Print this PageAffordable Home Purchase Process
Once an affordable home applicant has been informed by the local authority that they have been offered an affordable home the following process commences.
Step 1: Provisional Letter of Offer
The local authority writes to the affordable home applicant and makes a provisional offer of the property.
Step 2: Solicitor Appointment
The applicant must engage a solicitor to act on their behalf in the purchase of the affordable home. The engaged solicitor's details are provided to the selling agent who should, at that point, instruct the vendor's solicitor to issue contracts.
Step 3: Confirmation to Lender Letter
The local authority will issue a ‘Confirmation to Lender’ letter to the applicant. It provides details of the market value, the purchase price of the property and the clawback percentage to be applied.
To secure mortgage finance, the purchaser must furnish the ‘Confirmation to Lender’ letter to the participating lending institution. On approval of the loan, the lender will issue a formal letter of loan offer to the applicant. A copy of the loan offer must be submitted to the local authority.
Step 4: Charging Order and Solicitor's Undertaking
There are two additional legal documents which are required by the purchaser's solicitor and which are specific to an affordable home transaction. They are as follows:
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Charging Order
The Charging Order document contains the market value and the purchase price of the property and the clawback percentage to be applied, as contained within the Confirmation to Lender letter.
Where private finance is used to purchase the property, a separate charging order is sealed by the local authority and lodged by the purchaser's solicitor when registering with the Property Registration Authority/ Registry of Deeds. The charging order ranks second in priority to the lending institution's charge on the property.
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Solicitor's Undertaking
Prior to signing of a contract to purchase, the purchaser's solicitor's is obliged to register the mortgage/charge. The purchaser's solicitor must furnish a Solicitor's Undertaking, signed by the purchaser, to the local authority to register the Charging Order in the Property Registration Authority/Registry of Deeds, post completion.
