On the 10th October 2017, the Minister for Finance and Public Expenditure and Reform (“the Minister”) announced, as part of his Budget 2018 Statement, that the Government had decided to establish a new vehicle, Home Building Finance Ireland (HBFI).
The initiative was introduced as part of a wider response to Ireland’s major housing supply shortage which, over recent years has seen supply falling short of the estimated demand.
An important aspect of HBFI is that it is designed to avoid distortion in the market and comply with State Aid rules. Lending by HBFI will be on “commercial terms”, meaning that the interest rate will be in line with market rates. The establishment and funding of HBFI will not give rise to any unfair advantage or constitute State Aid. HBFI will be mandated by statute to seek a return to the State on the funds advanced to it.
The legislation establishing HBFI can be accessed here.