Benefits of upfront grant funding

An injection of upfront capital funding is one of the most effective ways to create social housing supply. Despite availability of low cost credit through commercial lenders and the Commonwealth’s National Housing Finance and Investment Corporation (NHFIC), a grant or subsidy may still be 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. 

The CHIF was designed on the premise that there are many smaller and regional CHPs who have accumulated surpluses, land or capacity to borrow that can be unlocked through grants.