Mr. Barry O'Leary:

In respect of individuals applying to local authorities, I will not give Deputy Stanley a short answer but I will deny any responsibility in respect of the Housing Finance Agency. As Dr. Norris outlined in her statement, we are basically a shared service for local authorities. We borrow the money cheaply and lend it cheaply. We only lend to local authorities. We do not lend to individuals so I cannot go through the system of how individuals apply to local authorities or how that is underwritten because it is not a function we look after.

The lending guidelines are given to the local authorities by the Department. In terms of dealing with any changes in policy, we do not formulate policy. We just fund the policies the Department has put together in schemes. If the Department was to change a scheme and move it out from a threshold of €25,000 to €40,000, we would fund that, but it would be for the Department to change the policy and implement the scheme. We would then fund it.

As Dr. Norris alluded, we have some dealings with the European Investment Bank and already have some borrowings from it. It has approached us to see if we would be interested in getting more funds. Funding is not a particular difficulty for us at the moment in terms of having funds available. The difficulty with the European Investment Bank is that it only likes to lend for new build situations. It will not re-finance existing borrowings. Our book at the moment is about €4.4 billion and is declining at a rate of about €100 million per year because there is very little housing activity. The natural annuitisation of books allows our book to decline. We are not making many new loans so we have no particular need to draw down from the European Investment Bank as a consequence. It will only give us new money if we carry out new lending. That pretty much addresses the areas about which Deputy Stanley was talking.

In respect of Deputy Murphy's questions about the extent of the funding and the balance between 80% and 20%, there is a provision where approved housing bodies can approach the Department which offers a capital loan facility which will typically lend somewhere between 10% and 30% of a project to the approved housing body. This is completely separate from us. They effectively use that borrowing, which is on a long-term basis with the interest rolled up until the end of the project, for the equity to cover the other 20%.

In terms of shared ownership and whether we feel there is any difficulty for the Housing Finance Agency, I would say "No" at this stage. This is not to ignore any of the difficulties that exist with shared ownership. It goes back to the relationship the Housing Finance Agency has. It lends to local authorities and local authorities are in a position where they will always pay us back. The very real problem exists at the local authority to individual borrower level. My understanding is that a review group in the Department is looking at shared ownership and is hoping to bring some recommendations to the Minister before Christmas. We are satisfied that the Housing Finance Agency's book is quite secure.