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Government Launches Mortgage Rescue Scheme
On Friday 16th January Government launched the Mortgage Rescue Scheme (MRS), a new £200m package of measures designed to prevent some of the most vulnerable families losing their homes and experiencing the trauma of repossession. This scheme is aimed at those who would be eligible for homelessness assistance and is subject to a range of eligibility criteria.
For further information go to the Government's web site or telephone your Local Authority.
The mortgage rescue package has two elements:
Shared equity
This is designed to help householders who have experienced payment shocks and need some help in paying their mortgage.
Government Mortgage to Rent
This is designed to help the most vulnerable households on low incomes with little chance of sustaining a mortgage.
Eligibility criteria for Mortgage Rescue Package
On referral to the local housing authority, an assessment of a household's eligibility will be made in the same way as for homelessness assistance. The household must include someone with priority needs as defined in the Housing Act 1996 (and Priority Needs Order 2001):
- a pregnant woman or a person with whom she resides or might reasonably be expected to reside
- a person with whom dependant children reside or might reasonably be expected to reside
- a person who is vulnerable as a result of old age, mental illness or a handicap or physical disability or other special reason, or with whom such a person resides or might reasonably be expected to reside.
The following criteria will also apply:
- all owners of the property must agree to being considered for the mortgage rescue scheme
- equity owned in the property must be worth enough to cover priority debts and living in the property must be sustainable after mortgage rescue
- the household must have a clear need to stay in the area and it is not practical for them to trade down to another property in the area
the property must be suitable for the needs of the household (e.g. it is not overcrowded)
- owners must have sought debt counselling and advice, agreed to debt rescheduling and discussed alternative options with mortgage lenders before admission to the scheme
- applicants must not have a second home (including abroad)
- caps will be set on the value of the property (at regional level) and on the household's income level
How to apply
Households in financial difficulty, at risk of repossession and threatened with homelessness should seek advice from their lender in the first instance. Further advice and support will be available from local housing authorities, local Citizens Advice Bureaux or other advice agencies.
For further information about the Mortgage Rescue Scheme go to Government's web site or telephone your Local Authority.