Mr. Barry O'Leary:

I will condense our opening statement as well. The committee already has it, so reading it word for word might not improve our lives. I thank the committee for the invitation. I am accompanied by my colleagues, Mr. Seán Cremen and Mr. Tom Conroy. The HFA's mission is to facilitate the successful delivery of social and affordable housing in Ireland. We do this by providing long-term competitive finance to the sector to support the schemes introduced by the Department of Housing, Local Government and Heritage. We were initially established in 1982 to provide housing finance to local authorities. Our remit has expanded since then to include lending to AHBs for social and affordable housing. Since 2019, we have also been lending to higher education institutions, HEIs, for the development of student accommodation.

Our outstanding loan book, as of 31 December 2021, was €5.9 billion. We are a self-financing organisation and we do not receive any subvention from the Exchequer. The board of the HFA is appointed by the Minister for Housing, Local Government and Heritage, with the consent of the Minister for Public Expenditure and Reform. It normally consists of 12 members, including a serving local authority chief executive, and representatives of the private and public sectors.

Turning to our lending, most of our loan book consists of lending to local authorities. Some €3.33 billion of our total of €5.9 billion in lending is to local authorities, while €2.42 billion is lent to approved housing bodies. That is a representation of the fact that we have spent most of our 40 years of existence lending to local authorities. The new strategy we brought out this year, Strategy HFA 2026, forecasts that we will lend a further €1.45 billion to local authorities over the next five years. It will be to fund things like the local authority home loans scheme and the retrofitting scheme for the housing stock of local authorities and AHBs.

We began our lending to approved housing bodies in 2012. Until then, the Government largely grant-funded housing bodies for social housing through local authorities. However, budgetary constraints then led to the introduction of loan finance, which is supported by the Government's capital advanced leasing scheme, CALF. The HFA has since adapted its own processes to quickly become the largest provider of loan finance for the sector. To date, the HFA has approved 19 AHBs for certified body status, which is the status we confer on them when we are prepared to lend to them. Over the past five years, we have approved lending of €3.6 billion, which will allow for the provision of 17,350 homes.

The drawing down of funds obviously lags the approval of loans. Typically, depending on whether loans are for the purchase of turnkey properties or for building and construction, the time between approval and drawdown can range anywhere between 12 and 30 months, but it stretched a bit during the pandemic. Moving to advances, we have advanced €2.3 billion to approved housing bodies in the past five years and that covers the provision of about 10,000 homes. Therefore, we have a situation where loan advances are being made after the approvals, but we have a strong pipeline of approvals, which means we are happy that a lot of activity is going to happen in the next two years.

On cost rental, that scheme was launched by the Department in early 2021 and there have since been two calls for proposals from AHBs. The HFA was happy to fund applications for these. In 2021, we approved €93 million for cost rental homes, which will see the delivery of 390 homes this year. Since the beginning of this year, we have approved a further nine applications amounting to €108 million, which will deliver 454 homes. All applications are for turnkey units and the expected delivery is quite quick. It will be at the lower end of the range I spoke of. The HFA has an appetite to provide more finance for cost rental schemes. Our Strategy HFA 2026 estimates about €850 million in funding, so we will be keen to support this area. It is clearly something for which there is good demand. It is delivering rents at a reduced rate compared with the market and we are keen to support it.

Regarding lending to higher education institutions, this began for us quite recently. The HFA has been enabled to lend to HEIs at low-cost, long-term fixed rates. The idea is that the provision of student accommodation will free up housing in the wider market, and we are happy to support that endeavour. We have thus far lent €168 million to three universities for the provision of just under 1,500 student bedrooms, and we anticipate several applications this year for this funding.

Turning to our borrowing, we are now authorised to borrow up to €10 billion. We borrow this money through a guaranteed notes programme from the National Treasury Management Agency, NTMA, and from local authorities. We also borrow money from the European Investment Bank, EIB, and the Council of Europe Development Bank, CEB. The Housing for All strategy introduced by the Government last year allows for the possibility of expanding our borrowing limit to €12 billion, and that would certainly cover the anticipated lending we expect to undertake during our five-year strategy.

In the course of the past year we have signed a number of finance deals with the European Investment Bank and the Council of Europe Development Bank. Just today, we signed a document with the Council of Europe Development Bank for €75 million in a facility that will support the development of student accommodation by the higher education institutions.

On our financial results and prospects for the future, our 2021 accounts are being audited now and we expect to have them cleared and approved by our board on Thursday week. It will be just by the end of March we will have those approved. Those accounts will indicate what we consider an excellent year in 2021. We have loans advanced of €934 million, up 21% on the previous year. The previous year was at a record level. Loan approvals were strong and we see a good pipeline for the prospects into 2022 and 2023, so we are quite happy with that.

In Strategy HFA 2026, we forecast that we will double our loan book by the end of those five years so we will have moved on to approximately €12 billion. We expect that in the course of those five years we will have funded housing that will deliver 19,000 new homes and 3,300 student beds. This basically represents 25% of the entire expenditure that will be made under the Housing for All programme. We are keen to stress that this is the least we expect to do and the HFA certainly anticipates that if more is required of us, we would be capable of delivering more and we would be quite happy that we would have access to the funding for that.

There is a table within the submission to the committee indicating where we see the lending occurring in the next five years, broken down between approved housing bodies, local authorities and higher education institutions. We welcome the opportunity to have this discussion today and we look forward to the committee's questions.