- Capacity to fund delivery of 7,500 homes within 5 years
- Filling market financing gap for small and medium sized builders/developers
- 5-year loans of up to €35m
- Applications being taken from today
Home Building Finance Ireland (HBFI), the new State lender for small and medium sized builders/developers, has opened for business today with an initial €750 million to fund the delivery of up to 7,500 new homes over the next 5 years.
HBFI will have €750 million available from the Ireland Strategic Investment Fund (ISIF) but has the ability to raise further funds on the market if needed.
How to apply:
- Applications can be submitted from today via the HBFI website at hbfi.ie.
- Further information is available from the HBFI website or the HBFI application helpline 01-238 4000
Key features of HBFI loans:
- All HBFI lending will be on commercial market terms, with interest rates charged reflecting the market, the credit risk of each particular project, the quality of collateral, the creditworthiness of the borrower and their track record in the delivery of residential development projects:
- Indicative margins of 5%-8% over Euribor; individual loan rates linked to level of risk
- Loan durations of up to 5 years
- Industry standard terms and conditions
- Loans of up to €35m for any single development
- Minimum development size 10 units
- Maximum loan size of €35m for any single development
- Sites must have planning permission or a lodged planning application
HBFI is not a developer/builder but is a funder and enabler of new homes.
HBFI may fund (subject to its terms and conditions):
- Purchase and development of sites
- Refinancing of existing debt to facilitate development
- Up to 60% of site value, subject to HBFI’s overall Loan to Development Cost (LTC) cap of 80%
Commenting on the launch of HBFI loans, Paschal Donohoe TD, Minister for Finance and Public Expenditure & Reform, said:
“HBFI is a smart, efficient and targeted measure that is just one aspect of the multi-faceted approach the Government is taking to resolve the housing crisis.
It will facilitate the construction of up to 7,500 new homes throughout the country by optimising the use of resources already available within the State and with minimum risk to the taxpayer.
With these strong foundations in place I am confident of HBFI’s future success and I wish the new team all the best in their endeavours.”
Eoghan Murphy TD, Minister for Housing, Planning and Local Government, said:
“This is a significant step in increasing the supply of new homes. It will help address the scarcity in development finance that has created a considerable bottleneck that has hindered supply.
There are no easy solutions to the housing crisis but a targeted measure such as HBFI can have a significant impact in addressing the underlying problems in the market and building on the progress already made in boosting supply”.
Michael Broderick, HBFI Project Lead, said:
“We are ready with an experienced team of specialist residential lending managers to lend to quality projects that can help address Ireland’s housing shortage.
We are actively targeting the existing gap in the market that has made it hard for small and medium sized builders/developers and we plan to facilitate this market segment in growing substantially over the next 5 years and beyond.”
About HBFI
- Established under the Home Building Finance Ireland Act 2018
- A private company with its own Board operating on a commercial basis, wholly owned by the Minister for Finance
- Subject to State Aid rules
- Will be audited by the Comptroller & Auditor General