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80/20 Deferred Payment Initiative

NAMA launched its DPI in May 2012. The initiative aimed to provide home buyers with a level of protection against a fall in residential property prices over the initial five years of a mortgage. The initiative was launched in conjunction with Bank of Ireland, EBS and Permanent TSB and extended to over 400 residential properties under the control of NAMA debtors or receivers. Under the initiative, the home buyer paid 80% of the property’s value upfront, with the remaining amount (up to 20% of the property’s value) to be paid in five years by the mortgage provider (on behalf of the home buyer) directly to NAMA depending on the value of the property at that time.

The residential properties included in the initiative were released on a phased basis from May 2012 to June 2013. The properties, predominantly three and four bedroom semi-detached houses are located in 33 developments in 13 counties across Ireland.

 In January 2014 NAMA announced that the 80:20 Deferred Payment Initiative would close to new entrants with effect from 31 May 2014. This decision was made on the basis that the initiative had achieved its objective of generating sales activity and facilitating greater price discovery, with feedback from purchasers indicating that fear of falling house prices was no longer a significant factor.

Purchasers who already bought houses in the scheme, together with those who contracted to buy a qualifying property before the end of May 2014, continue to benefit from the initiative.

In total, 67% of the properties included in the initiative since its inception have been sold. By June 2014, this amounted to the sale of 278 properties with a total sales value of €55.5m. Of those transactions, approximately 40% of the purchasers had availed of the initiative through one of the participating mortgage providers.

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