What is the purpose of HBFI?
HBFI has been established to provide funding (senior debt) on a commercial basis to small and medium size residential development projects (circa €2m to €35m) throughout the Irish State. Funding will only be provided for residential projects that are commercially viable and meet the criteria as set out by HBFI.
Is HBFI a Bank?
HBFI is not a bank, however HBFI operates in a similar way to a bank, charging a commercial rate of interest for lending provided and taking security to support sums loaned. In the event of a borrower defaulting, HBFI will take all reasonable and legal courses available to it, to recover any outstanding amounts.
Who can apply for funding?
Any individual in control of a site can apply to HBFI for development funding. However, if a decision is made to approve funding, it will be made to corporate entities only.
What are the key commercial considerations in order to be considered by HBFI for funding?
The project must be residential, be commercially viable and must be capable of returning an appropriate profit margin on development costs.
What type/level of security will HBFI require in order to provide lending?
will require a first ranking full fixed and floating charge over the
assets of the SPV/entity, including the project.
Can I apply for funding if a site does not have planning permission?
A site must have planning permission in order to qualify for funding. However, if a planning application has been submitted to a Local Authority or An Board Pleanála, contact can be made with HBFI to discuss timing around the submission of a funding application.
What is the minimum number of units which HBFI will fund?
A development must have a minimum of 10 units (houses/apartments or a mix) in order to qualify for HBFI funding.
Will HBFI provide funding for the purchase of the development site?
HBFI may provide funding for the purchase of a site, subject to certain minimum criteria:
What will be the cost of funding charged by HBFI?
The lending rate will depend on the risk profile of each project, the quality of collateral, the creditworthiness of the borrower and the track record of the borrower in delivery of residential development projects. HBFI will lend on commercial, market-equivalent terms and conditions.
How much equity must an entity provide in order to borrow from HBFI?
A borrowing entity must provide a minimum of 20% equity. HBFI will fund up to 80% of the LTC (Loan to Cost) of a project.
Are there any other charges applied by HBFI?
HBFI may apply an entry and exit fee on any facility provided. In addition, any professional fees accrued in providing a facility will be for the account of the borrower.
What is the maximum term for which HBFI will provide funding?
HBFI may provide funding for a maximum term of 5 years.
What is the maximum amount of funding that HBFI will provide?
The maximum amount of funding that HBFI will provide to any single corporate entity is capped at €35 million.
Must the borrowing entity have evidence of tax compliance?
borrowing entity must provide HBFI with satisfactory evidence of tax
compliance as part of the application process and be able to
demonstrate at all times that the tax affairs of the entity are in
order and up to date.