Dáil Éireann Debate, Tuesday - 24 October 2017
49. Deputy Barry Cowen asked the Minister for Finance the role his Department has in setting out the criteria for successful applicants to the recently announced Home Building Finance Ireland; and if he will make a statement on the matter. [45248/17]
View answerAs announced in my Budget speech on 10 October 2017, it is my intention to establish Home Building Finance Ireland (HBFI) to provide funding on market terms to viable residential development projects whose owners are experiencing difficulty in obtaining debt funding.
HBFI will be a stand-alone entity which will provide funding directly into the market.
My officials are currently working on the enabling legislation and logistical arrangements for the establishment of HBFI. It is expected that HBFI will be established as a limited company under the Companies Acts and will have its own Board.
As a result, the specific products offered and associated criteria for applicants will be set by the Board of HBFI in due course. HBFI will operate on an arms length basis and neither I nor my officials will have any input in the day to day commercial decisions of the entity.
HBFI will be designed to leverage off the extensive experience already available to the State to deliver this initiative and as such existing NAMA staff skills and expertise will be utilised to deliver this funding. Any services provided by NAMA to HBFI will likely be provided under a service level agreement with HBFI re-imbursing NAMA appropriately for any services delivered. The exact staffing and servicing arrangements are currently being devised by my officials and will be determined in due course.
I can confirm that HBFI will be lending on commercial, market-equivalent terms and conditions, which would depend on the risk profile of each individual project, the quality of collateral and the creditworthiness of the borrower. This approach would be akin to a bank or private equity investor, in that HBFI would not be directly involved in development – its role would be solely as a commercial lender. Commercial viability testing will also ensure returns are the same as market norms.
