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Benefits of upfront grant funding

An injection of upfront capital funding is the most effective way to create social housing supply. Despite availability of cheap credit through commercial lenders and the Commonwealth’s National Housing Finance and Investment Corporation (NHFIC), upfront grant funding is still required to make social housing projects viable. Research conducted by AHURI on funding models concluded that upfront capital funding delivered the lowest cost to government over the long term. Modelling of investment scenarios demonstrates that capital grants combined with efficient financing is the most cost effective pathway for government. https://www.ahuri.edu.au/research/final-reports/306

The CHIF was designed on the premise that initiatives such as Future Directions were of a scale that attracted mainly larger CHPs. There are many smaller and regional CHP who have accumulated surpluses, land or capacity to borrow that can be unlocked by this program.

Government investment for the property’s use as social housing is safe guarded in perpetuity through placing an interest on title in the name of the Secretary of DCJ.  This allows CHPs to recycle assets with the social housing proportion and value going forward to the next project.

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Last updated: 15 Nov 2021