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 (TrancheA)	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

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