80/20 Deferred Payment Initiative

NAMA has launched a Deferred Payment Initiative (the ‘Initiative’). The Initiative aims to provide home buyers with a level of protection against a fall in residential property prices from current levels over the next five years. The initiative is available to owner-occupiers who wish to buy a new home.

Key Features

• The initiative offers the home buyer 20% protection from the risk of further house price declines for the first five years of the mortgage.
• The home buyer must first obtain mortgage approval for the full mortgage amount (up to a maximum 90% of the purchase price) from an approved mortgage provider.
• Home buyers will pay 80% of the property’s value upfront. The remaining amount (up to 20% of the property’s value) will be paid in five years by the mortgage provider (on behalf of the home buyer) directly to NAMA. This will be calculated based on an independent assessment of the property’s value at that time. Please see example at the end of the page.
• Three mortgage providers have been approved for participation in the pilot; Bank of Ireland, Allied Irish Bank through its mortgage subsidiary EBS and Permanent TSB.
• NAMA does not own the properties for sale and is not providing mortgage finance in respect of the Initiative.
• Click here to download the Brochure on the 80/20 Deferred Payment Initiative.

Available Properties

• A list of developments that include properties approved for participation in the Initiative can be found here.
• NAMA is not selling the properties directly under the Initiative. The properties included are limited to those being sold by NAMA borrowers.
• Purchase transactions are undertaken in the normal manner, with contracts for sale exchanged between the home buyer and the purchaser.
• The contract for sale will include an annex detailing the rights and obligations of the home buyer, the vendor and NAMA with regard to the Initiative.

Mortgage Structure

• The mortgages used to buy the properties will be provided by existing mortgage providers; Bank of Ireland, AIB through EBS and Permanent TSB.
• The mortgage provider will require home buyers to part-fund their purchase with a deposit of at least 10% of the value of the property.
• The mortgage will be provided in two instalments. The first instalment together with the home buyer deposit, equating to 80% of the purchase price, will be paid at the date of purchase.
• The second instalment, equating to 20% of the purchase price, will be paid in five years by the mortgage provider (on behalf of the home buyer) subject to the value of the property at that point.
• If the value of the property has fallen after five years, the deferred 20% payment will be reduced or cancelled depending on the level of reduction, e.g. a 15% fall in the property value would reduce the deferred payment to 5% of the purchase price.
• The value of the property after five years will be determined by an independent valuer, selected by the buyer from a panel of independent valuers appointed by NAMA.
• Mortgage Enquiries: For further information in relation to the availability of mortgage finance under the Initiative, please contact your local branch of Bank of Ireland, EBS or Permanent TSB.

Example

The sample scenario outlined below assumes that the buyer will contribute 10% equity on a property purchase of €200,000.