A housing association has borrowed £30m from a council which has provided funding to 15 housing associations since 2010.
Johnnie Johnson Housing, a Cheshire-based housing association which specialises in services for older people, borrowed the funds from Warrington Borough Council.
It will use the cash to help build almost 500 homes in the next five years.
Warrington Borough Council has provided £430.3m in loan facilities to housing associations in the past seven years, of which £112.3m has been drawn to date.
Lending from councils to housing associations is rare, but Warrington has pioneered a model which sees it borrow at low rates from the public works loan board and lend on to housing associations to build.
Russ Bowden, deputy leader and executive member for corporate finance and property at the council, said: “Our provision of loans to housing association partners is enabling them to build much-needed homes and aiding economic regeneration locally. It’s also generating a return on our investment that is reinvested in council services.
“I’m delighted that we’ve completed this deal with Johnnie Johnson Housing – it’s the latest success story for this innovative scheme.”
The loan facility is the first new funding agreed by the housing association for a number of years, after it regained compliant status from the Homes and Community Agency, the English social housing regulator, in November 2016.
The housing association had been downgraded to a non-compliant rating for both governance and viability due to severe issues with its business planning management in 2014.
Yvonne Castle, chief executive of Johnnie Johnson Housing, said “We were really pleased that our board agreed to us going out to the market for £30m of funding to help build more homes than we had originally planned.
“This means we can improve on the figure of more than 250 to almost 500 within five years. This is a significant commitment for us and one which marks a new start in homebuilding for Johnnie Johnson Housing.”
Mike Roche, director at Savills Financial Consultants, which worked on the deal, said “The association received a number of extremely competitive proposals, which is testament to the actions of its board, executive and staff.”