Housing Minister Chris Bishop. Photo: RNZ / Mark Papalii
The Community Housing Funding Agency has received an investment-grade A+ credit rating from ratings agency S&P Global.
The credit rating has allowed the agency to announce it would become the first issuer of social bonds, to be used to provide funding to community housing providers at lower interest rates.
The funding agency was launched by social enterprise Community Finance in 2024, and received $150 million each from the government and ANZ Bank, as well as various philanthropists.
Housing Minister Chris Bishop said the rating would allow the agency to access capital more easily.
"This means they can pass those savings on to [providers] who can then deliver social housing at lower costs," he said.
"Currently, community housing providers account for 16 percent of our social homes, or around 14,000 houses, while Kāinga Ora provides about 73,000 social homes."
The government had previously faced criticism for its opaque funding model for community housing providers.
Community Housing Funding Agency chief executive James Palmer said there were more than 90 providers in the country, and its lending programme would target the top 30 percent, lowering their cost of borrowing and allowing them to build more social and affordable housing.
Notable providers include the Salvation Army, Accessible Properties NZ Ltd and Te Āhuru Mōwai Ltd Partnership.
Palmer said the funding agency wanted to target its social bonds at institutional investors and KiwiSaver providers.
"[The agency] will provide investors and KiwiSaver providers a real opportunity to align financial returns with social good, while helping to solve one of New Zealand's most pressing challenges," he said.
KiwiSaver providers Generate, Simplicity and Pathfinder had participated in earlier funding rounds and had been joined by others more recently.
Palmer said one provider saw a spike in membership after announcing their tie-up with the agency.
Although the social bonds were only open to institutional-style investors, Palmer suggested that members of the public write to their KiwiSaver providers if they wished their savings to be exposed to the social bonds.
Palmer said the agency's lending pipeline had grown to more than $500 million, and had ambitions to grow to well above $1 billion.
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