What is a Local Authority Home Loan?

A Local Authority Home Loan is a Government backed mortgage for first time buyers and Fresh Start applicants through local authorities. The loan is a normal capital and interest-bearing mortgage which is repaid by direct debit monthly. The scheme is for the purchase of new or second-hand residential properties and for self-builds.

The Fresh Start principle means that applicants who have; 

  • Gone through personal insolvency or bankruptcy arrangement or proceedings  
  • or are divorced, legally separated/separated or the relationship has ended and have no financial interest in the family home are eligible to apply under this scheme.  

If you are applying as a Fresh Start applicant because your relationship has ended, you will need documents as proof of this. For example; 

  • If you are separated or divorced you will need proof of the divorce or separation, as well as evidence that you have no financial interest in the family home and details of any maintenance arrangement.  
  • If your relationship has ended but there is no divorce or separation agreement, you will need a sworn statement. This should state that there is no formal separation agreement, you have no financial interest in the family home, there are no court proceedings pending under family law legislation, and details about any maintenance arrangements. 

Note: The Local Authority Home Loan cannot be used by fresh start applicants to buy their former partner’s share of their family home. 

If you are applying as a secondary applicant, you must have been in continuous employment for a minimum of 1 year. However, secondary applicants on certain long-term social welfare payments including the widow’s, widower’s or surviving civil partner’s pension may be considered. 

More information on the Local Authority Home Loan, including the full eligibility criteria is available at the link below. 

Last modified: 14 November 2023