This represents an increase of 265% on the €108m total approvals at the end of 2019 and means that HBFI has now committed 54% of its €730m capital in its first two years of operation.
In a performance update published today and available here, HBFI said that at the end of December 2020 it had approved funding for 1,850 new homes in 38 developments in 17 counties. Social housing projects account for 32% of the new homes approved for funding.
107 HBFI-funded units have already been completed and sold, with a further 476 contracted for sale.
Of the €395m approved, the first drawdowns have taken place in respect of facilities totalling €263m (67% of approvals), for 16 developments totalling over 1,100 units where construction has commenced. 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.
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 during 2020 was HBFI’s Momentum Fund, a €200m fund that was launched in May 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 June 2021 to provide housebuilders with certainty over access to funding for qualifying developments.
HBFI Progress Update
Today’s progress update shows that, at end December 2020, HBFI’s key metrics compared to December 2019 were as follows:
|End December 2020||End December 2019|
|Number of units supported||1,850||537|
|Number of approved developments||38||17|
|Average facility size||€10m||€6m|
|Average development size||48 units||32 units|
New Green Loan product announced today
The Green Funding Product is designed to encourage the development of sustainable housing across all HBFI products by offering a discount of up to 0.5% on loans, giving housebuilders a financial incentive to address climate action in their development plans.
- In order to qualify for the product, the project must be certified to the HPI (Home Performance Index) or equivalent standard
- The product/discount is available across all HBFI’s loan products for large, medium and small housebuilding firms.
- Early engagement with HBFI is essential to ensure that the criteria for HPI certification is planned from the outset
- Further information regarding the qualification criteria can be found on the Irish Green Building Council Website at www.IGBC.ie
HBFI Chief Executive Dara Deering said:
“2020 saw HBFI move quickly from its start-up phase to become an active and substantial funder of 1,850 new homes in 17 counties across Ireland.
Despite the challenges of Covid-19, we have played a very strong role in delivering new homes and providing a wide selection of innovative funding products for housebuilders to comprehensively address market failures in the sector.
We have reached a significant milestone by approving more than 50% of the €730m capital that HBFI is initially making available. We have the ability to add significant capacity to match demand in the coming years if required.
We will continue to find new ways to improve the supply of new homes for buyers, renters and people who need social housing.”
The Minister for Finance, Paschal Donohoe TD, said:
“I welcome the significant progress made by HBFI over the course of 2020 during what has been a very challenging time for the sector. Through a number of impactful initiatives HBFI has facilitated the continued supply of residential development funding to areas where it is most needed and has assisted maintaining much needed momentum in the delivery of housing supply.“
Measures announced in 2020 by HBFI to improve housing supply During 2020 HBFI announced a number of initiatives to extend its support for housebuilders:
- The €200m (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
- 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