Details on HBFI agency are as sparse as houses

New housing body will be financed with €750m to offer loans to developers

Another budget, another acronymed agency to get our heads around.

Step forward, House Building Finance Ireland (HBFI), a new beauty unveiled by Minister for Finance Paschal Donohoe on Tuesday, aimed, as he put it, at increasing "the availability of debt funding on market terms to commercially viable residential development projects whose landowners want to build homes".

It is planned that the agency, which will be run as a standalone entity and require enabling legislation, will offer loans to developers that are not customers of Nama for “viable” projects. It will be financed with €750 million from the Ireland Strategic Investment Fund (or ISIF, which itself was only formed in 2014 after a protracted birth).

The aim is that it will fund the development of 6,000 homes, while loans are expected to be offered for as much as 80 per cent of the value of developments at a time when banks are offering a maximum 65 to 70 per cent.


Beyond that, details so far are sparse enough.


It’s not clear when HBFI will be up and running, who will manage it or how long a lifespan it will have.

But Nama officials indicated on Wednesday that their role will be limited to providing outsourced services to HBFI as the State’s bad bank has enough to be getting on with financing is own debtors’ housebuilding plans.

The announcement of HBFI comes at a time when there's an estimated annual 15,000-20,000 shortfall in home completions – and in a week when a Construction Industry Federation survey found that 63 per cent of developers seeking to build homes at a time of chronic undersupply have reported difficulty in securing financing when they approached financial institutions last year.

The level of loan demand HBFI receives when it is actually established will see whether the industry’s complaint holds much water.