The financial agreement offers a new form of funding for social housing. Circle Voluntary Housing Association (VHA) has agreed a €51m (£43m) investment package to provide social and affordable housing for families across the country.
Circle VHA said that the deal is now the largest private financing package of any approved housing body in the country, and it hopes that the initial 250 properties are the first of many thousands to be developed in the coming years in areas such as Greater Dublin, Cork, Limerick and Galway.
The housing will be managed by Circle VHA and funded by AIB, with advisory services by Centrus.
The finance package provides the housing association with a three-part loan over a 30-year period. It includes a revolving credit facility, a term loan and a working capital facility. The nature of the agreed package allows Circle VHA to reuse the borrowed funds at any time over the period of the loan, which it said provides a safeguard for ongoing speedy development of social housing.
John Hannigan, CEO of Circle VHA, said: “We are absolutely delighted with this historic agreement which has ultimately safeguarded our passage to delivering over 250 homes for social housing across the country in a mere matter of months. This innovative public-private partnership approach is what is needed to solve the housing crisis and now with our 30-year agreement and our existing structures, we estimate we will be able to bring approximately 300 social houses to the market each year.
“This finance solution was a result of combined-thinking and collaboration between Centrus, AIB and ourselves. What we have achieved is a modern approach to financing that has never been accomplished in this sector before. It is a sustainable model which will benefit thousands of families over the course of many years due to the revolving nature of the credit, allowing us to expand and provide additional homes on an ongoing basis.”
Centrus CEO Jason Murphy added: “We are delighted to have been involved in this ground-breaking agreement which will help many families across Ireland. Transactions like this provide sustainable solutions to deliver much needed additional social housing to the market.”