The Government introduced the Housing Innovation Fund (HIF) in 2003 to support the growth of third sector social housing in New Zealand. Through HIF, third sector social housing providers were able to receive suspensory loans or conditional grants for the purposes of building social housing.
In 2010, as part of the wider social housing reform programme changes, the Government transferred responsibility for social housing funding to the Social Housing Unit and stopped issuing new HIF loans.
Although new loans are no longer being issued through the Housing Innovation Fund, the Government has introduced changes that will enable existing recipients of HIF funding the opportunity to have their suspensory loans or conditional grants forgiven, for the purposes of building new social housing.
The changes also allow Housing New Zealand to reduce the security (priority) amount relating to suspensory loans and conditional grants issued through the Housing Innovation Fund.
The changes aim to remove some of the financial barriers faced by social housing providers, by freeing up capital available to finance new social housing projects.
To be eligible, organisations need to already have received financial assistance through the Housing Innovation Fund. In addition, the organisation must:
- have completed all projects funded through the Housing Innovation Fund
- continue to supply social and affordable housing and undertake to utilise the freed-up capital to develop new social and affordable housing
- be a not-for-profit social housing provider and not a local authority
- have social housing growth plans and have social housing as a core part of its business
- be financially viable (measured by return on equity), have strong governance and have a proven track record in the provision of social or affordable housing
- demonstrate that in exchange for altering security arrangements, the Crown will receive value for money.
The security amount (also referred to as a “priority amount”) is 1.2 times the value of the original suspensory loan amount. This could be reduced down to 1.2 times the outstanding loan balance.
Housing New Zealand is responsible for administering these changes, processing applications and assessing eligibility. Housing New Zealand will consider applications on a case by case basis and, as it bears the risk, has the final say in altering HIF security arrangements,
Please note that the decision to change any arrangement rests with Housing New Zealand.
No. Term loans are not included in the changes.
If your application is successful, your organisation may incur GST liability for housing development sooner than you had initially anticipated.
Organisations can begin the process of preparing an application form now. Any change to suspensory loan or conditional grants conditions will take effect from the date of settlement for a project that the freed capital will be applied to.
An application form can be found here.
For more information, email email@example.com.