27 July 2021
- Funding approved for 2,477 homes in 54 developments in 17 counties
- 74% of HBFI’s €730m capital committed in its first two and a half years
- 193 HBFI-funded units already completed and sold, with a further 866 contracted for sale or sale agreed
- 27% of HBFI-funded units are for social housing
Home Building Finance Ireland (HBFI), set up by the Government to fund the delivery of new homes, has grown total loan approvals to €539m in the first half of 2021.
This represents an increase of 36% on the €395m total approvals at the end of 2020 and means that HBFI has now committed 74% of its €730m capital in its first two and a half years of operation.
In a performance update published today, HBFI said that at the end of June 2021 it had approved funding for 2,477 new homes in 54 developments in 17 counties. Social housing projects account for 27% of the new homes approved for funding.
193 HBFI-funded units have already been completed and sold, with a further 866 contracted for sale or sale agreed.
Of the €539m approved, the first drawdowns have taken place in respect of facilities totalling €291m, for 19 developments totalling 1,364 units where construction is in progress or has completed. HBFI typically expects a time lag of between 3 and 6 months between a loan being approved and its first drawdown.
Units funded by HBFI range from one-bed apartments to 5-bed houses, with the majority consisting of 2 bed (796) and 3 bed (784) units aimed at the first-time buyer market.
Individual loan facilities range from €1m to €94m, with an average size of €10m. Terms of these facilities range from 12 months to 44 months, with an average of 21 months.
Post-Covid-19 Momentum Fund
- A key driver of the increase in lending approvals was HBFI’s Momentum Fund, a €200m fund that was launched in May 2020 to address a potential gap in the market arising from the Covid-19 pandemic.
- This “step-in” fund was set up specifically to help housebuilders commence large housing developments in prime locations in cases where funding may not have been available.
- As the initial €200m was fully committed within 3 months, the strength of demand resulted in HBFI adding a further €100m to this Fund and extending the deadline for Momentum Fund applications to December 2021 to provide housebuilders with certainty over access to funding for qualifying developments.
HBFI Progress Update
Today’s progress update shows that, at end June 2021, HBFI’s key metrics compared to December 2020 were as follows:
End June 2021 |
End December 2020 |
|
Loan approvals |
€539m |
€395m |
Number of units supported |
2,477 |
1,850 |
Number of approved developments |
54 |
38 |
Average facility size |
€10m |
€10m |
Average development size |
46 units |
48 units |
HBFI Chief Executive Dara Deering said:
“We are making strong progress in deploying the capital needed to deliver thousands of new homes for owner-occupiers, renters and social housing.
We have widened our product range to make it easier for housebuilders to complete units quickly and get keys in the hands of people who are looking for a new home. We recognised the challenges the sector faced due to Covid-19 and responded with a product to support continued supply of new homes. Our products are innovative, responsive to market demand, and effective.
Just two and a half years since we opened for business, we are already close to approving 75% of the €730m capital that HBFI is initially making available. We are ready to add significant capacity to match demand in the coming years if required.”
The Minister for Finance, Paschal Donohoe TD, said:
“HBFI was established in 2019 as an important Government initiative to address a shortfall of finance available for the construction of residential housing in the State. Today’s update highlights that HBFI has successfully established itself as a strong presence in the residential development finance market in Ireland with and has approved funding, to end-June 2021, to support the potential delivery of over 2,470 new homes across 17 counties.
HBFI is therefore providing funding across a range of development sizes and is enabling construction to proceed on these projects to deliver much needed supply.”
Measures announced in 2020 and 2021 by HBFI to improve housing supply
During 2020 and 2021 HBFI announced a number of initiatives to extend its support for housebuilders:
- The €200m (subsequently extended to €300m) Momentum Fund for large developments in prime locations
- Extending HBFI’s existing offering to include more large-scale housebuilding firms, by doubling the upper limit for individual HBFI loans from €35m to €75m with an ability to increase further consistent with the requirement of individual schemes and HBFI’s normal assessment criteria
- Extending HBFI’s existing offering to include smaller housebuilding SMEs, reducing the previous minimum size requirement of 10 units to 5 units
- Agreeing to back major apartment developments for the first time
- A product specifically aimed at social housing with reduced fees, acknowledging the reduced ‘take out’ risk once the units are completed
- A new Green Loan product offering discounted loan rates for qualifying developments that promote sustainable practices and energy efficiency
About HBFI
- Established under the Home Building Finance Ireland Act 2018
- Commenced operations on 28th January 2019
- Has funding of €730 million made available by the Ireland Strategic Investment Fund (ISIF)
- A private company with its own Board operating on a commercial basis, wholly owned by the Minister for Finance
- HBFI is subject to State Aid rules and audited by the Comptroller & Auditor General
Counties in which HBFI is funding new homes
Carlow |
Galway |
Louth |
Offaly |
Clare |
Kerry |
Mayo |
Westmeath |
Cork |
Kildare |
Meath |
Wexford |
Donegal |
Laois |
Monaghan |
Wicklow |
Dublin |
Composition of HBFI-funded homes
Total |
Owner-occupiers |
Private Rental |
Social Housing |
Part V |
|
Houses |
1,404 |
842 |
26 |
472 |
64 |
Apartments |
1,073 |
19 |
842 |
189 |
23 |
Total |
2,477 |
861 |
868 |
661 |
87 |
Download the HBFI Mid-Year Update (July 2021) here