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Please note: We currently have no funding to offer this financial year for Capital and Interest Repayment Loans and Equity Loans. We will update these pages when new funding is available.

The council offers two types of loan products:

  1. Capital and Interest Repayment Loan
  2. Equity Loan

A combination of loans, or a combination of loan and grant may be required to suit a Homeowner’s individual financial circumstances.

1. Capital and Interest Repayment Loan

This is a loan for applicants who are able to make monthly repayments.

The interest rate will be fixed at the date of application, so that the monthly repayment will always be the same, and the amount of interest that will be charged will be known to the home owner at the beginning of the loan. The monthly repayment will consist of an interest payment, and a reduction in the amount of capital owed.

Applicants may be able to borrow between £500 and £15,000, over a term of 1-15 years.

The repayment period will depend upon the circumstances of the individual, and the amount borrowed. We will use the affordability test to make sure that monthly repayments will be affordable – no more than one third of the monthly disposable income will be used in calculating reapyment amounts.

Loans of more than £3,000 will be secured with a legal charge against the home.

Loans of less than £3,000 will not be secured with a legal charge against the home, but a land restriction will be used to notify the council should the homeowner initiate sale of the property.

There will be no penalties should the client be able to overpay, or repay the loan early in full.

Who is eligible?

This loan is available to applicants who own their own homes but who are unable to access a loan from a commercial lender, but who are able to make regular repayments.

The loan will not be available to landlords, unless used to bring an empty property back into use or to carry out works to meet need for family sized homes. Such works may also be eligible should they not be financially viable without assistance from the Council. The value of the improved /converted property, and the cost of the works required will be taken into consideration. The Council may also consider evidence of local need, or the negative affect of the long term empty property.

What can the loan be used for?

  1. To assist owner occupiers to carry out works that will contribute to the Decent Homes Standard, or
  2. To assist an owner occupier who is not able to make their contribution towards a Government funded Energy Efficiency Scheme, or 
  3. To fund works that will enable an empty property to be brought back into use, or to help to reduce high density housing through conversion works to provide larger family homes or
  4. To assist a Client to make their contribution towards works funded by a mandatory Disabled Facilities Grant:
    • which are eligible for mandatory Disabled Facilities Grant but where their cost exceeds the maximum limit of £30,000, or
    • which facilitate independent living, but which are not eligible for mandatory Disabled Facilities Grant, or
    • to purchase a home that meets their needs, or can be more easily adapted.

2. Equity Loan

This loan is available for applicants who do not have sufficient income to make monthly repayments on a loan, but have equity in their property. No monthly repayments are required.

For the purposes of;

  • repairing, improving or adapting the home: applicants can access 80% of the available equity in their home
  • relocating to a replacement home: applicants can access 50% of the available equity in the replacement home.

Subject to the value of the available equity in the home, applicants can borrow between £500 and £35,000.

In certain circumstances particularly where applicants are:

  • relocating to a replacement home,
  • been living in overcrowded conditions,
  • moving into a home which had previously been empty for more than 6months, and was in a poor condition,
    a larger loan than the maximum of £35,000 may be available at the discretion of the Council, subject to the amount of available equity in the replacement home.

Repayment of the Loan

The amount of loan will be translated into a percentage of the property value at the time the loan is approved. This percentage will be used to calculate the amount to be repaid, at the time that the property is sold and the loan repaid.

This will require the property to be valued at the beginning, and at the end of the loan period.

Repayment will be required on sale, disposal of the property, or upon the death of the Client.

Should the applicant wish to repay the loan (or part of the loan) at any time before the property is sold, the amount to be repaid will be calculated using the value of the home at that time. There will be no early redemption charges.

Eligibility

This loan is available to applicants who own their own homes and who;

  • are unable to access a loan from a commercial lender on reasonable terms,
  • are unable to make monthly repayments on a Capital and Interest Repayment Loan and
  • have equity in their homes.

The loan will not be available to landlords, unless being used to bring an empty property back into use or to carry out works to meet need for family sized homes. Such works may also be eligible should they not be financially viable without assistance from the Council. The value of the improved /converted property, and the cost of the works required will be taken into consideration. The Council may also consider evidence of local need, or the negative affect of the long term empty property.

What can the loan be used for?

  1. To carry out works that will contribute to the Decent Homes Standard, or
  2. To bridge the gap between the value of the current home and the cost of a replacement where the applicant is affected by Council’s plans for property demolition. The Equity Loan may not be available should the applicant choose to move outside of a set geographical area. This area will be clearly defined by the Council and the information made available to affected residents, or
  3. To fund works that will enable an empty property to be brought back into use, or to help to reduce high density housing through conversion works to provide larger family homes, or
  4. To assist an applicant to make their contribution towards works funded by a mandatory Disabled Facilities Grant:
    • which are eligible for mandatory Disabled Facilities Grant but where their cost exceeds the maximum limit of £30,000, or
    • which facilitate independent living, but which are not eligible for mandatory Disabled Facilities Grant, or
    • to purchase a home that meets their needs, or can be more easily adapted.

 

See also

Contact us

Home Improvement Team
Gateshead Council
Civic Centre
Regent Street
Gateshead
NE8 1HH
Tel: 0191 433 3000
E-mail: privatesectorhousingcivic@gateshead.gov.uk