Home Builders Fund
Following on from the recent announcement at the Conservative Party Conference that the Government will introduce a new Home Builders Fund, the Homes & Communities Agency has published a guidance pack which adds some detail to the scheme.
WHAT IS THE HOME BUILDERS FUND?
The Home Builders Fund will provide development finance to meet the development costs of building new homes for rent or sale; and also infrastructure finance for site preparation and enabling infrastructure. The HCA has the ultimate responsibility for managing the Fund and its lending decisions are final.
HOW DOES IT WORK?
Key features of the fund include:
• Loans of £250,000 to £250 million, with smaller amounts available for innovative home building solutions.
• Typical terms are up to 5 years for development finance and up to 20 years for infrastructure loans.
• Interest is payable at transparent, pre-agreed and variable rates.
• Sales income can be recycled to minimise the loan request.
• Subordinated lending will be considered.
• Finance is available to be drawn upon until 31st March 2021.
• Eligible costs will be discussed with each applicant and depend on the type of funding requested.
WHO CAN APPLY?
The core eligibility criteria are as follows:
• Applicants will need to demonstrate that without the funding, the scheme would not be able to progress quickly or at all.
• Developments must be in England.
• The borrower must be a private sector entity which has the majority control of the site.
• Development projects must build a minimum of 5 homes.
• The borrower must be a UK registered company.
• The infrastructure project must lead to the development of new housing.
As a Government backed initiative, the Fund reflects the Conservative’s wider housing agenda. Specifically, the Government is looking for schemes and projects which:
• Offer the best value for money for the taxpayer.
• Offer the greatest potential for early delivery.
• Can demonstrate clear local support.
• Support policy priorities such as Housing Zones, brownfield development and diversification and innovation in the housing market.
• Support wider government priorities such as Starter Homes, Garden Villages and making use of available public sector land.
HOW TO APPLY?