Herbert Smith Freehills advises Foundation Housing on $280 million HAFF funding to deliver more social and affordable homes in WA

Herbert Smith Freehills (HSF) is advising one of WA’s largest community housing organisations, Foundation Housing, on the award of $280 million in funding under Housing Australia’s Future Fund Facility (HAFFF). This will support the delivery of 396 social and affordable dwellings at four sites in Western Australia (WA).

Foundation Housing, which currently manages over 2,000 affordable homes in WA, will be responsible for the delivery and operation of the dwellings in Perth, East Perth, Como and Murdoch. The first project in inner-city Perth achieved financial close in February and the three remaining sites are anticipated to achieve financial close in the coming months.

The projects were supported by $280 million of federal funding awarded by the Australian Government through Housing Australia under its first funding round of the HAFFF program, which commenced in early 2024.

Chris Smith, Chief Executive Officer, has recognised the importance of the four projects in helping to address the housing challenges faced by Western Australians in recent years, particularly for those working in essential industries.

“Housing security has become a significant and real challenge for many across WA in recent years,” Mr Smith said.

“For individuals working in critical industries such as health and policing, drastic house price increases have reduced the ability to live close to employment hubs. This milestone investment will create much more than new homes; it will create opportunities for those who struggle to find secure and affordable housing close to employment opportunities.

“Everyone deserves the opportunity to access safe, sustainable and inclusive housing opportunities. The 396 new homes will strengthen Perth’s affordable housing network, providing more Western Australians with a stable and secure place to live,” Mr Smith said.

The Herbert Smith Freehills team was led by Projects partner and Global Co-Head of Infrastructure, Nicholas Carney and Finance partner Lucy McCullough, with the support of senior associate Josh Todd and solicitor Rachel Hay.

HSF Projects partner, Nicholas Carney said: “Australia is in a housing crisis with not enough homes available to meet demand. The Federal Government has prioritised the issue through the establishment of the HAFF and National Housing Accord.

“This is welcomed funding by industry, with over 98% of industry leaders agreeing in our latest survey that government investment schemes, and in particular the HAFFF, was crucial to supporting the delivery of more social and affordable housing.[1]

"It has been a pleasure to work closely with Foundation Housing on their participation in the HAFFF. We are incredibly proud to work on matters which meet the needs of our community, and it is a privilege to advise on complex and innovative transactions which bring some of the first HAFFF deals to life.”

HSF Finance partner, Lucy McCullagh said: “The HAFFF seeks to tackle the challenges historically holding back the delivery of new social and affordable housing by providing CHPs like Foundation Housing a mix of senior debt, concessional loans and availability payments. The availability payments and concessional loans enable the CHP to repay the senior debt, whether sources from Housing Australia or commercial banks.”

HSF has a long history of supporting clients to deliver social and affordable housing projects. Other recent examples include advising:

• Community housing providers and other organisations in relation to applications made to Housing Australia for funding under the first funding round for the $10 billion Housing Australia Future Fund Facility (HAFF).
• A consortium comprising QIC and the Brisbane Housing Company on the development and implementation of new projects under the Queensland Housing Investment Fund to deliver 600 new social and affordable homes.
• Lighthouse Infrastructure Management Limited on its investment with St George Community Housing for the delivery of key worker accommodation in Western Sydney.
• Department of Community & Justice and NSW Treasury in relation to the establishment of the A$1.1 billion NSW Social and Affordable Housing Fund for the procurement of social and affordable housing in NSW, and on the financing aspects of the completion of transactions for the first and second stages of the fund.
• Advising the Victorian Government Department of Treasury and Finance and Homes Victoria on the financing and delivery of social and affordable housing projects in Victoria, including under the Low Interest Loan Program.