- 2021 performance update shows funding approved for 3,729 homes in 71 developments in 18 counties
- 519 HBFI-funded units already completed and sold, with a further 1,359 contracted for sale or sale agreed
- 23% 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 €835m at the end of December 2021, more than double the €395m total approvals at the end of 2020 (an increase of 111%).
The strong performance during 2021 means that HBFI has now committed all of the €730m capital initially allocated to it at inception three years ago.
HBFI will continue to have significant lending capacity available for future lending from recycling the proceeds from existing loan repayments. It also has the ability to access additional capital through market-based borrowing if required.
In its 2021 performance update published today and availale here, HBFI said that at the end of December 2021 it had approved funding for 3,729 new homes in 71 developments in 18 counties. Social housing projects account for 23% of the new homes approved for funding.
519 HBFI-funded units have already been completed and sold, with a further 1,359 contracted for sale or sale agreed.
Of the €835m approved, drawdowns have taken place in respect of facilities totalling €474m, for 35 developments totalling 2,228 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 (14%) to 5-bed houses (1%), with the majority consisting of 3 bed (37%) and 2 bed (32%) units aimed at the first-time buyer market.
Individual loan facilities range from €1m to €94m, with an average size of €12m. Terms of these facilities range from 12 months to 44 months, with an average of 21 months.
Covid-19 - €300m Momentum Fund
- A key driver of lending approvals was HBFI’s Momentum Fund, launched in May 2020 to address a 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. The Momentum Fund is over 90% utilised has now closed to new applications.
HBFI Progress Update
Today’s progress update shows that, at end December 2021, HBFI’s key metrics compared to December 2020 were as follows:
HBFI Chief Executive Dara Deering said:
“2021 was a very strong year for HBFI. Our funding is on course to deliver thousands of new homes for owner-occupiers, renters and social housing and make a real difference to the supply challenge.
Our product range widened significantly to provide customised funding for new houses and apartments across 18 different counties throughout Ireland.
Housebuilders are voting with their feet and successfully using our products to initiate and complete both large and small developments quickly and effectively.
Although HBFI has only been in business for three years, we have already approved well in excess of our initial capital allocation of €730m. We are ready to add significant capacity to match demand if required.”
The Minister for Finance, Paschal Donohoe TD, said:
“HBFI’s full year business results for 2021 show that HBFI continues to have a strong positive impact on increasing the supply of financing for residential development within the State. Through its broad product range, and agile business model, HBFI plays a key role in the Government’s strategy to increase the supply of new housing and meet the targets set out under the Government’s Housing for All plan.
It is important to acknowledge the growth and innovation in HBFI’s product range during 2020 and 2021, including a product specifically aimed at social housing and a new Green Loan product offering discounted loan rates for developments that promote sustainable housing delivery.
HBFI’s Momentum Fund which was launched in May 2020 as a direct response to the Covid-19 financing challenges provided close to €300m in funding. Overall, HBFI has approved funding for 3,729 new homes in 71 developments in 18 counties. I would like to thank HBFI and their staff for their continued work and I am confident that 2022 will be another successful year.”
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 (now closed for new applications)
- 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, for qualifying schemes under 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 housing delivery
- Established under the Home Building Finance Ireland Act 2018
- Commenced operations on 28th January 2019
- Initial funding capacity 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