The Government is committed to supporting approved housing bodies, AHBs, to contribute to the delivery of social housing. The purpose of the capital advance leasing facility, known as CALF, is to provide AHBs with a small amount of loan capital to assist them in securing other loan finance for the purchase, construction or refurbishment of new social housing homes. The loan facility can support up to 30% of the eligible capital cost of the project where the units will be provided under long-term lease arrangements, known as payment and availability agreements, for local authorities for social housing use. A nominal interest rate of 2% fixed per annum is charged by the local authority on the initial capital amount. Repayments on either the capital or interest are not required during the term of the loan, although where an AHB chooses to, repayments can be made during the term. No such repayments have been made to date. At the end of the term, the outstanding capital amount, plus the interest accrued, is owed and repayable to the local authority.
In recognition of the shift in investment required by AHBs towards construction of new units, my Department introduced upfront or accelerated CALF payments in 2015, a change to the scheme which was launched in 2011, which allows for the drawdown of funds prior to a project starting on site. Up to 95% of the approved CALF funding can be drawn down as specific milestones are achieved, while 5% is held back until the payment and availablity agreement is signed. The use of funding in this way provides more funding certainty for AHBs, particularly on construction projects. There are 42 projects that have received approval for accelerated CALF payments, amounting to over €63 million in capital advances.