We need more homes to be built and finance can be a barrier – particularly for small builders and innovative schemes. So as well as helping larger builders and developers, the Home Building Fund is also open to small builders, community builders, custom builders and regeneration specialists.

Homes England administers the Home Building Fund on behalf of the Government. It is a flexible source of recoverable investment providing: development finance – loan funding to meet the development costs of building homes for sale or rent; and, infrastructure finance – loan funding for site preparation and the infrastructure needed to enable housing to progress and to prepare land for development.

Typical terms are up to 5 years for development finance and up to 20 years for infrastructure loans. Infrastructure finance is available to draw down up to 31 March 2021 while development finance is available to draw down until 31 March 2023. An arrangement fee is charged ((50bps for development loans and 100 bps for infrastructure loans). The pre-agreed variable interest rate has two elements – the EC Base Rate plus a margin. The margin set by Homes England is based on an assessment of creditworthiness, risk profile of the investment and collateral offered. Sales proceeds recycling can be considered in order to reduce the loan requirement and interest costs and subordinated lending will be considered.

Eligible costs will be discussed with each applicant and depend on the type of funding requested.

As explained in the Home Building Fund introductory booklet to be eligible for a development finance loan the following criteria must be met:

  • applicants will need to demonstrate that without this funding the scheme would not progress or progress as quickly, or at all
  • developments must be in England
  • the borrower must be a private sector entity which has majority control of the site
  • development projects must build a minimum of 5 homes.
  • funding will not be provided for projects where in our view there is unjustified use of leasehold for new houses
  • the borrower must be a UK registered corporate entity
  • infrastructure projects must ultimately lead to the development of new housing
  • the minimum investment the Fund will make is £250,000, except in the case of innovative housing solutions and serviced plots for custom builders

In addition to the eligibility criteria, in assessing bids, Homes England will prioritise projects that reflect wider government priorities and approve applications based on:

  • the best value for money for the taxpayer
  • projects that focus on areas of highest affordability pressures
  • the greatest potential for early delivery
  • clear local support
  • projects that support other policy and housing priorities such as strengthening the SME developer market, brownfield development, diversification and innovation in the housing market, estate regeneration, delivering Garden Villages and Towns and making use of public sector land.

These eligibility and prioritisation criteria may be updated from time to time to reflect government priorities.  Should changes to the eligibility criteria be required Homes England would not be obliged to consult about them.

At the point at which a loan offer is made, applicants are normally required to have a controlling interest in the land and a clear route to achieving planning consent.

To Apply contact HCA at: Gov.uk/homebuildingfund  Complete a short form to request a call back or register your interest

Tel:  0300 1234 500 or Email: homebuildingfund@hca.gsi.gov.uk