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Home Building Finance Ireland Announces New Measures To Support Housebuilders

Home Building Finnace ireland

Home Building Finance Ireland has opened new channels to enable more small and large housebuilders access funding to resume developments. The measures will also make funding available for large apartment developments for the first time.

Home Building Finance Ireland (HBFI) has launched a series of new measures to extend its presence throughout the housebuilding finance market. The measures are designed to facilitate a quick resumption of housebuilding throughout Ireland in the wake of Covid-19 restrictions being eased.

The measures are being introduced under three actions:

  • Providing new ‘step-in’ funding for housebuilders where funding from banks may not be available to enable them to commence new housing developments
  • Allowing a broader range of housebuilders (both large and small) to access HBFI’s €750m funding; and,
  • Funding of major apartment developments for the first time.
Home Building Finance Agency

Step-in Funding

Home Building Finance Ireland is providing a new €200m step-in fund for housebuilders where funding from banks may not be available.

This takes the form of a new Momentum Fund, which is designed specifically for large developments in prime locations that were previously funded by banks. HBFI is also addressing potential post-Covid-19 shutdown gaps in the funding market to enable housebuilders to commence/complete developments.

Broader range of housebuilders

HBFI has extended its existing offering to include more large-scale housebuilding firms by doubling the upper limit for individual HBFI loans from €35m to €75m. Margins and fees are similar to those typically charged by mainstream banks, with gearing of up to 80% for loans up to €35m and up to 65% for loans up to €75m.

Smaller Housebuilders

HBFI has extended its offering to include smaller housebuilding SMEs by removing previous minimum size requirement of 10 units. Subject to commercial viability, loans from €1m are available. Margins and fees are set at commercial terms that reflect the risk of each development with gearing up to 80%.

Major Apartment Developments

HBFI is seeking to back major apartment developments for the first time by extending the existing focus on houses and smaller apartment blocks to include major apartment developments. HBFI is offering funding of up to €75m per development with margins and fees set at commercial terms that reflect the risk of each development, and gearing up to 80%.

Home Building Finance Ireland
Dara Deering, New CEO, Home Building Finance Ireland.

Continuity of Supply

Dara Deering, Chief Executive, HBFI, speaking about the new HBFI offerings says that Covid-19 crisis has had an unprecedented impact on the Irish economy with huge implications for construction firms and home builders.

“Covid-19 is an unprecedented health and economic crisis that has significant implications for the viability of many construction firms and for the delivery of new homes.

“The supports we are launching today are designed to help both large and small housebuilders through the crisis and facilitate continuity of supply of new homes in the months and years ahead.

“These measures are a natural extension of our existing offering, which has already committed funding for over 600 new homes since we opened for business just over a year ago.

“HBFI has the right skills, processes and people to help construction firms move quickly to respond to the immense challenges posed by Covid-19. We aim to play a significant and ongoing role in sustaining housebuilding, enhancing access to funding and meeting our society’s urgent requirement for more housing supply.”

Paschal Donohoe TD, Minister for Finance and Public Expenditure and Reform, says that housebuilders need access to funds at this time to deliver much needed new homes.

“Housebuilding firms need access to finance to deliver the new homes our society needs. The measures announced by HBFI will help large and small firms resume housebuilding activity quickly and bring new developments to completion as soon as possible,” Paschal Donohoe says.

Eoghan Murphy TD, Minister for Housing, Planning and Local Government, says that since its establishment HBFI has had a considerable impact in helping to deliver new housing.

“HBFI has made significant progress in accelerating the delivery of new homes since inception last year and these new measures demonstrate the Government’s commitment to widening the range of measures that will drive greater housing supply,” Eoghan Murphy says. “Construction will play a significant role in our economic recovery and HBFI will continue to play a vital role in maximising the sector’s capacity to generate significant economic activity and employment and in closing the gap between supply and demand for housing.”

Demand for Funding

Speaking to Dara Deering, initial indications show that the new products are in high demand and there has been strong interest since the new products were launched in early May. Dara says that “HBFI are very pleased with the level of interest to date. Positively, we have seen an uplift in demand from residential developers for a range of funding options. We are here to lend money for viable residential developments from 5 units to 300 units”.
It is a welcomed initiative amidst the current uncertainty facing the industry.

For further information regarding the Home Building Finance Ireland products or to contact HBFI directly, visit the website www.hbfi.ie