Home Building Finance Ireland launches housebuilders support scheme

Home Building Finance Ireland (HBFI) has launched a series of new measures to extend its presence throughout the house building finance market in anticipation of a resumption of construction activity in the coming weeks.

The new measures are designed to facilitate a quick resumption of housebuilding throughout Ireland as COVID-19 restrictions are lifted.

HBFI Chief Executive Dara Deering commented: “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.”

Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD said: “Housebuilding firms need access to finance to deliver the new homes our society needs. The measures announced by HBFI today will help large and small firms resume housebuilding activity quickly and bring new developments to completion as soon as possible. This resumption is an essential step in beginning the recovery of the construction sector post Covid-19 and in addressing the urgent requirement for greater supply of new homes.”

The measures outlined are:

1. HBFI will provide a new €200m “step-in” fund for housebuilders where funding from banks may not be available

– New “Momentum Fund” designed specifically for large developments in prime locations that were previously funded by banks

– Addressing potential post Covid-19 gap in funding market to enable housebuilders to commence/complete developments

2. HBFI is extending its existing offering to include more large-scale housebuilding firms

– Doubling upper limit for individual HBFI loans from €35m to €75m

– Margins and fees similar to those typically charged by mainstream banks

– Gearing up to 80% for loans up to €35m, gearing up to 65% for loans up to €75m

3. HBFI is extending its offering to include smaller housebuilding SMEs

– Removing previous minimum size requirement of 10 units

– Loans from €1m, subject to commercial viability

– Margins and fees will be set at commercial terms that reflect the risk of each development

– Gearing up to 80%

4. HBFI is seeking to back major apartment developments for the first time

– Extending existing focus on houses and smaller apartment blocks to include major apartment developments

– Funding of up to €75m per development

– Margins and fees will be set at commercial terms that reflect the risk of each development

– Gearing up to 80%

Minister for Housing, Planning and Local Government, Eoghan Murphy TD said: “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. Construction will play a significant role in our economic recovery and HBFI will continue to pay 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.”