Business Irish

Monday 17 December 2018

Apartment owners to secure cheap loans for remedial works from HBFI

 

Minister for Finance Paschal Donohoe
Minister for Finance Paschal Donohoe

Michael Cogley

Apartment owners will be able to secure cheap loans from the Government's new low-interest development fund to pay to have latent defects in their buildings fixed.

The legislation behind House Building Finance Ireland (HBFI), which was announced by Finance Minister Paschal Donohoe in last year's budget, was passed through both the Dail and Seanad last week. The €750m fund was originally touted as a mechanism for small builders to access cheap finance. A spokesman for the Department of Finance said that there was "nothing stopping" apartment owners or management companies from applying for loans from HBFI, which will operate under similar conditions to the National Asset Management Agency (Nama).

David Rouse, the head of the Apartment Owners' Network, welcomed the news that owners could apply for loans from the new body, but insisted that it would be "put to the test" when the first application was made.

Housing policy lecturer at the Dublin Institute of Technology Lorcan Sirr said that management companies were "nowhere near" capitalised enough to deal with remedial works that need to be carried out.

The legislation outlines that HBFI will lend money for "residential development" provided it is on commercial terms. In its decision-making the new fund must also contribute to the economic and social development of the state as well as improve the country's competitiveness.

Donohoe is set to appoint up to 11 people to the board of HBFI, while the National Treasury Management Agency is likely to provide staff to the new entity. It is understood that HBFI will be headquartered in the NTMA's new premises on the northside of the Dublin Docklands.

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