Eoin Ó Broin
Question:233. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage the status of efforts to see credit union lending for social and affordable housing. [58427/21]
View answerTuesday, 30 November 2021
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Written answers
Following engagement with the Credit Union sector on proposals for credit unions to provide funding for the provision of social housing, the Central Bank undertook a review of the relevant investment framework in 2017.
On foot of this review, revised Regulations commenced on 1 March 2018. These revised Regulations included the addition of investments in Tier 3 Approved Housing Bodies (AHBs), as a permitted investment class for credit unions. Accordingly, since 1 March 2018, credit unions are permitted to provide funding, through a regulated investment vehicle, to Tier 3 AHBs for the provision of social housing.
In mid-September 2021, it was announced that two credit union backed funds had received regulatory approval from the Central Bank to lend to AHBs for the purposes of delivering social and affordable housing. These are the Credit Union Approved Housing Body Fund and the Credit Union Development Association (CUDA) backed Approved Housing Body Fund.
In parallel, my Department referred the Credit Union representative bodies to the Irish Council for Social Housing (ICSH) with a view to both sectors sharing, as far as practical, the benefits of their respective work in this area, including the work undertaken by the ICSH on the development of special purpose vehicles for social housing financing purposes. The work of the ICSH was supported by grant funding from my Department.
The ICSH, along with six Tier 3 AHBs, have worked with specialist financial advisors to establish a funding mechanism or vehicle which would identify suitable sources of non-state finance to fund the delivery of social housing by AHBs, based on best value for money. Market testing undertaken revealed good interest in lending to the AHB sector from various lenders including banks, institutional investors and the Credit Union sector. So far, one AHB has set up an SPV and several AHBs have sourced finance from private institutions. As such, the work in this area is ongoing and has led to individual AHBs establishing SPVs for financing social housing.
The Credit Union sector is one potential funder whose terms are assessed as part of the process of market testing to establish best value for money and optimum terms and conditions from lenders. While my Department will continue to be available to provide any clarifications that may be required in relation to the delivery of social and affordable housing, it falls to the relevant parties, i.e. the AHBs, on the one hand, and potential investors on the other, to agree a workable and mutually acceptable approach in order to bring potential investment possibilities to a successful conclusion.