Housing Finance Agency pumps €304m in approved housing bodies

Approved housing bodies (AHBs) have drawn down €304m from the State’s Housing Finance Agency (HFA) since the start of the year.

The HFA provides loan finance to local authorities, approved housing bodies and higher education institutions in Ireland to boost the delivery of housing.

Around €1.2bn of loan finance was provided to these groups last year, with by far the most lending to AHBs which got €853m, up from €709m the prior year.

Around 3,353 new social and affordable homes were delivered with financing from the HFA last year.

Around 2,889 social homes and 464 cost rental homes were completed across the year.

The majority of these were located in Dublin, with 966 homes completed last year. This was followed by 467 in Cork and 408 in Kildare.

Just three homes were completed in Longford, while 20 were delivered in Mayo in 2022.

“We are obviously aware of the high cost of funding,” Housing Minister Darragh O’Brien said, pointing to a “volatile” interest rate environment.

“HFA have a very competitive edge in that space, particularly for our local authorities,” he said. “If you’re looking at right now, it’ll be about 2.45pc to 30 years.

“That will be subject to change,” he added. “If someone locks down and draws down now, that’s locked in for that period.”

The minister added that the agency wants to see more local authorities opt for cost rental homes because of the ability to borrow at a “keener rate”.

“We can make sure that their rent that’s actually struck is lower and is competitive,” he said.

Mr O’Brien now expects the number of completions of these homes to exceed targets this year, with 19,000 social homes in the pipeline at various stages of construction.

The targeted number of new homes to be completed by 2026 is also around 19,000, This goal was first announced in the agency’s strategy published in December 2021.

“One of the trickiest places is Dublin city to deliver social homes at a scale that is actually needed because a lot of the development is brownfield site type development,” he said. “They don’t have a massive land bank or an encumbered sort of land banks.

“That’s an area where we need the four Dublin [authorities] working together, which we’re doing.”

Chief executive of the agency Barry O’Leary says he expects loan approvals for new developments to grow this year.

“To get €1.2bn of drawdowns, you need to do lots of loan approvals,” he said. “We hope to do a lot more loan approvals, our loan approvals for this year are ahead of last year.

“It takes somewhere between 12 and 13 months depending on the type of product which would dictate the lag between approval and drawdown,” Mr O’Leary said.

Costs associated with projects approved by the agency rose by between 4pc and 8pc last year.

“The department did step up and give additional CALF [capital advance leasing facility] to the borrowers to facilitate that,” he said.