Forgiving Housing Innovation Fund Suspensory Loans and Grants
The Government introduced the Housing Innovation Fund (HIF) in 2003 to support the growth of third sector social housing in New Zealand.
Through HIF, third sector social housing providers were able to receive suspensory loans or conditional grants for the purposes of building social housing.
In 2010, as part of the wider social housing reform programme changes, the Government transferred responsibility for social housing funding to the Social Housing Unit and stopped issuing new HIF loans.
What are the changes in relation to forgiving suspensory loans and conditional grants?
Although new loans are no longer being issued through the Housing Innovation Fund, the Government has introduced changes that will enable existing recipients of HIF funding the opportunity to have their suspensory loans or conditional grants forgiven, for the purposes of building new social housing.
The changes also allow Kāinga Ora to reduce the security (priority) amount relating to suspensory loans and conditional grants issued through the Housing Innovation Fund.
The changes aim to remove some of the financial barriers faced by social housing providers, by freeing up capital available to finance new social housing projects.
When do the changes take effect?
Organisations can begin the process of preparing an application form now. Any change to suspensory loan or conditional grants conditions will take effect from the date of settlement for a project that the freed capital will be applied to.
What are the eligibility criteria and how do organisations apply?
To be eligible, organisations need to already have received financial assistance through the Housing Innovation Fund.
Who is responsible for determining who is eligible?
Kāinga Ora is responsible for administering these changes, processing applications and assessing eligibility. Kāinga Ora will consider applications on a case by case basis and, as it bears the risk, has the final say in altering HIF security arrangements.
Note that the decision to change any arrangement rests with Kāinga Ora.
What is the priority amount?
The security amount (also referred to as a “priority amount”) is 1.2 times the value of the original suspensory loan amount. This could be reduced down to 1.2 times the outstanding loan balance.
Can term loans be forgiven?
No. Term loans are not included in the changes.
Are there any tax implications if my application is successful?
If your application is successful, your organisation may incur GST liability for housing development sooner than you had initially anticipated.
For more information, email legacymanager@kaingaora.govt.nz or view the eligibility criteria and application form below.
Eligibility checklist and application form
If you’re an organisation that has already received financial assistance through the Housing Innovation Fund, you may be eligible to have your existing suspensory loan or conditional grant forgiven by Kāinga Ora.
To be eligible, you must meet all the criteria set out below and your application must be associated with a new housing project. Thoroughly review the eligibility criteria checklist and evidence required below before completing the application form.
To be eligible, you must: |
Description and guidelines |
Be a not-for-profit organisation |
A not-for-profit organisation uses any profit for charitable purposes. Your organisation’s trust deed continues to include clauses that the organisation is not-for-profit or dividend. |
Be financially viable |
Financial viability is measured through net profit and equity. Your organisation’s last audited accounts should be provided. |
Have strong governance and management structures and systems in place |
Governance and management structures, systems and practices must be in place. This includes:
|
Have a track record in social and affordable housing |
Your organisation must have provided housing for at least two years or have business plans (or similar documents) that outline housing as a core business. |
Have plans for growth |
Your organisation must have an identified housing project focused on growing your social housing portfolio, and this needs to be included with your application. Your planned growth and financial position should indicate that your organisation is able to fund the growth. Business plans for growth should be realistic within the context of the audited accounts. |
Be able to provide value for money |
Any freed capital should enable growth in social housing. |
Continue to supply social and affordable housing |
The trust deed or other documentation must state that your organisation will continue to provide social or affordable housing. |
Provide housing as part of your core business |
Your organisation must clearly be in the business of housing provision, as opposed to housing provision being a by-product of other service offerings. This may be evidenced by a track record of community housing provision or it may be explicit in trust deeds or other founding documents. |
How to apply
You need to complete a copy of the application form [PDF, 57 KB] and provide the following evidence to support it:
- a copy of the trust deed or similar foundation document that your organisation continues to be a not-for-profit charitable organisation
- a copy of your latest audited accounts
- details of your proposed project
- a copy of an offer from another lender/funder.
Email the form along with your supporting information to legacymanager@kaingaora.govt.nz. You must submit all your information electronically.
If you are successful in your application, this may mean your organisation incurs GST liability for housing development sooner than you had initially anticipated.
The decision to change any arrangement rests with Kāinga Ora.
Page updated: 24 October 2019