The Minister for Housing has denied that the Government's new home loan and equity schemes for those trying to get on the property ladder will put the State's finances at further risk.

Michael Finneran also denied that the measures were being taken to help builders to offload excess stock.

He said they were purely designed to extend credit to first-time buyers unable to secure finance due to the credit crunch.

Under the Home Choice Loan scheme, the Government will lend up to 92% of the value of a home to an individual buying a new house, provided they are a first-time buyer and earn in excess of €40,000 a year.

They must also be in permanent employment for at least two years, and be able to prove that they have been unable to secure a sufficient mortgage from a bank or building society.

The loan will be at the commercial variable lending rate and the risk of each loan will be assessed using the same grounds that banks use.

Mr Finneran said the purpose of the scheme, which will be launched properly in a fortnight, is to extend loans of up to 92% to buyers who at present who are only being offered loans of around 80% by the banks.

The aim of the Government Equity scheme is to streamline the existing affordable housing initiatives into one system.

Instead of selling properties to buyers at a reduced rate, subject to a clawback if they are sold on, the local authorities administering the new scheme will take an equity stake equivalent to the amount that is currently being discounted.

The State's equity will remain as a set percentage of the market value of the house and will stay in place until fully repaid or bought out.

Both schemes will be financed from the market through the Housing Finance Agency, which borrows from the international markets at Government rates, and will lend on at commercial rates.

Outlining details of the scheme, Mr Finneran said there would be no maximum placed on qualifying earnings for those seeking a Home Choice Loan.

He rejected suggestions that the declining value of houses put the State at risk, saying all normal risk management systems will be put in place. Valuations would be done by the State, he said.

Mr Finneran also said that because we are approaching the bottom of the housing correction, the Government believes there is good value there for first-time buyers, which in time will benefit the Exchequer.

He said both schemes will allow Government to recycle money they earn back from the loans and equity into further affordable housing.