The National Asset Management Agency will stump up some of the money needed by first-time buyers to buy its apartments in a bid to re-energise the property market.
The NAMA will provide mortgage finance on hundreds of apartments in various parts of Dublin from October as part of a pilot scheme.
If the scheme works, it could be extended to up to 5,000 homes under NAMA’s control.
Chairman of the agency, Frank Daly, has outlined fresh details of plans to give loans to buyers of apartment blocks that it currently owns.
Daly told the Irish Independent that banks were not lending enough to the property market and had gone to the "other end of the spectrum'' after the carefree lending of the boom
NAMA chairman Frank Daly said that, following talks with AIB and Bank of Ireland, it had come up with a deferred payment scheme, which would link payment to the value after five years of any NAMA property bought.
The bank is going to offer the buyers the chance to avoid negative equity by offering the property at a discount. If the value of the property rises to a pre-set level five years after the purchase then the borrower would pay this back over time, but if the property falls in value then the buyer will not have to make up the difference.
Under the scheme, a purchaser would seek a mortgage of €180,000 and pay a deposit of €20,000 on a property linked to a NAMA loan for sale for €200,000.
NAMA then agrees to defer the payment of 20% of the current value of the property, in this case €40,000. Should the property be worth €200,000 or more after five years the buyer's repayments will continue to cover the €40,000.
If after five years the property has fallen in value - to, for example, €160,000 - NAMA waives the outstanding €40,000 from the 2011 purchase price. The purchaser will then have to pay back just €140,000 of the original €180,000 loan.
The scheme will be launched on a pilot basis this autumn, and should apply to 12,000 individual residential units.
