Home Building Finance Ireland (HBFI), set up to fund the delivery of new homes, has boosted its total lending capacity by 27 per cent with a new €200 million facility with Danske Bank.
This is the first time that HBFI has raised market funding to complement its initial State funding, on which it has relied to date. The new facility will add to HBFI’s existing €730 million facility with the Ireland Strategic Investment Fund (ISIF).
HBFI will use the extra capacity to fund a growing pipeline of homebuilding projects – particularly among small and medium sized (SME) housebuilders, where HBFI is increasing its focus in response to evolving market conditions.
HBFI has used its existing ISIF facility to approve €3 billion in funding for over 15,000 new homes in over 200 developments in 25 counties throughout Ireland. Some 83 per cent of approved facilities have related to small housebuilders borrowing €20 million or less at a time.
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HBFI has been able to amplify its initial €730 million credit line to generate a much higher level of approved funding, by recycling loans as they are repaid from the sale of completed homes. This allows it to use repayments from earlier loans to fund new facilities with new borrowers.
The legislation establishing HBFI gives it the power to raise up to €750 million in market funding, in addition to its €730 million ISIF facility.
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HBFI chief executive Dara Deering said: “We’ve decided now is the right time to borrow from the market, as we continue to increase the number of house building firms we support – particularly SME housebuilders.
“This new facility will allow us to fund even more homes and to continue to play a supporting role in alleviating Ireland’s supply shortage.
“Since opening for business in 2019, HBFI has made a substantial contribution to increasing the supply of new homes for first-time buyers, renters and people who need social housing, with over €3 billion in funding approved to build over 15,000 new homes.”
Danske Bank head of international units and country manager Ireland, Alistair Welch, said the facility will be used to add extra capacity to fund a pipeline of homebuilding projects.
