Brendan Burgess
Founder
- Messages
- 52,176
What will Hall do if the tenant doesn’t pay the rent?
Hi Delboy
This is how a Mortgage to Rent works
1) iCare buys the house from the owner
2) the proceeds are paid to the lender who writes off the shortfall
3) iCare rents the house to the Local Authority at market rent - probably about 10% of the property value
4) The local authority rents the house to her on a differential rent - an average of €50 a week.
iCare is not allowed by the rules to sell the house back to her. However, you can be sure that in time, political pressure will result in a change to these rules.
Her kids will probably buy the house at 60% of the market value.
Brendan
That’s hilarious.He won't give a damn.
His tenant is the Local Authority. They will pay him whatever happens.
Brendan
I understand that Brendan. My point was that the kids buy it from iCare at that 60% reduce price say in 20 years time. 2 years later they sell it at market value.Hi Delboy
This is how a Mortgage to Rent works
1) iCare buys the house from the owner
2) the proceeds are paid to the lender who writes off the shortfall
3) iCare rents the house to the Local Authority at market rent - probably about 10% of the property value
4) The local authority rents the house to her on a differential rent - an average of €50 a week.
iCare is not allowed by the rules to sell the house back to her. However, you can be sure that in time, political pressure will result in a change to these rules.
Her kids will probably buy the house at 60% of the market value.
Brendan
And whether it is costing the state more than them just paying the mortgage directly.
What are the staff costs in iCare? Are there any publicly available figures? Is it also not a little dodgy seeming that Mr Hall posts on social media the threat of a protest outside the house and then his company/charity buys the property?
Alarm bellsApparently it had no employees, and it abridged its financial statements, claiming it can do so under the Companies Acts.
I don't understand how there are no employees. Surely someone has to be managing all the paperwork, doing the negotiating etc. And that takes actual people. And they have to be paid.Alarm bells
"iCare is non-profit, with €100m in funding, buying the eligible properties at a heavy discount via ordinary commercial lending, Government-funded aid at low interest rates, with the local authority stumping up to 92pc of the rent stream via its normal housing support system."I am still curious as to how icare gets its long-term funding to purchase properties.
The housing body secured funding from AIB under normal commercial terms and borrowed to purchase the houses. The State funded 30% of the purchase price via a long-term low interest loan. Hall said most of the banks and one of the vulture funds have agreed to discounts on a case by case basis.
Though he said he was “not the biggest fan” of the banks, he said he had to give them credit today. Some 150 of these deals were made with AIB, but he said all of the main banks – and two funds – are engaging.
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