How will the Housing Australia Future Fund work?

Put simply, the federal government is giving $10 billion to the Housing Australia Future Fund (HAFF) which will provide money with the ambitious aim to deliver 20,000 new social and 10,000 affordable homes over 5 years.

A minimum of $500 million a year will be handed out by Housing Australia (formerly known as the National Housing Finance and Investment Corporation) in various forms to back approved housing developments.

While the details of how this will all work are being finalised, the investment mandate is likely to give flexibility in how it operates, allowing it to hand out money in the form of loans, grants or a combination of both depending on the specifics of each project.

These can include "availability payments", ongoing payments for up to 25 years which are aimed at closing the gap between the cost of projects and the rent received from tenants. This could provide projects with a return that helps to attract institutional investors into what could become a new investment class.

Funding will go to not for profit Community Housing Providers (CHP) who will own and operate the homes. Early indications are that approved projects will receive a combination of an upfront capital grant and an ongoing availability payment.

First applications for funding are due to open in December with funds starting to flow in the second quarter next year. Community Housing Providers already have a substantial number of agreements with developers for projects ready for funding applications.

part attribute Investment Magazine