The government is backing community housing providers to deliver “more social homes for less cost”, a move a local provider says is “big news for the community housing sector”.

The introduction of a new loan guarantee scheme will give community housing providers better access to debt financing at a lower cost and on more flexible terms from banks.

Under the scheme, the Crown will guarantee 80 percent of loans provided to eligible community housing providers by participating banks.

Long-running local community housing provider Queenstown Lakes Community Housing Trust (QLCHT) said this means it can refinance existing debt and fund new developments at rates that reflect stable government contracts rather than commercial risk profiles.

“In the past, community housing providers faced commercial lending costs that hamper growth,” QLCHT announced this week. 

“This new scheme changes that equation.”

QLCHT has more than 1,500 households on its waiting list.

“Cheaper finance means more homes built faster,” QLCHT said. “Every percentage point saved on interest rates translates to more families housed.”

“The government's new policy to support community providers recognises what we've known for years: local organisations understand local needs best.”

The scheme can support up to $900M in both new lending and the refinancing of up to 50 per cent of community housing providers’ existing lending, housing minister Chris Bishop said.

“It can support up to $80M in scheme loans for each community housing provider.”

He said the ambition for the social housing system is a level playing field between community housing providers and Kāinga Ora. 

“The underlying ownership of a house – whether public or private – should be irrelevant,” he said. 

“What matters is the provision of warm, dry homes to those who need them, along with social support if required.”

PHOTO: QLCHT