Community housing organisations have an opportunity to provide the Commonwealth Government with feedback on the National Housing Finance and Investment Corporation (NHFIC).
The Commonwealth Treasury has released a consultation paper on the potential structure and governance of the new corporate Commonwealth entity, which was announced as part of a series of measures in the 2017-18 Budget aimed at improving housing affordability.
The NHFIC is to have two functions:
1. A $1 billion National Housing Infrastructure Facility (NHIF), which will use tailored financing to partner with local governments to fund infrastructure. The aim is to accelerate housing supply (the consultation paper proposes that priority be given to projects that include a certain amount of affordable housing).
2. An affordable housing bond aggregator, which will access the wholesale bond market to enable community housing providers to obtain cheaper finance on better terms, to expand supply. A report by consultants EY found the bond aggregator would be able to deliver interest savings of 0.9 to 1.4 per cent on a 10-year debt, depending on the level of government support.
EY estimated that the CHP sector will need to access around $1.4 billion of debt over the next five years, which should provide the necessary demand and scale needed to support affordable housing bond issuances.
The Treasury is now seeking feedback on the potential structure and governance of the NHFIC, and how the NHIF and bond aggregator will work.
CHIA and the state community housing peaks will be developing a joint submission and individual organisations that wish to develop their own submissions will need to do so by the Friday 20 October deadline.
You can download the consultation paper and the final report on the Bond Aggregator here