Keeping your home with Mortgage to Rent

2nd June 2020

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More loan owners are opting to make Mortgage to Rent (MTR) an available solution to borrowers in long term mortgage arrears on their home. They are seeing the benefits it has for borrowers in mortgage arrears. It ensures borrowers get to remain in their homes and can pay rent at a rate that is affordable to them.

What does a borrower’s journey look like if they choose to pursue MTR? If a borrowers MTR application is successful, they can expect to encounter the following steps on their journey towards staying in their home with Abhaile.

mortgage to rent infographic

Stage 1: Borrower before encountering the Abhaile scheme:

Step 1: Borrower is in late-stage mortgage arrears and is unable to make the repayments on the mortgage loan, with the situation unlikely to change in the future. Late stage mortgage arrears is considered to be 720+ days by the Central Bank. If you are in mortgage arrears by more than a few years, help and support is still available through Abhaile.

Step 2: Borrower has completed the Mortgage Arrears Resolution Process (MARP) with their lender. The MARP is a system that outlines how lenders must deal with borrowers who fall into arrears with their mortgage. The lender may offer Mortgage to Rent (MTR) at this stage.

Stage 2: Borrower works with a MABS Adviser under Abhaile:

Step 1: Borrower calls the MABS Helpline on 0761 07 2000 or visits their local MABS office.

Step 2: The MABS Adviser works with the borrower to complete a Standard Financial Statement (SFS). Once complete, the Adviser presents all available options to the borrower, who decides to explore MTR.

Step 3: Borrower decides to pursue MTR having met the initial eligibility criteria.

Step 4: If MTR is an option, the lender will provide everything the borrower needs to apply for the scheme, including ‘mortgage unsustainable letter’– needed to apply for Social Housing Support (SHS).

Stage 3: Borrower begins the MTR application process under Abhaile:

Throughout the different stages of the MTR application, your MABS Adviser will be there to offer support every step of the way.

Step 1: Borrower applies for the SHS through their Local Authority office.

Step 2: If the SHS application is successful and approved by the local authority, the borrower returns it to their lender.

Step 3: The MTR application is submitted to the Housing Agency (separate to the Local Authority) to ensure the borrower is eligible for the scheme.

Step 4: The Housing Agency conduct a valuation and condition survey of the property at a time of the borrowers choosing to further determine their eligibility for the scheme.

Stage 4: Finalisation of the MTR application:

Step 1: The lender and an Approved Housing Body (AHB) or a designated private company agree on a sale price for the property. The lender sends the borrower ‘Final Letter of Offer for the MTR Scheme’.

Step 2: Borrower must receive financial and legal advice once they receive the ‘Final Letter of Offer for the MTR Scheme’. The borrower has 14 days to change their mind once an offer has been accepted. This is known as a cooling-off period.

Step 3: A tenancy agreement is signed with the AHB or Local Authority that outlines terms of the borrower's residency, including rent, which is calculated in proportion to the borrower’s income.

Step 4: Borrower must sign a Voluntary Surrender document which gives ownership of the property to the lender and allows for the sale to be complete.

Step 5: Lender sells the property to the buyer.

Step 6: Borrower becomes a tenant and continues to live in the home and remain in their community.

Please Note: This infographic is provided as an aid to highlight one example of a borrower’s journey through Abhaile. Every borrowers’ circumstances are unique, meaning the journey towards a solution will be dealt with on a case by case basis, by experienced regulated qualified professionals. This does not represent legal advice.

If you or someone you know is in mortgage arrears, please reach out to the free supports available to you through Abhaile. Get started by calling 0761 07 2000 and speaking with an adviser today.

Glossary of Terms

Approved Housing Body: They provide affordable rented housing for people who cannot afford to pay private sector rents or buy their own homes.

Housing Agency: The Housing Agency is a government agency focused on supporting local authorities, the Department of Housing, Planning and Local Government (DHPLG) and Approved Housing Bodies (AHBs).

Local Authority: Provide a range of services within their boundaries (County Councils, City Councils, City and County Councils and Regional Assemblies).

Mortgage Arrears Resolution Process (MARP): The MARP is a framework that sets out rules of how the lender must deal with borrowers when they enter into mortgage arrears or are in pre-arrears.

Social Housing Support (SHS): Social housing support is housing provided by a local authority or an approved housing body to people who are assessed as being unable to afford housing from their own resources.