Cheaper loans for builders under new ‘Home Building Finance’ initiative
DETAILS of a new scheme to help kick start Ireland’s housing dilemma were announced as part of Budget 2018 as a €750 million injection of funds is to be made available under the ‘Ireland Strategic Investment Fund’ (ISIF).
Minister for Finance Paschal Donohoe said the new measures are for commercial investment in housing finance and funds and are to be made available through a new body called ‘Home Building Finance Ireland’ (HBFI). It’s likely this new state body will require some legislation and will need to be staffed in the coming weeks so chances are it may not be fully operational until early 2018. But at least it gives some builders an opportunity to plan in the interim period.
The announcement follows on the back of recent government speculation that a recast NAMA would supply cheap loans to developers to try and accelerate the building of new homes and apartments. However, it’s thought the HBFI will now increase the availability of funds for commercially viable and residential development projects.
Minister Donohoe said the new entity will use NAMA’s expertise in residential development funding while stressing the new measures would also tie in with the government’s existing plans to delivery 30,000 houses and apartments over the period to 2021 with potential to fund the construction of an additional 6,000 homes.
With some banks still adopting a ‘risk averse’ policy when it comes to construction related loans, the new scheme should help make cheaper loans available to builders which would be repaid as homes are sold.