Housing Finance and Investment Corporation takes shape
Draft legislation for the establishment of the National Housing Finance and Investment Corporation (NHFIC) has been released, and a draft Investment Mandate is currently open for public consultation.
The draft legislation and investment mandate set the administrative framework for the Federal Government's Reducing Pressure on Housing Affordability plan announced in the 2017-18 Budget.
The NHFIC will administer a $1 billion National Housing Infrastructure Facility (NHIF) over five years, with its key function to make loans and investments and issue grants, within constitutional limitations, to improve housing outcomes. It will also administer an affordable housing bond aggregator, to improve the efficiency of financing for community housing providers.
The NHIF will support local governments through a range of options to finance critical infrastructure such as: transport links; power and water infrastructure; and site remediation works. It will help local governments address infrastructure bottlenecks that impede development and build the infrastructure needed to speed up the supply of new housing.
Assistance provided to local governments through State and Territory governments will include the opportunity to access up to $600 million in concessional loans; $225 million in equity investments; and $175 million in grants.
Scheduled to start operation in July this year, it will be a corporate Commonwealth entity overseen by a seven-member independent board whose will have experience in banking and finance, law, housing, infrastructure financing and planning, local government, or public policy.
A draft Investment Mandate for the NHFIC is currently open for public consultation, providing detail on the NHFIC, specifically eligible projects and project proponents, the financing mechanisms and lending criteria related to its activities. It states that, of the $1 billion allocated to the NHFIC’s Infrastructure Facility function for loans, investments and grants, a combined cap of $175 million applies to the infrastructure grants and capability building activities.
The IM provides that up to $150 million of NHFIC’s funding may be allocated to provide an interim ‘warehouse facility’ that extends bridging finance to registered community housing providers until a bond issuance can be made through the Bond Aggregator function.
Submissions close on March 9. More information is here