€108m loans approved by Home Building Finance Ireland

The State-backed lender for small and medium builders and developers approved loans worth €108m in its first year of operation.

Home Building Finance Ireland (HBFI) was established in Jan 2019 with a fund of €750m from the Ireland Strategic Investment Fund with the aim of facilitating the construction of up to 7,500 homes over the next five years.

Some 17 schemes were approved in 12 counties in its first year of operation, including developments of more than 50 houses in Cork, and Kerry, and two developments of over 70 homes in Kildare.

In total, some 537 residential units were approved, with 15 of the 17 schemes located outside Dublin. Construction has started on just five of the approved schemes.

The figures were included in HBFI's first annual report. Dara Deering, HBFI CEO, said it is "a good start" but there is more to do:

"The solution for the housing market remains one of increasing supply and HBFI will do what we can to ensure that funding is available for commercially viable projects."

Marie Collins, HBFI chairwoman, said the coronavirus pandemic has had a major impact on housing development. At the start of the year, an estimated 25,000 homes were due to be finished in 2020. This has now been revised to 14,000.

Ms Collins said: "Covid-19 has brought significant uncertainty to all sectors, including the residential construction sector.

"We are working with all our customers to support them during this challenging time and with our stakeholders to position HBFI to be ready to play our part in supporting home building in Ireland as we move to recovery and growth."

Meanwhile, new Housing Minister, Darragh O'Brien, said he will ensure that Rebuilding Ireland home loan mortgages are not paused because of the pandemic.

The scheme is a Government-backed loan for first-time buyers available from local authorities.

Mr O'Brien was speaking to Newstalk after revelations that major lenders are imposing broad restrictions on lending in light of the pandemic, including a de facto ban on mortgage lending to those in receipt of State wage subsidies.

He said he is concerned at the “blanket nature” of the banks' response which does not take into consideration the specific circumstances of many mortgage applicants.

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