Under the pilot incentive scheme that was announced yesterday, the agency said it would guarantee the mortgages of 175 properties in a bid to kickstart the housing market.
If the scheme is successful, it said it could be rolled out to up to 700 properties, including those in the North.
Nama chairman Frank Daly said the initiative was designed to push renters, who were on the verge of buying, over the threshold.
Mr Daly told the Oireachtas joint committee on the implementation of the Good Friday Agreement that he expected to offer the scheme to sell residential properties with protection against price falls “within months”.
Under the scheme, interested parties will be asked to put a 10% deposit on a property. The buyer will then have to qualify for a 90% mortgage.
For the first five years of the mortgage, the buyer will make repayments based on the 90% mortgage.
After five years, the value of the property will be independently assessed. If the value has fallen by anywhere up to 20%, Nama will write that percentage of the mortgage off.
Mr Daly said the scheme will be rolled out to the wider market once it has been shown that it does not impact negatively on the property market.
“Clearance to roll the scheme out will be made if the pilot initiative works and doesn’t have a negative impact on the market.”
The scheme is the latest move by the Government and state agencies to try to re-ignite the moribund property market.
The Government introduced mortgage interest relief at a rate of 25% in the last budget hoping to entice buyers into the market.
Another initiative being driven by Nama to help move the property market is vendor finance.
This would see the agency lending to commercial buyers at competitive rates. Drawing on its own capital reserve, Nama could offer loans to third parties at rates of 2.5% according to its chief executive, Brendan McDonagh.
Mr Daly said a lack of finance and unattractive borrowing conditions were issues in the commercial property market in both the Republic and the North, and that the agency’s decision to offer vendor finance was aimed at helping to address these issues.