A new CU AHB (Credit Union Approved Housing Body Fund), launched today, will oversee up to € 800 million of investments in social and affordable housing, with an initial investment of € 200 million over the course of the next 12 months.
This fully licensed and regulated fund is a unique collaboration between credit unions and Tier 3 AHBs and paves the way for credit unions nationwide to invest in Tier 3 AHBs. The announcement was widely welcomed. for its collaborative approach to helping resolve the housing crisis. The planned initial investment of 200 million euros by credit unions will allow the delivery of more than 1,000 homes, with the Fund finally being approved for an investment of up to 800 million euros in the medium and long term.
The Fund’s donors have been engaging in the regulatory process with the Central Bank since early 2020 to obtain final authorization. The CU AHB fund is a separate regulated entity which has been established as a sub-fund of Multaque Funds ICAV (an Irish collective asset vehicle) which, subject to regulation, will allow the establishment of other similar funds of credit unions . This will allow credit unions across the country to play a greater role in solving the housing crisis in the country, a specific goal of the Fund’s donors.
The Fund was created with the support of four credit unions: Core, Dubco, Heritage and Progressive and is open to all credit unions in the country to invest. Donal Coghlan will serve as a director of the Fund and will be joined on the board by the Chairman, Brian Murphy and Patrick O’Sullivan. Coghlan has played a leading role in restructuring the credit union industry, as CEO of the Credit Union Restructuring Board.
CU AHB Fund President Brian Murphy said: “The value to society of launching the CU AHB Fund, which brings together two pillar institutions of local communities, to support government efforts to address the national housing crisis. , is huge. The government has pledged to provide 90,000 social housing units by 2030, which will require innovative financing and housing solutions. Deploying some of the Credit Union’s huge excess liquidity is one such solution and a new source of housing finance. This investment fund is an exciting partnership between the credit union sector, trusted institutions embedded in every community across the country, and Tier 3 approved housing organizations, which will provide long-term funding to enable AHBs to provide housing that the local communities badly need ”.
The Fund will provide loans to AHBs as part of their designated mandate to provide social, affordable and appropriate housing.
Loans can be issued up to a maximum term of 25 years and will be secured by assets guaranteed by the government for repayments
To date, the House Finance Agency has provided up to 80% of the funding needed for AHBs.
The CU AHB fund is authorized by the Central Bank of Ireland as an original loan fund and is a sub-fund of Multaque Funds ICAV, an Irish collective asset vehicle. The Fund has an independent Board of Directors which has the ultimate responsibility for overseeing and ensuring that the Fund is operated in accordance with applicable legal and regulatory requirements.
Donal Coghlan, Director of the CU AHB Fund, said: “The CU AHB Fund will play a vital and tangible role in providing social housing to the Irish. We have been working very hard behind the scenes to ensure rapid deployment of investments once we have received the green light from the Central Bank. So today is an exciting day for us and for the Irish credit union movement ”.
“Everyone benefits from this new CU AHB fund. It was set up by credit unions for all credit unions. Licensed housing organizations now have a new, competitive lending partner aligned with their own values and goals, while credit unions can invest their members’ money in an important and productive local initiative. It also frees up significant government resources to carry out other essential projects, while providing much-needed housing. It is basically the cooperative model operating at the highest level with ordinary people coming together and helping each other.
Although the CU AHB Fund is permitted to invest in the construction and / or purchase of new portfolios, the initial focus is on purchasing completed developments in order to ensure prompt delivery and avoid constraints or delays in planning or the availability of labor and materials.
Minister of State for Credit Unions Sean Fleming said: “I would like to commend the credit unions involved in establishing a fund authorized by the Central Bank to invest in licensed housing organizations. Since I became Minister, it has been a personal priority of mine to facilitate the investment of credit unions in large-scale social housing projects. This is a very important step for the sector. This new fund will help support the implementation of our Housing for All action plan, which is the largest state-led construction program in Irish history. Progress by the Credit Union Approved Housing Body Fund and other companies should inspire further collaborative efforts. In the coming months, I will present new policy proposals to help develop and support credit unions. “
Camille Loftus, Executive Director of Housing Alliance, says: “The Housing Alliance is a collaboration between six of the largest licensed housing organizations in Ireland, providing around four out of ten social housing units currently under construction across the country. The Housing Alliance welcomes the advent of a new source of development finance for badly needed social housing. Many Housing Alliance residents are members of Credit Union, and this initiative highlights a core value of both: harnessing our collective resources to build vibrant and resilient communities.
Level 3 AHBs are larger accredited housing organizations, with over 300 housing units on their books and are granted status approved by the Department of Housing, Planning and Local Government under section 6 of the Housing (Miscellaneous Provisions) Act 1992 (the “Housing Act”). There are currently 23 AHB Level 3 registered.