NHFIC Capacity Building Program: Frequently Asked Questions (FAQs)
Applying for a grant
Q: Which community housing organisations can access grant funding?
A: The program is restricted to community housing organisations which are registered as tier 2 or tier 3 community housing providers (CHPs) under the National Regulatory System for Community Housing (NRSCH) or under the equivalent Western Australian or Victorian regulatory frameworks. The program is not open to community housing organisations registered under other frameworks or systems.
Q: We’re an Aboriginal community housing organisation seeking NRSCH registration, can we apply?
A: At NHFIC’s discretion, grant applications can be processed if the community housing organisation is close to completing CHP registration formalities.
Q: Our organisation is based in a state where CHIA is not the peak body. Can we still apply for a grant?
A: Yes. Grants are available to registered CHPs even if CHIA is not the peak body.
Q. Can you please talk us through the mechanics of a CHP applying for a grant?
A: Once the CHP has decided on a consultant and received a proposal from them both parties will complete an application form. The application is reviewed by CHIA who recommend to NHFIC that the proposal is consistent with the NHFIC referral and provides reasonable value for money. NHFIC will notify CHIA and the CHP if the grant has been approved and CHIA will enter into a deed with the CHP. CHIA will contact the relevant Panel Member referring the CHP for the professional services.
Further information to be found in the NHFIC-CHIA full EOI document.
Q: Who at CHIA do we contact to get a grant?
A: You need to first contact NHFIC, or have an application in process with them. CHIA help administer the grants program, but NHFIC has sole discretion to award a grant.
Q: We need $5 million to build new social housing, can we have a grant?
A: NHFIC will only consider supporting a grant application if the proposal is reasonably well advanced. For example, a potential site has been identified for a development, basic costings assembled, and there is an understanding of loan repayment sources. High level, general proposals are not suitable for grant funding. However, if the CHP has a good social and affordable housing proposal, and has carefully thought through how this could work, NHFIC could support a grant to further develop the proposal and help submit a loan/infrastructure application.
Q: Do we suggest we need a grant, or does NHFIC?
A: It could be either party. When the proposal is at an early stage of progression, the CHP could request a grant during the initial discussion with NHFIC, or NHFIC might suggest a proposal needs more assistance and therefore a grant would be appropriate.
NHFIC might also suggest consultancy support is needed when a full loan/infrastructure application has been submitted, but is judged to need further work.
Q: How much information must we supply to NHFIC to unlock the possibility of a grant?
A: CHPs should discuss their proposal with NHFIC and complete the straightforward web-based EOI form. Sometimes the discussion will be first, followed by the EOI – sometimes the EOI form will be completed first, followed by a discussion.
Use of grants
Q. Will it be up to the CHP or NHFIC to decide what type of advice they need from a panel consultant?
A: NHFIC will make a recommendation as to the type/s of professional services that would enable the CHP to have a reasonable prospect of success in a subsequent loan application.
Q: What can the grant be used for, and who decides?
A: The grants need to focus on building capacity in one or more of the four agreed areas (finance, business planning, property development and risk management), to help with an application for a NHFIC Affordable Housing Bond Aggregator loan or infrastructure support through the National Housing Infrastructure Facility. NHFIC decides what the grant can be used for, not the CHP or CHIA.
Q: We need funds for general capacity building, can NHFIC help?
A: No. The grants are targeted at supporting applications for NHFIC loans and infrastructure support. Peak bodies and State governments help with general capacity support.
However, NHFIC grants will often be useful more broadly for applicants – for example consultancy on risk management could help both a NHFIC loan application as well as building a CHP’s broader understanding of risk assessment and mitigation.
Q: Why doesn’t NHFIC help all CHPs with capacity building initiatives, rather than expect CHPs to apply for the same types of grants to various consultants who are just repeating the same work?
A: NHFIC is currently developing a financial model to help with loan applications. It is expected this will be finalised during August 2019, and be launched along with training courses.
NHFIC has requested CHIA to prepare suggestions for sector-wide initiatives based on common themes observed in grant applications during the first quarter (July – September 2019). Discussions will be held in October 2019.
Q: Is there the ability to pool together grants for a generic piece of work across a group of CHPs?
A: No, grants are available to individual CHPs only.
Q: We need more than $20,000 to write our Information Memorandum – can NHFIC provide more money?
A: The figure of $20,000 is intended to be the upper amount of grant funding provided per application. However, in exceptional circumstances, NHFIC might decide to provide a higher level of grant funding. NHFIC is only likely to exercise this discretion if the transaction would not otherwise proceed, and the applicant can demonstrate genuine need for the funds.
While NHFIC will generally only provide $20,000 support through grants, CHPs can co-contribute towards the total consultancy costs.
Q: Can we apply for $20,000 for risk analysis and $20,000 for business planning?
A: No, the $20,000 limit is per application, not per type of consulting service. However, as in the answer above, in exceptional circumstances NHFIC might agree to a higher total figure.
Q: Can we split the $20,000 grants and use $15,000 for business planning with one firm of consultants, and $5,000 for property development advice with another consultant?
A: Yes, the $20,000 figure can be split between the four types of consultancy services, and these services can be provided by one or more consultants provided they are Panel Members.
Q: We only need $10,000 for our loan application. Can we have the extra $10,000 to send staff members on training courses for supporting tenants experiencing domestic and family violence?
A: No. Grants can only be used in connection with applications to NHFIC for loans or infrastructure support. The $20,000 is a maximum figure – smaller amounts can be requested.
Q: What happens if NHFIC does not allocate all of the $1.5 million available for grants?
A: NHFIC has the funds available, and along with CHIA is keen for as much of this as possible to be spent on value-for-money consulting projects and capacity support helping with NHFIC loan/infrastructure applications. NHFIC is not authorised to spend its grant funding for other purposes. With NHFIC agreement the grants scheme could be extended, although the agreed end-date remains 30 September 2020 until further notice.
Q: I received a NHFIC grant last year for a loan refinancing, and now require a grant to help with a development project. Am I limited how many times I can get a grant?
A: No. The general principle is for up to one grant per application to NHFIC. A separate loan or infrastructure application to NHFIC could trigger a further consultancy grant. However, all grants are at NHFIC’s discretion – and cannot be for the same or similar purpose from the same organisation but at different times.
Q. Do CHPs need to match the spend on the consultancy grant?
A: The $20,000 (incl. GST) grant is an upper limit for consulting services and there is no requirement for CHPs to match the spend.
Q. Does the engagement cost need to cap out at $20k (incl. GST) or can the grant be used to offset a higher cost arrangement?
A: The grant can be used to contribute towards a higher cost consulting engagement where the CHP finances the gap over $20k.
Working with consultants
Q: Who decides which consultant we have to use – ourselves, CHIA or NHFIC?
A: Ideally the CHP will select a couple of potential consultants who are Panel Members (as listed on CHIA’s website), meet and discuss their proposals, then decide which one to propose be appointed. CHIA can support the CHP in suggesting the names of potential consultants, if required.
Once a Grant Application Form has been completed, CHIA and NHFIC will review to make sure the proposed consultant is likely to be able to deliver the required services.
Q: We have a consultant we’d like to engage who is not Panel Member. How do we proceed?
A: Contact CHIA, who may be able to add the consultant as Panel Member if they complete the same process as consultants who were appointed to the Panel in June 2019.
Q: Who puts together the consultant’s brief?
A: All proposals require a short Grant Application Form to be completed, and this must be signed by the CHP and the consultant. This form can be completed by the CHP, the consultant, or by both organisations.
Q: The consultant’s work has not been up to standard, what can we do?
A: As with traditional consulting contracts, the first step is for the CHP and consultant to discuss issues, and ideally for the consultant to bring their work up to the desired standard. CHIA will only pay the consultant if they have delivered what was agreed in the contract, and the CHP is satisfied. If there is a dispute between the CHP and the consultant, a three-party discussion will be held which includes CHIA, the CHP and consultant. The consulting contract is issued by CHIA, and CHIA will make the ultimate decision on disputes (after first referring the matter to NHFIC for advice).
Q: Are we going to get value for money from the consultancy contract?
A: CHPs are advised to draft a consulting contract that best helps them build capacity, not just for the NHFIC contract but also longer term. This might involve requiring the consultant be based for some of their time in the CHP’s office, and/or to hold staff workshops and write a short report on learnings from the consultancy work.
CHIA is required by NHFIC to ensure the consulting contract gives value for money. And CHPs can compare and contrast between the charge-out rates and experience of different consultants.
Q. What restrictions (if any) are there around directly contacting CHPs regarding the panel program?
A: The communication regarding the grant program is generally as follows: NHFIC will refer CHPs to CHIA who in turn recommend two or three consultants on the panel. CHPs then contact the panel member. The panel members may already have relationships with CHPs and this can continue. It is not recommended that panel members contact CHPs directly without prior introduction or unless they already have an existing relationship.
NHFIC lending and infrastructure support
Q: What types of loans and support does NHFIC provide?
A: The best sources of information is the NHFIC website, and by speaking to a member of the NHFIC team.
Q: Can NHFIC support a project under the NDIS Specialist Disability Accommodation (SDA) program?
A: NHFIC is open to applications from registered CHPs for this type of project. As both SDA and NHFIC are relatively recently established, the best approach is to arrange a meeting with the NHFIC team
Q: I’ve heard the minimum application size is $5 million. Is this true?
A: Initially NHFIC encouraged applications over $5 million to reach sufficient scale to issue their first social bond. Now this has been achieved, there is no minimum size. However, CHPs need to appreciate the many costs involved in a loan or infrastructure application – hence very small applications may not be cost effective for the CHP (or for NHFIC).
Q: Can we obtain NHFIC loans with a 20 year repayment period?
A: To date NHFIC loans have been for 10 years, which corresponds to the recent NHFIC bond. NHFIC is open to considering longer term facilities if a State/Territory Government, or the Commonwealth, opens a new social and affordable housing scheme requiring longer term finance. However, at the moment, the maximum period of the loan is 10 years.
Q: Is there going to be further administration and duplication with the NHFIC loans/infrastructure support and the consultancy grants?
A: NHFIC has supported CHIA to keep consultant Panel Membership application forms and Grant Application Forms as short as possible. Both forms can be completed in under 2 pages.
The level of information NHFIC requires is similar to that of commercial lenders. However, as a corporate Commonwealth entity, it benefits from certain data exchange protocols with regulators to minimise double-submission of the same information. NHFIC is also in the process of drawing up agreements with State/Territory governments which will simplify the lending relationship, and minimising the need for case-by-case tripartite agreements
Q: Will NHFIC provide financial model and credit proposal templates?
A: Yes, templates and training are expected to be provided in August 2019, exact dates to be confirmed.
Q. Do we have project completion date constraints; i.e. must the project be completed by a certain date?
A: There are currently no restrictions on completion dates and it can be considered open-ended in terms of current NHIFC funding.
Q: Can you clarify the terms and conditions regarding construction funding, term, financial covenants, will NHIFIC fund non affordable component of a development what are completion guarantees takeout requirements for non-affordable component?
Q: Can you describe the nature of the risk appetite of NHFIC regarding pre-sale/completion risk?
Q: What are the key terms of the envisaged tri-partite deed?
Q: Are there details for credit risk criteria including typical coverage ratios, nature of security required?
A: The best sources of information for questions regarding funding arrangements and credit criteria are the on NHFIC website and speaking to a member of the NHFIC Origination team
For further information contact:
Director Strategy & Operations, National Housing Finance and Investment Corporation
firstname.lastname@example.org 0428 869 104
Project Director, Community Housing Industry Association
email@example.com 0438 520 448
Project Manager, Community Housing Industry Association
firstname.lastname@example.org 0422 296 782