Funding Affordable Homes secures debt refinancing in plan to triple output

Funding Affordable Homes (FAH) has secured debt refinancing to enable it to triple its portfolio of affordable homes across the UK.

FAH, which specialises in the acquisition and development of affordable housing, has a portfolio of 768 homes across 10 developments, housing up to 1,300 people across the UK.

It has secured a £56m debt refinancing of this portfolio, valued at £135m, from a European bank, the name of which has not been disclosed. The 20-year refinancing will reduce its interest payments by more than half.

The fund manager said it aims to use this leverage to deliver up to 3,000 new affordable homes.

Real estate and investment adviser, Edmond de Rothschild Real Estate Investment Management (EdR REIM), aims to grow the value of the portfolio to more than £500m.

The £56m debt refinancing with a European Bank replaces nine existing facilities with three lenders, including Barclays. 

Fund manager for FAH, Adrian D’Enrico described the refinancing as a “significant milestone”.

“Our current facilities were simply becoming too expensive, and we were looking for a more stable solution,” he said.

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“This 20-year facilities with a European bank, which is inflation linked, will reduce the cost of servicing our debt. It really reflects the increasing appetite from the banking and investor universe for affordable housing as an asset class. 

He added: “We now aim to raise further equity capital to enable the development of our significant pipeline of opportunities, which will deliver much-needed homes across the UK.”

FAH was launched in November 2022 with a £30m commitment from Strathclyde Pension Fund. It typically provides forward funding to enable new properties to be built and managed by established registered housing providers. 

FAH also has its own housing association, Funding Affordable Homes Housing Association (FAHHA).