Mortgage to Rent/Shared Equity Schemes
The Scottish Government's National Mortgage to Rent Scheme may be able to help you if you are an owner occupier in mortgage difficulties and you are in danger of having your home repossessed.
The Scottish Government's information leaflet Are you in danger of losing your home? (opens new window) explains the scheme fully.
This is a national scheme. It is part of the Home Owner's Support Fund.
Eligibility
The main criteria to be met by any application to the Mortgage to Shared Equity scheme are:
- Home owners will need to have taken appropriate money advice and show that they have explored all options available to them, including discussing their situation with their secured lender(s), before applying to the scheme.
- Home owners will normally be at least three months in arrears on their mortgage and be unable to agree an alternative repayment schedule with their secured lender, but their secured lender must be willing to maintain a smaller level of credit should the application to the Mortgage to Shared Equity scheme be successful.
- Home owners should have at least 25% equity in their property.
- There will be a maximum value of properties that will be considered eligible for the scheme;
- Properties must be above the tolerable standard.
- Home owners will only be available for assistance through the Mortgage to Shared Equity scheme once - they cannot repeatedly apply to the scheme.
- Home owners will be able to buy back the Scottish Ministers' equity stake (in part or in whole) at some point in the future.
- When the property is sold, the Scottish Government will receive its share of the sale price.
- The home owner must live in the property as their main residence, and it must be adequately insured and maintained.
A home owner in arrears contacts an advice agency (such as the Council's Advice Shop or their local Citizens Advice Bureau) and their lender to discuss their financial situation. If they cannot manage their monthly finances, and their lender is unwilling to consider a payment holiday or alternative payment schedule, then - subject to meeting the eligibility criteria - an application can be submitted to the Scottish Government along with relevant supporting documentation.
The Scottish Government verifies Step 1 above, commissions a property valuation and establishes the level of secured debt. If the home owner has at least 25% equity in their property they may be eligible for consideration under the Mortgage to Shared Equity scheme and their application will be passed to a financial adviser acting on behalf of the Scottish Government.
The Scottish Government-appointed financial adviser calculates the level of equity that Scottish Ministers should offer to take in the property to reduce the home owner's secured debt to a 'manageable' level. (this will vary from case to case, but will take into account applicant's income and expenditure to assess what is affordable to the home owner).
The Scottish Government makes an offer to the home owner who has to decide if it is sufficient to manage their debt, through discussion with their independent money and legal advisers and secured lender(s). If either the lender or home owner feels the offer is insufficient, the home owner would be eligible to follow the Mortgage to Rent route or seek to sell their house on open market.
If the home owner accepts the Scottish Government's offer, lawyers will draw up the necessary legal documentation to allow the Scottish Ministers to take an equity stake in the property. (The home owner and lender must deal with remortgaging documentation separately.)
West Lothian Council's Open Market Acquisition Scheme (OMAS) was approved at Council Executive on 11th October 2016.
The council can offer up to market value to purchase ex-council properties on the open market. The property must be sold with vacant possession and each party will bare their own legal and valuation fees.
A value for money assessment will be carried out and the Council will seek the best value price that does not exceed the Home Report valuation. The property should not require more that £8,500 to be spent to bring it up to the Scottish Housing Quality Standard.
In the first instance the Council will seek to purchase 1 or 2 bedroom properties unless there is a strategic reason for purchasing a larger property.
If you are selling an ex-council property in West Lothian and are interested in the council purchasing this property then please see our Housing Policy and Strategies page for more information and to contact us through the enquiry form.
