Families will have an opportunity to rent back their homes from not-for-profit iCare
A new scheme aims to keep families who have fallen behind on their mortgages in their homes.
AIB has agreed to sell hundreds of homes in deep arrears to a group fronted by the mortgage campaigner David Hall.
The not-for-profit iCare Housing will then rent the properties out to the families that previously owned them.
The Irish Independent reports that the scheme, which has Government backing, has funding of up to €100m.
Homeowners participating in the scheme will have their debt written off once they surrender their homes.
However the company has said that they will have an opportunity to buy them back - at the discounted price paid by iCare - once their circumstances improve.
Families will be required to qualify for social housing in order to participate in the scheme.
The scheme has been announced as the Irish Council for Social Housing (ICSH) holds a major conference on the homeless and housing crisis.
Speaking on Newstalk Breakfast, ICSH chief executive Donal McManus warned that Ireland is now facing a “perfect storm.”
“We have problems in the private rental sector; we have a lack of supply of affordable rental housing,” he said.
“The problem with social housing is probably at its highest level of our generation.
“Really the key thing is to keep the focus by government on providing finance for social housing.”
The scheme has been widely welcomed as a novel way to stem the tide of families falling into homelessness; however it has come in for criticism from consumer body askaboutmoney.com.
The website’s founder Brendan Burgess described it as a “kick in the teeth” for families who have made sacrifices to pay their own bills.
“You have probably cancelled your holidays, you have probably cancelled your health insurance and you are paying AIB and the other banks in Ireland one of the highest mortgage rates in Ireland,” he said.
“Because not only are you paying your own mortgage, you are paying the mortgage for people who don’t pay their mortgages.”
“This really is a kick in the teeth.”
iCare will be funded via the Housing Agency, local authority rental income and commercial lending.
It is also set to receive commercial funding from AIB.