Advice Needed on getting out of affordable housing scheme

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Nesta

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I am currently buying an apartment under the Affordable housing scheme, my mortgage is with Dublin City Council.I am in my apartment around 4 to 5 years , problem is the apartment i purchased is too small. At the time i was only entitled to a small apartment as i didnt have kids and was not in rented accomodation .Things have changed since .
A relative of my wife has offered to take over the mortgage as a long term investment with a view of renting it out ,with our names still on the mortgage for legal reasons(ie DCC) also so the clawback wouldnt come into to play. In return he would pay us a sum of money as a deposit for a new house .
Would this be legal or would it be too much of a head ache for both parties involved .
i have heard you are not allowed to rent out these properties but i know of a few people who are currently renting out units .
Thank you in advance or maybe there is an easier way that people are aware of of doing something simlair.
 
If you were tryng to come up with a scenario which caused you the most long term headache this would be it. Just sell it on the open market and move on.

Any other advice would be to recommend a course of action which will give you issues with the DCC and Revenue, and issues for wifes relative with DCC and Revenue.

Under no circumstances would I even consider this plan.
 
if i sell on open market i will not be able to buy a new property as i will not have a deposit as any extra income went into my apartment over the years. If i sold on open market would i receive any monies at all ie mortgage payments i made.
 
?

How would you not receive anything - what did you buy the place for, what could you reasonably expect to sell it for, what was the original clawback, what clawback is currently outstanding, what mortgage is currently outstanding?
 
originally paid 155,000 5 years ago with the apartment worth around 260,00, mortgage on that was for 25 years, clawback for 20 years but possible to make profit after 10 years.
If i sold now say for 220,000 due to downturn ,DCc would get the 220k but would i be entitled to my 5 years of mortgage repayment back around 35k or was that only interest i was paying and would not be entitled to anything.
Am i better off waiting to see what comes out of the bill from the oireachtas before making rash decisions,
apologies if i seem naive.....
 
Huge mistake could be made hear, I would definite wait until the recession calms down and them potentially make the sale. At the moment there is no sense in selling the AH as you would be at such a loss. You can rent out one room in the AH for little extra income however this house of the relative, are you sure that deal is lock tight and they wont change their minds? Then your stuck with no home at all to live in, you got the apartment at seriously discounted price, almost too good to be through, Id keep it at least for an investment. My house with DCC is valued 235, and i'm only getting it for 220, so its just 6% discount so I was kinda screwed over with that especially as the clawback and years clawback valid didnt' reduce, still 20 years. I know you will
trust your instincts and make the right decision, only you can decide really, good luck.
 
Nesta said:
originally paid 155,000 5 years ago with the apartment worth around 260,00, mortgage on that was for 25 years, clawback for 20 years but possible to make profit after 10 years.
If i sold now say for 220,000 due to downturn ,DCc would get the 220k but would i be entitled to my 5 years of mortgage repayment back around 35k or was that only interest i was paying and would not be entitled to anything.
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Hi Nesta

I'm a bit confused about your post so I hope I'm picking you up correctly. Your first post said you were in the process of buying an apartment, but it seems you bought 5 years ago?

If you bought 5 years ago for €155k with a market value of €260k you'd be fine now. Even if you sold for €220k you'd get your €155k back. DCC would get €65k - you are prevented from falling into negative equity as long as the property doesn't fall below what you actually paid for it. My advice is ring them if you are a bit confused about it.

As for your first post re a relative taking over the mortgage - it's not really clear from the post why you'd want them to do this? I don't believe it would be posisible, it would be seen as profiteering from the AH scheme. If you're not living there you have to sell.
 
Just to add - if you went with your first idea of getting a relative to take over the mortgage you could end up with your clawback extended indefinitely. I'd say it would be seen as renting and DCC would then extend your clawback for every year that you haven't lived there.

Trevorku's advice would seem wrong to me (unless I've misread your situation).
Bottom line is that if the property is still worth more than you paid for it you will get back what you paid for it - which puts you in a better position than most people who bought on the open market 5 years ago, you're not in negative equity. A chunk of your mortgage repayments will have been interest, but I'm guessng you'd still walk away with about 20k for a deposit for another place.
 
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