The National Asset Management Agency (NAMA) has today extended its residential mortgage 80:20 Deferred Payment Initiative to an additional 180 houses in 12 counties.

The houses included in the new phase are located in the following counties:

Carlow	Clare	Cork	Dublin
Galway	Kerry	Kildare	Kilkenny
Limerick	Meath	Sligo	Wexford

The houses range in size from two-bedroom to five-bedroom with prices starting from €100,000. 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, www.daft.ie and www.myhome.ie.

The Agency is extending the initiative after a positive response from home buyers during the pilot phase, which was launched in May.

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

“This initiative is still at an early stage but it has been favourably received by prospective purchasers. It is aimed at instilling confidence in people that they can buy a home without the immediate worry of falling values and facilitating greater price discovery”.

Mr McDonagh also said the pilot phase achieved its objectives.

 “We have established that concerns over potential falls in house prices remain an issue for buyers. The extension of this initiative will help address these concerns for buyers in 9 more counties, in addition to the 3 included in the pilot phase.”

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.
• It offers potential buyers the ability to own and move into a new home now instead of renting while they wait for the market to stabilise.
• 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 will be 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 qualifying developments

Development Name	Location	Unit Number
Castleoaks, Dublin Road, Carlow	Carlow	21
Churchfields, Clonlara, Co Clare	Clare	14
Tir Cluain, Midleton, Co Cork	Cork	10
Castle Heights, Carrigaline, Cork	Cork	3
Silken Park, Citywest, Dublin 24	Dublin	6
Carrickmines Manor, Glenamuck Road, Dublin 18	Dublin	6
Pairc na Ri, Athenry, Co Galway	Galway	18
Oakfield, Park Road, Killarney, Co. Kerry	Kerry	6
Cluain Bhearu, Athy, Co Kildare	Kildare	4
The Weir, Castlecomer Road, Kilkenny	Kilkenny	10
Castlerock, Castleconnell, Limerick	Limerick	20
Silverstream, Stamullen, Co Meath	Meath	15
Fitzherbert Wood, Slane Road, Navan,  Co Meath	Meath	5
Ardfinn, Strandhill Road, Co Sligo	Sligo	16
Elderwood, Castlebridge, Co Wexford	Wexford	26

 Additional units in these developments may be introduced on a phased basis, subject to demand.

Note 2: Sample purchases 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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