Former key workers would have just two years to pay off the loan.
It is also claimed that continuing efforts by the ODPM to introduce a "clawback" clause into housing agreements have prevented the £690m project from getting going.
Adrian Shaw, director of Southern Housing Home Ownership, the affordable homes arm of South Housing Group, said: "If someone leaves teaching, are they likely to be able to afford a house within two years?
"You could have a whole class of people being made homeless, who then just have to be dealt with by the council."
The government intends to apply clawback to applicants both for shared ownership and for equity loans under the Homebuy scheme.
Concern is particularly directed at the former, where people take on a mortgage for part of the property and pay rent on the remaining share.
Typically, they will own just half the place, making it more difficult to pay back the grant, increasing the chance that they could lose their homes. Registered social landlords are also concerned that the clause might not be enforceable in the courts.
Key Worker Living was launched by John Prescott with great fanfare on 23 March.
But just three weeks later the ODPM is still finalising how the clawback will work.
Dave Simmonds, managing director at Keystart, one of the RSLs charged with delivery of the programme, said: "At the moment we have several dozen cases waiting to proceed and by the end of the month we could have a serious problem."
A spokeswoman for the ODPM denied the clawback work was slowing the process and said it was essential in order to recycle the grants and thus perpetuate the scheme.
"This money is for key workers in the front line of public services," she said. "If you leave the profession then you no longer qualify for the benefit – that is the way it has to be."
Source
Housing Today
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