The CU AHB Fund is a fund established by credit unions and available to all credit unions for participation. It allows credit unions to put their members’ saving to a productive important national initiative. The CU AHB Fund provides Approved Housing Bodies with a new competitive lending partner that is aligned with their own values and objectives.
Similar to a credit union all surplus generated by the CU AHB Fund after paying of expenses will be available for the benefit of investing credit unions in the form of dividends.
Who can get involved?
The Fund has been approved to invest in Tier 3 Approved Housing Bodies (AHBs). Tier 3 AHBs are the larger AHBs in the country and they own, manage and lease over 80% of total homes in this sector. Having access to the CU AHB Fund will give AHBs greater scope to provide homes for all family make-ups. Every credit union will now through this collaborative approach have the opportunity to play a key role in providing social and affordable homes directly within their common bond.
Credit Union Permitted Investments
The investment by credit unions in a regulated investment vehicle such as the CU AHB Fund where the underlying investments are investment in Tier 3 Approved Housing Bodies is a permitted investment under Credit Union Regulations introduced by the Central Bank of Ireland in March 2018. Under these regulations and data released by the Central Bank in September 2021 over €800 million can be made available by credit unions to invest in AHBs.
|Credit Unions with assets over €100 million
|Credit Unions with assets under €100 million
|All Credit Unions
|No. of Credit Unions
|50% of Regulatory Reserves
|25% of Regulatory Reserves
|Capacity to invest in CU AHB Fund
Investment Objective & Policy
The objective of the CU AHB Fund is to achieve moderate, risk-adjusted income over the term of the fund.
The policy is to advance loans to Tier 3 Approved Housing Bodies (“AHBs”) in respect of residential homes used to carry out the designated social mandate of such AHBs, including social, affordable and special needs facilities. Focus will primarily be on medium to long term loans (maximum 25 years duration) with security over the target property and the rental accounts backed by Payment and Availability Agreements issued in line with the Department of Housing, Local Government and Heritage’s Social Housing Current Expenditure Programme (‘SHCEP’).
Payment and Availability (P&A) Agreements are standardised contractual agreements that form the basis of arrangements between a Local Authority (LA) and an AHB for the purposes of the AHB making the homes available for social housing support. Basic principles are:
- AHB makes its properties available for letting to nominees (i.e. tenants) of the LA
- AHB agrees to keep the properties in good condition
- LA identifies tenants and decides rent to be paid by tenant to AHB
- Rent is index-linked and is reviewed every 3 years
- LA makes payments to AHB on a regular basis - generally paid quarterly in advance
- Length of the lease is typically the same length as the P&A Agreement
- The Department of Housing, Local Government and Heritage reimburses the LA under SHCEP.
As part of the loan arrangement a Continuation Agreement will be signed. This will be a contract between the CU AHB Fund , the AHB and the LA. It is a mechanism to connect the LA to the CU AHB Fund and which provides for the continuation of payments by the LA if the AHB defaults on its loan or is subject to a winding up.
WARNING: The value of your investment may go down as well as up. You may get back less than you invest.