Housing Association Guide Part 1 - Appendix 3Publicly Funded Schemes
Contents
1.00 Publicly Funded Schemes1.01The HAG Percentages - for schemes funded under the Capital Grant System are set levels assuming that Associations will raise long-term finance on a low start basis under which their repayment obligations increase over time in the same way as their income from rent.
1.02The use of low-start repayment loans should prevent surpluses arising in the future. Surpluses would otherwise arise if conventional repayment loans were used and accordingly schemes funded under the New Capital Grant System will not contribute to any recoupment by the Department of an Association’s Rent Surplus Fund.
2.00 Development Period Loans2.01Development Period Loans - will attract interest based on the going commercial rate. The interest will be rolled up on Practical Completion and funded through the standard on-cost percentage to the scheme’s land and works cost.
3.00 Consolidation of Housing Association Loans 3.01Consolidation – can lead to greater efficiency for both DSD and Associations by reducing the workload involved in administering loans. Details of this scheme are outlined at Annex A.
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