VANCOUVER ― The federal government is investing in what it calls an innovative financing model that it says will help generate funds for affordable housing projects.
A government news release says the new lending institution, HPC (Housing Partnership Canada) Housing Investment Corporation, will provide funds to investors by creating and offering bonds in capital markets at long-term fixed interest rates.
Fisheries Minister Jonathan Wilkinson made the announcement in Vancouver saying the corporation will have the ability to take a relatively small investment and maximize it.
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An investment of $20 million from the Affordable Housing Innovation Fund is being used to complete the first round of financing that the release says is valued at approximately $33.1 million for two separate projects in British Columbia and Alberta.
The developments, one in Vancouver’s former Olympic Village and the other in north-central Edmonton, will offer a total of 271 units to low- and middle-income tenants, while 10 of the homes in Vancouver will be provided at shelter rates.
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Shayne Ramsay, the chair and president of HPC Housing Investment Corporation, says the new approach offers more financing options for affordable housing providers.
“Regardless of size or funding need, (the corporation) provides the financial expertise and underwriting required to bridge the gap between housing providers and debt investors,″ Ramsay says in the release.
The Government of Canada says its initial $20 million commitment will create a $400 million pool of funding for projects across the country.
HPC Housing Investment Corporation is a federal non-share corporation with three founding members: BC Housing, Manitoba Housing Renewal Corporation and Ontario’s Housing Services Corporation.
The Affordable Housing Innovation Fund is providing $200 million over five years for projects that highlight new funding models and building techniques aimed at lowering the costs and risks of financing affordable housing projects.