Home Building Finance Ireland scales up construction loans to €75m
Sunday May 10 2020, 12.01am BST, The Sunday Times
Home Building Finance Ireland (HBFI) plans to double its maximum loan amount to €75m and begin funding large-scale apartment construction amid government fears that some lenders are withdrawing from the sector because of the coronavirus crisis.
The state-backed agency, which has loaned €114m since the start of 2019, has earmarked €200m to replace funding that was previously provided by banks. The aim of this “step-in” finance is to allow large developments in prime locations to commence or be completed.
HBFI is broadening its target market by doubling a previous loan limit of €35m to attract larger developers.
It is also targeting small-scale builders by scrapping a requirement that the projects it finances must have at least 10 homes.
The changes represent a significant scaling up of HBFI, whose purpose is to use state-backed finance to provide additional funding for house-building rather than displacing funds coming from commercial lenders.
Building sites are due to reopen on a phased basis from May 18. House completions could drop as low as 16,000 this year, according to estimates from the Central Bank of Ireland, down from 21,500 in 2019.
“These supports are designed to help large and small house-builders through the crisis and facilitate continuity of supply of new homes,” said HBFI chief executive Dara Deering. “They are a natural extension of our existing offering, which has committed funding for over 600 new homes.”
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