Some local authorities and housing associations in Wales operate mortgage rescue schemes (MRS) to help homeowners avoid mortgage repossession if it is likely that otherwise the homeowner will be homeless.

Local authority mortgage rescue schemes are different to the Welsh government’s ‘Help to Stay – Wales’ scheme, which is available to eligible households in any local authority in Wales. Visit our Help to Stay page to find out more.

The local authority schemes are also very different to sale and rent back schemes operated by private, profit making companies.

Schemes are set up to work in two different ways:

• Some households will get a shared equity loan.
• Others will be offered help from a ‘mortgage to rent’ scheme, whereby a local housing association buys their property and rents it back to them.

Shared equity loan
To be eligible for a shared equity loan, you will need to have some equity in your property. If you qualify, you will be given an equity loan from a housing association which should enable you to keep up with your mortgage payments. The loan is repayable to the housing association but is interest free.

Mortgage to rent
If you cannot afford to continue owning a share of the property, the housing association may decide to buy the property at close to market value, and rent it back to you.

You would no longer own your own home and in most cases you would be given an assured or an assured shorthold tenancy.

Each council or housing association will have it’s own criteria to decide who is eligible for help under their MRS. You will need to contact them directly to see what their criteria are.

Funding for most schemes is limited, so not everyone who applies will accepted. Some of the things they are likely to consider when deciding if you can get help through the MRS are whether:

• you live in specially adapted housing to meet the disability needs of your household
• you would be in priority need for re-housing by the council if you become homeless
• your lender intends to repossess your home
• you will be homeless if the property is repossessed
• the property is your only or main residence
• the property is clear of any legal reasons that would prevent it being sold
• you are unable to sell the property and buy a cheaper home locally.

You can also contact your local council’s Housing Options team, homelessness team or housing strategy officers for advice as to whether there is a scheme in your area which could help you.

Shelter Cymru’s housing advisers can explain the schemes and help you work out if you might be eligible. We also have specialist debt advisers if you need more in depth debt advice.