Orkney Housing Association is one of four across the country to benefit from a £25million Scottish Government investment in charitable bonds.
The bonds, issued by Allia, a social investment charity, provide a new source of finance for housing associations to build around 750 new affordable homes, while interest on the loans provide grants for 200 social homes.
Four housing associations will benefit from this year’s £25million bonds – Kingdom in Fife, Eildon in the Borders, Orkney and Ayrshire. A further £25 million is earmarked for 2016-17.
Sandy Dennison, finance manager with Orkney Housing Association, said: “We are currently working on an ambitious development programme, and the terms of the charitable bond mean that we can keep building high quality affordable homes whilst minimising future rent increases. We will use this funding to support an additional build of 24 rented properties over the next year.”
This year’s £25.6m investment has resulted in £18.9million in loans for new affordable homes, and over £6.7million grant funding, to be allocated by the Scottish Government, to build new homes for social rent.
Social Justice Secretary Alex Neil said: “Innovative financing schemes such as charitable bonds will play a major role in our approach to supporting a major expansion in housing supply over the next parliamentary term.”