Nama’s top bosses have moved to pre-empt criticism of the agency’s new role managing the Government’s latest housebuilding fund, including telling the Irish Independent they’ll work with builders regardless of any previous disputes.
Since 2009 most of the country’s main builders have had some or all of their debt in Nama and in a significant minority of cases relations were strained or broken.
However, asked if builders who had a poor past relationship with Nama will be able to access loans from the new €750m Home Building Finance Ireland (HBFI) fund, Nama CEO Brendan McDonagh insisted they would.
There will be “no restrictions on borrowers if they have a business case” and a “viable proposition”, he said.
“We’ve all been through a lot,” he said.
In relation to criticism by some builders of Nama, the agency’s chairman, Frank Daly, said it went with the job.
“It’s business, it’s not personal,” he said.
The agency faces a legal challenge in relation to its existing role as a lender for housebuilding.
A group of five builders whose loans are not in Nama – New Generation Homes, MKN Properties, David Daly, Paddy McKillen and Michael O’Flynn – complained to EU Competition authorities, claiming use of Nama to fund rival builders amounted to illegal State Aid.
Nama’s existing housebuilding funds have been available since 2014, but only to Nama developers.
However, under plans unveiled by Finance Minister Paschal Donohoe in the Budget, a new vehicle, Home Building Finance Ireland (HBFI), will be funded with €750m from the Ireland Strategic Investment Fund (Isif).
Nama’s staff will manage lending the money to builders, with a target to boost housing supply by 6,000 units.
Both HBFI and Nama loans will be issued on the same terms and conditions.
It’s understood that means interest rates on senior loans of around 8pc, slightly above the level charges by the pillar banks for senior development loans.
Borrowers will have to have equity – typically that means the site itself debt free – with the loans going to fund construction.
Frank Daly rejected claims it lack the skills to drive a ramp up in construction.
“There is a claim that Nama knows nothing about funding and delivery of houses. It’s not true,” he said.
Nama’s in-house team includes engineers, quantity surveyors and planners who have the range of skills needed to drive house building, he said.
Agency chiefs said the team there is now experienced in build prices, sale prices and fit-out costs and will make “commercial, objective, evaluations” of any proposals made to them.
Nama is expected to sign a service level agreement with HBFI to manage the new fund.
Brendan McDonagh said €750m from Isif will fund construction of as many as 6,000 homes. Funds used for house building can be recycled twice in a two year period, he noted, as houses are built and sold. For Nama, the new role will make it easier to retain staff.
“People who are good will stay on for a few more years,” Mr McDonagh said.
“The Government has recognised that the skill-set here is an asset to the State and put it to use,” Frank Daly said.
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