Last week, the National Housing Finance and Investment Corporation (NHFIC) issued its first bond of $315 million to community housing providers (CHPs). CHIA congratulates NHFIC on their success in providing the single largest social bond in Australia.

NHFIC’s bond will ensure funds raised be loaned to CHPs to help deliver more social and affordable housing across the country. The bond will provide a fixed rate of under 3.00% for 10-year, interest-only loans to CHPs who are participating in NHFIC’s first round of loans. BlueCHP, CHL, Compass, Hume and Unity are all part of the NHFIC scheme.

As a result of NHFIC’s bond, CHPs are provided with greater financial certainty and cheaper finance which will generate better cash-flow. The funds will be used to create up to 300 new affordable rental dwellings, enhanced support services and ongoing maintenance.

“The NHFIC interest rate is significantly below the rates that the community housing industry can typically borrow and means our members can put more money into building new homes,” said Wendy Hayhurst, CHIA CEO.

Nathan Dal Bon, NHFIC’s CEO, said he’d like to thank the many stakeholders who have helped with the success of NHFIC’s first bond; including the community housing sector, state governments and bond investors.

“NHFIC is very pleased at the exceptionally strong level of investor demand for its first affordable housing bond which was four times oversubscribed. We are now able to pass on the benefits of NHFIC bonds through to CHPs which ultimately benefits tenants on lower incomes,” Mr Dal Bon said.

NHFIC will work closely with the community housing sector and investors to regularly issue social bonds in the future and create more affordable housing in Australia.