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The National Housing Finance and Investment Corporation (NHFIC) has provided a concessional low-cost loan of $72 million to HousingFirst, a Victoria-based community housing provider (CHP).
Supplied via the housing body’s Affordable Housing Bond Aggregator (AHBA), the latest loan – the largest issued by the AHBA – will be used by HousingFirst, along with another local CHP, Port Phillip Housing Trust, for the joint development of more than 270 affordable dwellings in Melbourne.
According to HousingFirst, $68 million of the NHFIC funding facility will be used to build 168 brand-new homes across Melbourne, to provide appropriate housing for people waiting on the Victorian Housing Register.
Further, the loan will reportedly allow HousingFirst to refinance its existing debt on 167 existing dwellings, providing the CHP with anticipated savings of $10.7 million.
These savings will be reinvested into new social and affordable housing, as well as wraparound services for tenants, including careers programs, mental health services, and financial and living skills, according to HousingFirst.
The loan will also provide Port Phillip Housing Trust with access to $4 million in loaned funds, in order to build 50 new affordable dwellings in Port Phillip, a region that is said to be particularly struggling to keep up with demand for suitable housing for vulnerable people.
The loan was received as part of the AHBA’s second bond issuance of $315 million, which was launched last month.
According to the office of the Minister for Housing and Assistant Treasurer Michael Sukkar, the latest loan brings the total amount of loaned funds provided to Victorian CHPs to more than $192 million.
Further, it means that the NHFIC has now facilitated a total of $900 million in low-interest secured funding to affordable housing providers across the nation to date.
The money has been used for the financing of 1,000 newly constructed and 3,700 existing affordable homes.
HousingFirst chair Frank O’Connor welcomed the funding from the NHFIC as a breakthrough in the recognition of the vital role that community housing providers play in resolving the crisis of affordable accommodation for low-income and vulnerable people in Australia.
“By allowing us to borrow funds at an affordable rate, and significantly reduce our interest payments, this initiative will allow our organisation to direct our financial resources to where it is needed most – increasing safe and affordable housing supply for people in desperate need in Victoria,” Mr O’Connor said.
HousingFirst CEO Haleh Homaei stated that it is “wonderful” that social and affordable housing is now being seen as a viable investment proposition by both public and private investors.
“It is a sound investment in the future housing infrastructure of our country,” Ms Homaei said.
[Related: NHFIC launches $315m bond issue]