Fianna Fáil is demanding the introduction of an affordable housing scheme which will see homeowners enter into a shared-ownership arrangement with local authorities.
The scheme, which is central to Budget negotiations, will see local authorities buy houses from developers before offering them at significantly subsidised rates to first-time buyers. Local authorities will retain a stake in the properties until the home is sold or bought out by the property owner.
The scheme will be targeted at people earning between €30,000 and €90,000.
It is envisaged that Dublin local authorities would subsidise houses by as much as 50pc under the scheme which aims to provide houses priced between €160,000 and €200,000. Fianna Fáil is insisting on the scheme being introduced next year to ensure there is no delay in the roll-out of affordable housing.
The party is also proposing a more comprehensive long-term affordable housing scheme that would involve local authorities building new homes. This would see €200m earmarked to build 4,000 affordable houses.
The two schemes form the backbone of Fianna Fáil's demands ahead of the final budget of the confidence and supply arrangement.
Fianna Fáil housing spokesman Darragh O'Brien, along with the party's budget negotiator Barry Cowen, yesterday met Finance Minister Paschal Donohoe and Housing Minister Eoghan Murphy to discuss the proposal.
A Fianna Fáil source said it was "making slow progress" on affordable housing but insisted the two new schemes are at the centre of its budget demands.
Fine Gael and Fianna Fáil will meet over the coming weeks to determine how much funding is available for social housing.