What it is: An equity funding product assisting first-time builders and fresh starters to build a new home in the Republic of Ireland.
Who it’s for: Individuals or couples who have a funding gap between their deposit, mortgage and the build cost of the home they wish to build on a site they own or are purchasing.
Product Features:
- No fixed repayment date
- Allows buyers the flexibility to redeem or buy back the equity share over time
- No service charge for the first five years
- Service charge, when applicable, can be deferred at no extra cost
- For redemptions, the site value is excluded from the property’s final valuation
Special conditions to be met for a self-build:
Before you apply
- The projected valuation on completion must be greater than or equal to the combined build cost and site value
- You must have or be in the process of applying for planning permission
- Construction must not have started before you apply
Before you sign your FHS contract
- Planning permission must be in place before signing the contract
- Construction must not have started before you sign your FHS contract
- The projected valuation on completion must be greater than or equal to the combined certified build cost and site value
Your FHS contract should be signed and returned at the same time as, or before the expiry date of, your mortgage letter of offer. If you draw down the first stage payment of your mortgage before signing your FHS contract, you may no longer be eligible for the First Home Scheme.
Before you draw down your FHS funding
- Your solicitor must confirm that your Participating Lender has released the first stage payment
- You must provide a Certified Property Report confirming that at least 50% of the works requiring FHS funding are complete
Other terms and conditions apply. For further information please refer to the self-build FAQs.
A cost overrun can occur during a self-build where there is an increase in the original projected build cost.
The FHS Equity Facility cannot be extended to cover any self-build cost overruns. You will need to secure funding for an overrun from your Participating Lender in the form of a mortgage top-up or from another source.
When the build of your home is complete, you must notify the FHS by completing a Self-build Cost Overrun Notification form which can be accessed through the FHS customer portal. You will also need to provide supporting documentation for the cost overrun, signed off by your Registered Quantity Surveyor, Engineer or Architect.
Once you provide the FHS with evidence that you have received the mortgage top-up from your Participating Lender and that your build is now complete, we will review and adjust your FHS Equity Share percentage and site value percentage accordingly.
A cost underrun can occur during a self-build where the final build cost is less than the original projected build cost and as a result, you do not draw down your full mortgage amount.
To notify the FHS in this instance, please complete a Self-build Cost Underrun Notification form which can be accessed through the FHS customer portal and provide us with supporting documentation.
Once reviewed, we will adjust your FHS Equity Share percentage and site value percentage accordingly.
Useful Resources
WARNING: We strongly recommend that you seek advice from an independent financial adviser and legal adviser if applying for a First Home Scheme product
WARNING: Property prices can go up and down. As the equity facility is linked to the value of your home, any change in property prices will affect any partial or final redemption amounts. If property prices increase/decrease over time, the percentage equity you have to redeem will remain the same but the € amount will increase/decrease. See example in the case of a price increase below:
Example: Self-build (own site)
You own a site valued at €100,000 and build a house on that site at a cost of €300,000. You avail of €30,000 from the First Home Scheme (FHS) which means the FHS has a 10% FHS Equity Share in your house built on the site.
Sometime in the future you decide to buy out the FHS Equity Share. The property, including both house and original site is now valued at €500,000.
At the time of build, the site value represented 25% of the total value of the home (i.e.€100,000) and this 25% will now be discounted from the current value before calculating the FHS equity amount to be redeemed (€500,000 less current site value of €125,000, equals €375,000). As the FHS Equity Share is unchanged at 10%, you will now need €37,500 (10% of €375,000) plus any accrued service charges payable, to redeem the FHS Equity Share in the home.
WARNING: The First Home Scheme is not regulated by the Central Bank of Ireland and the equity product is not governed by the Central Bank and its statutory codes of conduct and/or other regulations to include the Consumer Protection Code. However, this does not affect your rights under consumer law.