Home for Life buys housing
BRAY company Home for Life, which is spearheaded by local businessman Paul Cunningham, has raised quarter of a billion Euros as part of its plans to complete the purchase of 1,500 social housing from the New Year.
This is one of the biggest corporate transactions of 2019 with CEO Mr Cunningham confirming they had worked with LCM Capital Partners to raise €75m in equity with the remaining €175m debt being provided by Irish pillar banks.
As a government approved operator in the mortgage-torent scheme, Home For Life is buying social housing stock from banks and funds as part of its plan to deal with a large percentage of the 27,000 homeowners in long-term mortgage arrears.
The new financial arrangement will underpin mortgageto-rent deals with banks and funds for families who otherwise would face potential repossessions due to unsustainable mortgage arrears.
Under these deals, Home For Life purchase the home and enter a long-term social housing type lease with a local authority, have the residual debt resolved for the mortgage holder whilst they also receive a long term income based leas from the local authority.
Mr Cunningham explained that Home for Life was the only private company approved to facilitate such deals and he estimated that around 9,000 families with distressed mortgages could qualify under the government’s scheme.
He said: ‘Our company wants to find a solution for as many of these cases as we can.
‘I want to stress that the lenders now see that going to court to get evictions doesn’t work, but mortgage-to-rent does.
The CEO said his company was currently working with 460 homeowners at various stages of the mortgage-to-rent process.
Six cases had been completed but he believed 2020 would see a much greater approval rate as stakeholders across the scheme provided extra resources to deal with increasing volumes.
The fund-raising deal just announced would also help speed up cases being resolved.
Mr Cunningham said he foresaw about 100 cases a month being completed.
‘The banks and funds are now very much pushing mortgage-to-rent as a solution for borrowers that have no ability to pay and who cannot benefit from a loan restructuring,’ he said.
‘Many of the people we encounter are in vulnerable circumstances because of family break-up or job loss of because they find themselves approaching retirement age with mortgage debt they know won’t be serviced on a state pension.’