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NAMA extends 80/20 Deferred Payment Initiative to an additional 100 units in 4 counties

NAMA extends 80/20 Deferred Payment Initiative to an additional 100 units in 4 counties

NAMA extends 80/20 Deferred Payment Initiative to an additional 100 units in 4 counties

 

The National Asset Management Agency (NAMA) has today launched the third phase of its residential mortgage 80:20 Deferred Payment Initiative, featuring an additional 100 houses and apartments in 4 counties bringing the overall offering to close to 400 properties.

The properties included in the new phase are located in counties Cork, Dublin, Limerick and Wicklow.

They range in size from two-bedroom apartments to five-bedroom houses, with prices ranging from €95,000 to €370,000. A listing of the properties that have been added to the initiative is attached (see note 1).

Further information on properties included in the initiative can be viewed on www.nama.ie.

 

The Agency is extending the initiative after a positive response from home buyers. The initiative has resulted in 120 houses being sold, generating sales proceeds of €22 million, since it was launched last year.

Commenting on the extension of the 80:20 Initiative, NAMA Chief Executive Brendan McDonagh said:

"This initiative has made good steady progress, generating sales proceeds of €22 million to pay down debts owed to NAMA. It has also been good for families, couples and individuals seeking to buy a home with an element of protection from falling values".

Mr McDonagh also said the success of the initiative to date means it makes sense to extend it to more properties.

"While CSO figures suggest residential property prices appear to be stabilising, protection against falling values continues to be an attractive feature for prospective buyers".

 

Key Features of the 80:20 Initiative:

  • NAMA does not own the properties and is not itself issuing the mortgages.
  • This is a targeted initiative aimed solely at potential home buyers who may have a concern that house prices may fall further and are consequently postponing their purchase.
  • The product will protect buyers from decreases of up to 20% in the value of their property over the next five years.
  • Three banks – Bank of Ireland, AIB [through its subsidiary EBS] and permanent tsb bank – are participating in the initiative. Buyers should approach these banks to obtain a mortgage, which will be subject to typical lending criteria.
  • 80% of the agreed sale price of the property is paid upfront. The remaining 20% will only be due in five years' time. How much, if any, of that 20% is then due will be calculated on the basis of an independent assessment of the property's value at that point (see note 2).
  • As normal, each of the three lenders will require buyers to part-fund their purchase with a deposit of at least 10% of the value of the house.
  • A key benefit for buyers is that, for the first five years, their repayments can be calculated based on a mortgage that includes the deferred payment element. If the price of their house falls over the five years and they may not be liable for the deferred payment element, they will have, in effect, been accelerating their mortgage repayment and achieving considerable savings on the interest accruing on their mortgage.
  • This is a targeted, limited initiative supported by NAMA.
  • The initiative is not aimed at buyers who cannot get a mortgage or at investors.

 

Note 1: List of units added to the scheme in the third phase

Development Name

Location

Unit Number

Cooper’s Grange, Old Quarter, Ballincollig

Co Cork

7

Belfield Abbey, Boreenmanna Road, Ballinlough

Co Cork

12

Woodborough, Tower

Co Cork

6

Cooline, Cobh

Co Cork

4

Bridgefield, Curraheen Road, Bishoptown

Cork

11

Carrickmines Manor, Glenamuck Road

Dublin 18

10

Goldenridge, Rush

Co Dublin

18

Castlerock, Castleconnell

Co Limerick

21

Aughrim Hall, Aughrim

Co Wicklow

11

Additional units may be added, subject to demand

Note 2: Sample purchase using the Deferred Payment Initiative

 

Based on a property currently valued at €200,000 and a buyer with a €20,000 (10%) cash deposit:

Today

       

Property Purchase Price

200,000

     

Financed By:

       

70% Mortgage (Tranche A)

140,000

     

10% Purchaser Deposit

20,000

     

20% Deferred Payment

40,000

     
         

Year 5 

Value  Unchanged

Value  Down 20%

Value  Down 10%

Value Up 10%

Property Valuation

200,000

160,000

180,000

220,000

Change in Value

0

(40,000)

(20,000)

20,000

Financed By:

       

Existing 70% Mortgage

140,000

140,000

140,000

140,000

Existing Purchaser Deposit

20,000

20,000

20,000

20,000

Deferred Mortgage (Tranche B)

40,000

0

20,000

40,000

Cost to buyer

200,000

160,000

180,000

200,000

 

Source : Nama.ie 14 March 2013

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Tuesday, 20 April 2021

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