£225 million affordable housing fund open for bids

Housing Minister Mark Prisk recently unlock a multi-million pound government fund to deliver up to 15,000 extra affordable homes.

Affordable housing providers in England will be able to bid for a share of up to £225 million to deliver the additional new homes.

Last week (27 February 2013) Mr Prisk launched a bidding guidance for the scheme, which ws based on the highly successful and over-subscribed Affordable Homes Programme.

The Affordable Homes Programme is set to deliver 170,000 new homes by 2015 - with almost 63,000 of these already completed.

On top of this, recent funds could help deliver up to 15,000 additional new affordable homes.

Support for Housing Guarantee

The fund is intended to work alongside the government’s Affordable Housing Guarantee, which reduces the risk for lenders by providing a government pledge to underwrite debt taken out on eligible housing projects.

Providers can apply to combine today’s cash with the guarantee: a share of the £225 million funding can be used as a grant towards a project, while the guarantee allows them to borrow the remaining finance at below market lending rates - enabling them to deliver more affordable homes.

Housing Minister Mark Prisk will say:

“Today’s £225 million fund will not only provide a financial boost for successful house building projects, it will also unlock vital private finance to get spades in the ground and workers on site.

“Paired with the groundbreaking Affordable Housing Guarantee, this cash injection will help get Britain building, delivering up to an additional 15,000 of the high-quality affordable homes this country wants and needs.”

Richard Hill, interim CEO of the Homes and Communities Agency, which is administering the funding, said:

“We welcome any initiatives to boost affordable housing supply and support Registered Providers to secure loan finance to get their schemes off the ground. We’re pleased to be able to provide further details of how they can bid for a share of the £225 million of funding that will help deliver additional affordable homes, and how they will be able to benefit from the government’s Affordable Homes Guarantee.”

Further information

By launching bids for the Affordable Housing grant now, providers will be able to prepare applications for the Affordable Housing Guarantee as soon it opens for business later this year.

Affordable housing providers who are eligible to apply for both the guarantee and associated grant in England must be private registered housing providers (and therefore regulated by the Homes and Communities Agency) whose debt is classified to the private sector.

Last weeks bidding guidance is published on the Homes and Communities Agency website

Full eligibility requirements and details on how the housing guarantees will be structured were published in the scheme rules on 1 February. The government launched an invitation to tender, seeking delivery partner/s for the running of the guarantees schemes, on 31 January.

The Greater London Authority will publish its own prospectus for how the Affordable Housing grant will operate in London shortly.

The prospectus for the fund seeks bids for homes that will be completed by March 2015. Applications for the guaranteed debt have to be approved by March 2015, with the homes started within 12 months of the debt being drawn down.