Mortgage holders who do not qualify for State supports and in fear of home repossession can check Private CompanyArizun’s scheme who is offering to buy their homes, write off their debts, clear their mortgages and rent the homes back to them

Under the new scheme, for the first six years of renting, the families will have the chance to buy back the homes, and take a 40pc share of any rise in the value of the property to use as a deposit.

The scheme applies to the squeezed middle who do not qualify for State supports, so would not be able to get a mortgage-to-rent deal.

Arizun says the scheme is privately funded, with no State backing. This is in contrast to mortgage to rent, which is State-backed.

Debt-wracked mortgage holders who are in danger of having their homes repossessed are set to get a new lifeline.

The private company is offering to buy their homes, write off their debts, clear their mortgages and rent the homes back to them. Arizun says the rents will reflect market rates.

Some 28,000 mortgage accounts are in arrears for two years or more, with these people at high risk of having their properties repossessed.

Many of these are not engaging with their lenders, despite solutions on offer from the likes of the Insolvency Service of Ireland which could keep people in their homes.

Arizun boss John McDaniel said the majority of homeowners in arrears do not qualify for State-backed mortgage-to-rent deals.

This meant these people had few options up to now.

"Arizun's 'Stay In Your Home' solution is specifically directed at families with large mortgage arrears and no opportunity to receive Government support," he said.

Mr McDaniel said the number of home repossessions has been low, but he said this will change with the increase in sales of distressed mortgages by banks that are under direction to get their balance sheets cleaned up.

"Anyone earning over €42,000 a year does not qualify for Government assistance, and there are many distressed homeowners in the €50,000 to €100,000 earning bracket who can afford to pay rent but have significant mortgage arrears and are likely in negative equity. They are in danger of losing their homes."

London-based investment house LCM is backing Arizun, which said it has secured €100m in funding, with another €400m committed if the scheme takes off.

Mr McDaniel is an American who has lived here for 20 years and worked in international trade. Also part of the management team is Cathal O'Leary, who worked in treasury operations in NCB Stockbrokers and Investec.

Mr O'Leary said the company was capable of taking over 3,000 homes and renting them back to the former owners.

Homes are bought with the sale price based on current market rates.

Arizun buys the mortgage from the lender if the homeowners agree to hand over the title deeds.

The debt-stricken family will then have their arrears and mortgage debt written off and will enter into a rental lease.

"We are solving a serious problem for a group of families which nobody else has taken on," Mr McDaniel added.

He said the solution will not cost the State anything, unlike mortgage to rent, and it will keep families in their homes and communities.

With a mortgage-to-rent deal, the borrower's mortgage must be deemed unsustainable. The borrower must have an income low enough to qualify for social housing. Rental payments are subsidised by a local authority.

For more information see Stayinyourhome.ie.