State Lender Launched In Bid To Build Homes

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A new State lender aimed at delivering 7,500 houses has officially been launched. Home Building Finance Ireland has a 750 million euro fund to lend to builders and developers.

Small & Medium sized Builders and developers will be able to apply for up to 35 million euro over a maximum of five years.

HBFI loans will be charge market interest rates and the borrowers track record will be taken into account.

Applications must be for a minimum of 10 units and sites must already have planning permission, or a planning application lodged.

HBFI is a private company with its own board operating on a commercial basis but is wholly owned by the Minister of Finance and will be audited by the Comptroller and Auditor General.

IPAV, the Institute of Professional Auctioneers & Valuers have welcomed the opening for business of the Home Building Finance Ireland €750m fund.

However, the organisation which represents 1,300 member firms cautioned that the loan terms and administrative detail must not be over burdensome.

IPAV Chief Executive Pat Davitt said his organisation had prevailed upon the Government for the past four years to introduce such a scheme.

“It’s imperative that HBFI would be in a position to offer loans with interest rates under 5pc if it is to succeed in bringing SME builders of badly needed residential homes back into the market.

“If it does it will mark an innovative and workable intervention that will bring back this type of builder who was the mainstay of Irish residential home building market in the past but who has been squeezed out by unviable interest rates from the pillar banks.

“If the terms are unrealistic and don’t take cognisance of market conditions for SME builders then the loan scheme will be superfluous and only benefit those who don’t actually need it, who would already be in a position to acquire funding from existing sources,” he warned.

Mr Davitt said his organisation sincerely hopes the HBFI loan scheme would achieve the stated aim of the Minister for Housing Eoghan Murphy of surmounting the lack of access to debt funding for many smaller and medium sized builders and developers.