said Sinn Féin has overstated the banks’ willingness to lend mortgages under the proposed scheme.
Mr Ó Broin responded on Monday saying that banks “don’t sign memoranda of understanding with Opposition parties and nor should they”.
He said he and Sinn Féin finance spokesman Pearse Doherty met representative organisation the Banking & Payments Federation Ireland (BPFI) prior to the publication of the party’s affordable housing plan.
“They [BPFI] set out in very reasonable terms what their requirements would be if their members were to lend mortgages into our scheme.
“Those requirements really centre around what would happen in the case of default.
“And I’m absolutely confident, and make no apology for being confident, that we can meet those requirements.”
Mr Ó Broin said Sinn Féin’s plan “would provide banks with the exact same security as the current government schemes do.”
He said this means that “if somebody purchased one of our affordable purchase homes and then defaults on their mortgage, the banks will have first charge on the asset, including the land”.
He added: “Also, because we want to ensure where people fall into mortgage distress through no fault of their own the local authorities would have an option, as they currently do under mortgage-to-rent, to step in, acquire out the mortgage and turn the affordable homeowner into a social or a cost-rental tenant.
“Those types of securities already exist, and therefore, because we will be doing exactly the same thing as the current government, I don’t have any concerns.”
Mr Ó Broin also said: “I would also remind people that banks lend into leasehold mortgages all the time.
“Anybody living in a duplex, the people who live on the upper floors don’t own the land.
“People who live in apartments, they don’t own the land.
“For decades in this country, banks lend mortgages for leasehold purchases.”
Mr Ó Broin added: “Given that people will be able to buy these homes at prices of €250,000, €260,000, €270,000 ... those affordable purchasers will be taking on far less risk because they borrowing less money.”
He said this was in “stark contrast” to the outgoing Government’s affordable housing offering where he put the “all-in” cost of some of these homes in Dublin at between €400,000 and €560,000.
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