The Scottish Government has announced a new Self Build Loan Fund which will allow anyone struggling with finance for a self-build to apply for lending.
The scheme is open to applications from those who have been unable to obtain self-build mortgage finance, but will be eligible for mainstream mortgage finance upon completion of their build. It’s set to run for three years and will offer loans of up to £175,000 to help with the construction fees for both rural and urban projects.
The £4m fund has come off the back of the success of the Highland Self Build Loan Fund, which saw people in rural areas provided with funding to build their own home.
The money is delivered by the Highlands Small Communities Housing Trust as agent as a form of “bridging finance” for the period of the build. It is secured via a Standard Security over the applicant’s future house and released in stages in line with an agreed build programme, accompanied by a Professional Advisor’s Certificate.
Those wishing to use the fund to buy a plot of land won’t be eligible, as the terms dictate that in order to provide security for the loan the applicant must fully own the land.
Scottish Housing Minister Kevin Stewart commented on the fund: “We know that people are interested in building their own homes and in some cases, it is the best way for families to tailor their homes to their needs. However, we also know it can be tough to secure funding and get the right advice, which is why we set up the self-build loan fund.”
To be eligible for the fund applicants must:
- Demonstrate they have been unable to obtain a standard self-build mortgage for a new home
- Intend to occupy the property as their “sole and only residence”
- Own a plot which is ‘unburdened’ (has no mortgage finance or ranking agreement)
- Have full planning permission and be ready to apply for a building warrant
- Have a defined build cost and programme
- Be able to demonstrate they will be able to obtain a mainstream mortgage upon completion of the build.