A €500m government programme designed to bailout developers should be scrapped a TD has said, adding that any loans have yet to be released from the scheme.

Fine Gael housing spokesman Terence Flanagan said the Home Choice Loan Scheme should be discontinued, after receiving information from the Housing Minister during Environment Questions in the Dáil yesterday afternoon.

He claimed nobody has been "fooled by this scheme".

"According to the Minister, 1,400 people have registered an interest, 33 people have applied for the scheme, two people have been approved yet no loans have been drawndown," said Mr Flanagan.

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He claimed the scheme was "nothing more than a PR stunt", rather than a meaningful scheme.

"If it were a serious plan, there would be more than two prospective homeowners receiving approval."

When the scheme was first announced last October, Mr Flanaghan said Fine Gael highlighted major concerns about luring first-time buyers into negative equity as housing prices continued to fall.

"Under this Scheme, the Government becomes a 'sub-prime' lender lending 92% of the cost of a home to potential buyers," he said.

"Freedom of Information documents previously released to Fine Gael showed that the builders' representatives, the Construction Industry Federation, met directly with the Housing Minister prior to the October Budget, lobbied for this exact scheme and received precisely what they asked for."

The TD said while initiatives to help first-time buyers into the property market are welcome, this scheme was "unsuitable and was designed to benefit developers".

"It should never have been introduced and it is clear now that it must be abandoned," he added.

(PR/JM)