The National Housing Finance and Investment Corporation (NHFIC) has widened the scope of its investments to allow funding to be used “to attract more private capital into the social and affordable housing sector”.

The changes follow the government’s announcement of a National Housing Deal which will bring together the superannuation, construction and local government sectors to deliver 1 million new homes over the next five years.

Under the proposed changes, up to $575 million from the NHIF fund will be available to invest in social and affordable housing, including “investment by pension funds and other institutional investors”.

“Expanding the remit of the NHIF in this way will provide additional flexibility for this funding to be used to attract more private capital into the social and affordable housing sector to further help improve the returns available,” said the NHFIC Act declared.

“The NHFIC Board shall administer the NHIF in such a way as to ensure access to the facility for social or affordable housing projects.

“The NHFIC shall make reasonable efforts to identify projects or potential projects from all states and territories that may be eligible for funding under the NHIF.”

The NHFIC is responsible for overseeing the increase in housing supply through the billion-dollar National Housing Infrastructure Facility (NHIF), which provides concessional loans, grants and equity financing for favoring housing.

The draft amendments are open for public consultation until November 14.

The move builds on the government’s housing reform agenda, which includes the National Housing Accord which will provide $350 million over five years, with longer-term continued availability payments to provide 10,000 affordable homes. additional.

States and territories will also support up to 10,000 additional affordable homes, bringing the number of homes that can be delivered under the agreement to 20,000.

The target of one million homes has been described as “ambitious” by economists, despite the construction of almost a million homes in the previous five years.

CoreLogic, Australia’s head of research, Eliza Owen, said it was important to note that the past five years have seen high levels of construction.

However, as interest rates rise, house prices fall and supply-side constraints persist, the delivery of one million homes is not guaranteed and could be “more ambitious” than what has been achieved in the past five years, she said.

In addition, the government has earmarked a $10 billion injection to establish the Housing Australia Future Fund, which will be used to build 30,000 new social and affordable homes over five years and confirm that its housing guarantees remain unchanged.

New home guarantee programs that include the Morrison government’s First Home Loan Deposit Scheme (FHLDS), New Home Guarantee (NHG) and Family Home Guarantee (FHG) have seen strong uptake, with some states doubling their proportion.

Recent data from the NHFIC revealed that Queensland has seen the highest demand for the scheme, with guarantees supporting a fifth of new home buyers in the state over the past financial year.

[Related: Home guarantee uptake surges in Qld]