De­tails on HBFI are as sparse as houses

The Irish Times - Business - - NEWS -

An­other bud­get, an­other acronymed agency to get our heads around.

Step for­ward, House Build­ing Fi­nance Ire­land (HBFI), a new beauty un­veiled by Min­is­ter for Fi­nance Paschal Dono­hoe on Tues­day, aimed, as he put it, at in­creas­ing “the avail­abil­ity of debt fund­ing on market terms to com­mer­cially vi­able res­i­den­tial devel­op­ment projects whose landown­ers want to build homes”.

It is planned that the agency, which will be run as a stand­alone en­tity and re­quire en­abling leg­is­la­tion, will of­fer loans to de­vel­op­ers that are not cus­tomers of Nama for “vi­able” projects. It will be fi­nanced with €750 mil­lion from the Ire­land Strate­gic In­vest­ment Fund (or ISIF, which it­self was only formed in 2014 after a pro­tracted birth).

The aim is that it will fund the devel­op­ment of 6,000 homes, while loans are ex­pected to be of­fered for as much as 80 per cent of the value of de­vel­op­ments at a time when banks are of­fer­ing a maximum 65 to 70 per cent.

Be­yond that, de­tails so far are sparse enough.

It’s not clear when HBFI will be up and run­ning, who will man­age it or how long a life­span it will have.

But Nama of­fi­cials in­di­cated yes­ter­day that their role will be lim­ited to pro­vid­ing out­sourced ser­vices to HBFI as the State’s bad bank has enough to be get­ting on with fi­nanc­ing is own debtors’ house­build­ing plans.

The an­nounce­ment of HBFI comes at a time when there’s an es­ti­mated an­nual 15,000-20,000 short­fall in home com­ple­tions – and in a week when a Con­struc­tion In­dus­try Fed­er­a­tion sur­vey found that 63 per cent of de­vel­op­ers seek­ing to build homes at a time of chronic un­der­sup­ply have re­ported dif­fi­culty in se­cur­ing fi­nanc­ing when they ap­proached fi­nan­cial in­sti­tu­tions last year.

The level of loan de­mand HBFI re­ceives when it is ac­tu­ally es­tab­lished will see whether the in­dus­try’s com­plaint holds much wa­ter.

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