You may have heard the recent announcement of the next phase of the Government’s Community Housing Fund and of Cornwall Council’s Revolving Loan Fund for Community Land Trusts.

Community Housing Fund

Launched earlier this month the newly relaunched Community Housing Fund sees a number of changes. £163 million is available up to 2021.
The Fund states that its aim is to support an increase in housing supply by increasing the number of additional homes delivered by the community-led housing sector; to provide housing that is affordable at local income levels and remains so in perpetuity; and to deliver a lasting legacy for the community-led housing sector in the form of an effective and financially self-sustaining body of expertise within the house building industry across the country.

It’s now administered by Homes England rather than by local authorities. The Fund is being delivered in two phases:

1)    (now) for pre-development phases ie. revenue costs, pre-development work, planning, professional fees, business planning and capital costs for remediation work and essential infrastructure; and
2)    (later, but specific date not yet indicated) to support the actual capital costs of building community-led affordable homes.

Applications (for phase one) can be made now by community organisations, housing associations or local authorities. Only local authorities can apply for capital costs during phase 1, but they can also apply on behalf of a community based project.

Applicants can apply straight away and the process will remain open to receive new applicants until funding is fully committed or until 31st December 2019, whichever occurs first.

The ‘Prospectus’ provides examples of possible eligible uses of grants. This will include:

• Revenue costs
• Community group capacity-building, including seed corn funding to get started.
• Project-specific professional fees and costs, including feasibility work, design work.
• Planning applications, business planning and project management. Capital costs for infrastructure

Capital costs

• Development of associated infrastructure which will support community housing development, which may include:
  o   access roads/roundabouts to open up a site;
  o   site remediation or flood attenuation; and
  o   utilities.

More information is available here:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/721611/CHF_prospectus_-_FINAL.pdf

 

Revolving Loan Fund

Cornwall Council has relaunched its helpful Revolving Loan Fund. The £4 million fund is specifically for Community Land Trusts, to help them build new affordable housing for local people.

Cornwall Council Cabinet portfolio holder for Homes Andrew Mitchell said: “The Council can provide CLTs with short-term development finance at a preferential lending rate.”

The £4 million fund is open for bids from CLTs for loans of up to £1.5 million per scheme. This can be through their own schemes or working in partnership with other providers. The money will be recycled as loans are repaid, and the fund is expected to run for 7 years. Loans can support the development of all types of affordable housing including shared ownership, shared equity, affordable rent, intermediate rent and intermediate sale. Cross subsidy schemes incorporating an element of open market housing may also be considered.

The Fund has the following features:

• Loans for the development and construction of new affordable housing. Eligible costs can include purchase of land, buildings, construction and conversion of a building.
• Loans of between £75,000 and £1.5 million per scheme for terms of up to 18 months.
• Loans are to be repaid within 12 months of completion of the scheme.
• Interest will be charged at Cornwall Council’s standard loan rate (currently 4.5%)

Between 2009 and 2014 the first CLT Loan Fund lent out £3.14m which enabled 35 new affordable homes to be built.

In 2014, Land’s End Peninsula CLT used a £879,000 loan from the CLT Revolving Loan Fund to build 8 much-needed affordable homes at Croft Mear in Pendeen. Three homes were sold to local people at discounted rates, and the remaining 5 are providing affordable rented homes in the village.

Cllr. Sue James, Chair of the Land’s End Peninsula CLT, remembers how satisfying it was to see the homes occupied by local families just in time for Christmas:  “It was a long haul to bring this project to fruition and the loan from Cornwall Council helped us to build 8 affordable homes in Pendeen that are protected in perpetuity and available to local people for generations to come.”

If you would like more information on the CLT Revolving Loan Fund please follow this link: https://www.cornwall.gov.uk/housing/affordable-housing/community-land-trust-revolving-loan-fund/

If you need more information on any aspect of community-led affordable housing please contact the team here at Cornwall CLT