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.
What are the changes in relation to forgiving suspensory loans and conditional grants?
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.
When do the changes take effect?
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.
What are the eligibility criteria and how do organisations apply?
To be eligible, organisations need to already have received financial assistance through the Housing Innovation Fund.
For more information, email firstname.lastname@example.org.
Who is responsible for determining who is eligible?
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,
Note that the decision to change any arrangement rests with Housing New Zealand.
What is the priority amount?
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.
Can term loans be forgiven?
No. Term loans are not included in the changes.
Are there any tax implications if my application is successful?
If your application is successful, your organisation may incur GST liability for housing development sooner than you had initially anticipated.