Home Building Finance Ireland

The The Shareholding and Financial Advisory Division (SFAD) also contributes to other related initiatives such as the establishment and operation of Home Building Finance Ireland (HBFI).

HBFI was established as part of a wider response to Ireland’s housing supply shortage, as a measure to address the lack of appropriate finance options in the market. HBFI provides funding for viable residential development projects throughout Ireland, with lending initially focused on smaller builders and developers and sites outside the main urban areas where such lending was not readily available in the market.

Along with helping to stimulate competition in the residential development finance market, HBFI also plays an important role in assisting developers whose lack of recent development experience may be an obstacle to their developing otherwise viable projects, which may in turn facilitate access to additional funding options for those developers in the future.

HBFI commenced operations on 28 January 2019 with funding of €730 million which was made available to them by the Ireland Strategic Investment Fund (ISIF) upon direction from the Minister for Finance.

In May 2021, the Minister for Finance published a review of HBFI, as mandated by section 24 of the Home Building Finance Ireland Act 2018.

HBFI Products

Standard Development Funding Product

HBFI’s original product offering was the Standard Development Funding Product, which is designed to fund residential projects of 10 units or more, up to a maximum facility size of €35m. It was always the intention to bring additional products to the market following an initial period of operation.

Momentum Fund

As a direct response to the impact of Covid-19, HBFI widened its remit on a temporary basis in May 2020, launching its “Momentum Fund”, beginning at €200 million and increasing to a fund of €300 million in response to the strength of demand. The Momentum Fund provides finance for larger prime residential projects which might previously have been funded by the mainstream banks.

The establishment of the Momentum Fund was not intended to compete with or replace HBFI’s original targeted market, but rather offer debt to lower risk exposures for a temporary period, to ensure that new large-scale residential projects continue to be commenced and delivered post Covid-19. The last date for approvals for the Momentum Fund product was 31 December 2021.

Small Development Funding Product (5-9 units)

This product has been developed specifically for smaller developments of between 5 and 10 units. These smaller schemes were not previously eligible to apply to HBFI for funding given the requirement for schemes to have a minimum of 10 units.

Additionally, projects under this product may qualify for the COSME (Competitiveness of Enterprises and SMEs) Loan Guarantee Scheme provided by the European Investment Fund. For those developments, HBFI will be able to provide funding at a higher level of gearing and thereby provide funding for small developments that might not otherwise qualify or have difficulty in raising funding for the development.

Apartment Developments

HBFI also developed a product specifically for apartment developments as a result of stakeholder feedback which showed there was a funding gap for apartment developments of scale. This product can potentially provide funding of up to €75m.

Social Housing Product

HBFI also launched a Social Housing Product with reduced fees specifically for housing developments being delivered to Approved Housing Bodies (“AHBs”) and Local Authorities.

Green Funding Product

Most recently, HBFI have introduced a ‘Green Funding Product’ which will support and encourage sustainable housing development across all HBFI products.