HBFI loan approvals rise 25% to €3.3bn as SME builders drive housing delivery
State-backed lender supports more than 16,500 homes nationwide with strong focus on smaller builders and equity-constrained projects
28 January 2026 | 📧 editor@ipropertyradio.com
Home Building Finance Ireland (HBFI) increased total loan approvals by 25% in 2025 to €3.323 billion, underlining the growing role of State-backed finance in supporting housing delivery as private development finance remains constrained.
According to HBFI’s year-end update, funding has now been approved for 16,558 homes across 233 developments in 25 counties. Of these, 13,246 homes are either under construction or completed, with €2.45 billion of approved facilities already drawn down, representing 74% of total approvals.
The figures highlight continued strong demand from small and medium-sized homebuilders. More than four in five approvals, 82%, were for loans of €20 million or less, while 67% of schemes involved developments of fewer than 50 homes. Individual loan facilities ranged from €1 million to €113 million, with an average facility size of €14.3 million and an average term of 23 months.
HBFI’s role in addressing equity gaps in the market is also evident. Some 87% of loans approved to date were provided at a loan-to-cost ratio of 65% or higher, indicating a strong focus on builders unable to meet higher equity requirements from traditional lenders. Interest margins for core products averaged 6.33% in 2025.
The composition of homes supported shows a broad tenure mix. Half of all HBFI-funded homes are for owner-occupiers, while 43% are for social and affordable housing, including Part V obligations. The private rental sector accounted for 7% of units. Overall, 67% of homes approved were houses and 33% apartments, reflecting the continued dominance of low- to medium-density schemes in the pipeline.
Sales activity on HBFI-backed schemes has progressed steadily. By the end of December 2025, 6,812 homes had been sold, with a further 4,099 either sale agreed or contracted. HBFI notes that a typical lag of three to six months exists between loan approval and first drawdown, reflecting planning, mobilisation and construction timelines..
The Tánaiste and Minister for Finance, Simon Harris TD, said the results demonstrate how State-backed finance can support increased housing supply, particularly among SME builders. He also confirmed that a new €200 million funding facility will further strengthen HBFI’s capacity as the Government implements its Delivering Homes, Building Communities housing plan.
HBFI chief executive Dara Deering said demand for the lender’s products remains strong, with a particular emphasis on smaller builders and equity-constrained projects. She said the organisation’s pipeline for 2026 is robust, with ambitions to drive additional housing supply nationwide.
During the second half of 2025, HBFI increased its overall lending capacity by 27% following the addition of a €200 million facility from Danske Bank. This marked the first time the lender accessed market funding to complement its original €730 million credit line from the Ireland Strategic Investment Fund. HBFI said it continues to recycle repaid loans to fund new projects, amplifying its overall impact on housing delivery.
Established in 2019, HBFI operates on a commercial basis and is wholly owned by the Minister for Finance. A statutory review published in July 2025 concluded that the lender’s continued operation remains necessary given prevailing market conditions.
