€750 million State Loans Scheme to provide 7,500 homes in the next five years
On 28 January 2019 it was announced that the new State lender for small and medium sized developers known as Home Building Finance Ireland (“HBFI”) has opened for business with an initial €750 million which is expected to fund the delivery of up to 7,500 new homes over the next five years.
The scheme aims to fill the gap in the market where small and medium sized builders have been unable to secure loans from banks or other lenders. Small and medium sized developers will have access to five-year-loans of up to €35 million, for developments ranging in size from 10 to 200 homes.
In order to qualify the developer must have secured a planning permission or submitted a planning application for a project and the development must be deemed to be commercially viable by the HBFI and the developer must provide a minimum of 20% equity, which can include the value of the site.
HBFI will be funded from the Ireland Strategic Investment Fund. Paschal Donohoe, the Minister for Finance and Public Expenditure & Reform has said that “the 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”.
Hopefully the establishment of HBFI will produce more housing which will ease some the housing crisis that is felt nationwide.
For further information please get in touch with your usual Whitney Moore contact, James O’Mahony or any member of our Real Estate team.