Mortgage-to-rent deal to help 9,000 Irish homeowners
Mortgage-to-rent company Home for Life has raised €75m and plans to complete 1,500 deals with banks and so-called vulture funds next year to keep indebted Irish householders in their homes.
The funding, which has been secured from London asset manager LCM Partners, will allow Home for Life to raise up to €160m more through an existing deal with AIB.
The new funding will be used to facilitate mortgage-to-rent deals with banks and funds for homeowners facing potential repossession due to serious arrears difficulties.
Under such deals an approved housing body can purchase the home and set up a long term social housing style lease with a local authority to clear the debt and allow families to remain in their home.
Home for Life is currently the only private company which is approved to facilitate such deals.
Home for Life chief executive Paul Cunningham said that of the 27,000 Irish homeowners who are in long term arrears, amounting to €2.4bn of debt, 9,000 are suitable for mortgage-to-rent.
"Our aim is to facilitate as many of these as we can with a mortgage-to-rent solution so that they avoid the court process, which does not work," he commented.
Home for Life is currently working with 460 homeowners at various stages of the mortgage-to-rent process, but to date has only completed six deals.
However, he said that the new fundraising deal, which was facilitated by Davy Corporate Finance, will allow for a major acceleration in the number of deals that it can bring to fruition.
The company hoped to soon begin completing up to 100 such deals a month.
Mr Cunningham added that the acceleration of mortgage-to-rent as a solution to some of the most difficult arrears cases would be driven by international funds.