Progressive Home Ownership Fund

How progressive home ownership works 

Progressive home ownership (PHO) can help people into their own homes through arrangements like rent-to-buy, shared ownership or leasehold schemes.  

Rent-to-buy 

An eligible household initially rents their home from an approved PHO provider. Within a 15-year period the household puts aside savings and buys the home from the provider.  

Shared equity 

An eligible household becomes a part-owner in a home, along with an approved PHO provider. Within a 15-year period, the household buys out the PHO provider and becomes the sole owner of the property. 

Leasehold 

The eligible household buys a registered leasehold interest in a home from a PHO provider with the right to occupy the property over the long-term, such as 100 years. The freehold interest in the property is retained by the provider and the leaseholder pays a modest ground rent, as well as servicing any mortgage commitment.  

Freehold home ownership is not achieved using a leasehold model, but the leaseholder has secure tenure in their own home and the opportunity to build savings over the term of the lease. 

About the Progressive Home Ownership Fund 

The $400 million Progressive Home Ownership Fund offers approved PHO providers funding via a 15-year interest free loan. The PHO providers then use that money to fund homes that are then used to partner with individuals, families and whānau in a rent-to-buy, shared equity or leasehold arrangement.  

Who the PHO fund helps 

The PHO fund can help: 

• lower-to-median income households who are unlikely to be able to buy a home without a reasonable level of financial and non-financial support 
• first-home buyers who can service a mortgage but don’t have a sufficient deposit 
• households that have at or above median incomes but don’t earn enough to service a low-deposit home loan at current house prices. 

It aims to increase home ownership for three priority groups: 

• Māori 
• Pacific peoples, and 
• families with children.

Eligibility  

Applicants must: 

• be legally able to buy a home in New Zealand (or be married to, or in a civil union or de facto partnership with someone who is legally able to buy a home in New Zealand) 
• have a household income before tax of no more than $130,000 (except for multi-generational households, who can earn more) 
• be a first homebuyer or a second chancer (someone who has owned a home before but is back in the same financial situation as a first-time buyer e.g. due to a divorce). 

Applicants must also commit to living in the house as their main place of residence for at least three years i.e. they’re not buying it as an investment property. 

As well as this general eligibility criteria, PHO providers can also apply their own criteria.  

How to buy a home through the PHO Fund 

There are two ways for individuals and whānau to buy a home through the PHO Fund: 

• through First Home Partner, a shared-ownership scheme run by Kāinga Ora – Homes and Communities.
• through a programme managed by an approved PHO provider. 

First Home Partner with Kāinga Ora – Homes and Communities 

First Home Partner is a shared ownership scheme for first home buyers who can service a standard mortgage but don’t have a big enough deposit or don’t qualify for a big enough home loan to buy a place on their own.  

With First Home Partner, Kāinga Ora takes an equity share in a house, which the household buys out over time.  

Unlike other PHO schemes, where providers will match applicants to homes, with First Home Partner, applicants must find a suitable home themselves.  

Find out more about eligibility for First Home Partner and how to apply(external link) 

Becoming a PHO provider  

Funding pathways 

There are two pathways that organisations can use to apply for a loan to establish a new progressive home ownership programme, or expand an existing one: the provider pathway for private organisations with housing experience or Te Au Taketake for Māori and iwi organisations. 

Provider pathway 

This pathway offers four funding rounds per year. Funding rounds open dates between the following dates:

2023

• 25 January – 2 March
• 3 April – 10 May
• 3 July – 7 August
• 11 September – 13 October.

You can contact our PHO Team for information about funding rounds and applications by emailing PHO@hud.govt.nz. 

Te Au Taketake 

Te Au Taketake provides dedicated funding for iwi and Māori organisations to develop or expand their PHO programmes, supporting better housing outcomes for whānau Māori. Applications for funding can be made at any time by contacting PHO@hud.govt.nz   

Te Au Taketake reflects the Crown’s responsibility as a Treaty Partner to support pathways that let Māori communities to thrive. 

The name Te Au Taketake likens the pathway to the currents of the ocean, the dominion of Tangaroa. It acknowledges the connection between housing in Aotearoa to the traditional narrative of Te ika a Māui and the home of Tonganui. Māui, who pulled Aotearoa into the world of light when his hook caught on the top of the home of Tonganui and became the first whare of Aotearoa. 

We will work with iwi and Māori organisations through Te MAIHI o te Whare Māori the Māori and Iwi Housing Innovation (MAIHI) Framework for Action to enable them to support more whānau Māori into home ownership. 

See more about MAIHI

Becoming a PHO provider 

To receive funding, organisations must become an approved PHO provider and submit a plan showing how they'll deliver their PHO scheme. They can do this by responding to an Invitation to Participate in their chosen pathway. 

Organisations must prove that they have: 

• a sound financial situation 
• good governance practice 
• sound organisation processes 
• designed a viable PHO product 
• financial institutions that are willing to work with the product 
• the ability to work with households. 

Their delivery plan must include: 

• the type, number and location of the dwellings that need PHO funding 
• evidence of demand for their PHO scheme 
• the amount of funding needed 
• estimated delivery timeframes 
• drawdown milestones and an estimated timeframe for reaching them 
• what security the organisation intends to offer for the loan
• demonstrate how the loan will be repaid within the 15 year term .

Download detailed requirements for becoming an approved PHO provider

Te Aho Tāhuhu Webinar Series (Dec 2021) 

A series of 10 webinars was produced in conjunction with Te Matapihi to discuss various aspects of the Progressive Home Ownership Scheme and these webinars can be accessed through the links below:

• Episode1 – Te Au Taketake and the Provider Pathway (external link)
• Episode 2- PHO Products explained (external link)
• Episode 3 – First Home Partner Pathway (external link)
• Episode 4 - Managing Risk (external link)
• Episode 5 - Financial Modelling (external link)
• Episode 6 – MAIHI Funding (external link)
• Episode 7 – Key Contracts and Considerations (external link)
• Episode 8 – Working with Whānau (external link)
• Episode 9 – Managing the Build Process (external link)
• Episode 10- Home Ownership and Land Retention (external link)

Financial modelling 

We have partnered with The Property Group to produce financial modelling tools to help new and aspiring PHO providers to get a clear understanding of how to:  

• assess whether households/whānau can afford to enter the scheme and achieve independent home ownership within 15 years, and  
• demonstrate that the development to build PHO homes is feasible, and if the project will have sufficient funding throughout the development process through to completion.  

 The financial modelling tools below are designed to be used for three types of PHO schemes: 

• shared equity 
• rent to buy 
• leasehold

PHO Approved Providers 

The following organisations are Approved PHO Providers (as at 6 February 2023) 

• Penina Trust
• Te Rūnanga o Ngāi Tahu
• Ōtautahi Community Housing Trust
• Whaakatu Whanaunga Trust
• Habitat For Humanity New Zealand Limited and their affiliate organisations around New Zealand
• Housing Foundation Limited
• Manawa PHO Limited
• Queenstown Lakes Community Housing Trust
• Doing Good Foundation
• Homes for People Foundation
• Te Ranga Maro
• The Brian Perry Charitable Trust/Bridge Housing Foundation
• Ka Uruora Aotearoa Trust 
•  Te Tahua o Rangitāne Ltd 
• Te Tumu Kāinga 

Progressive home ownership is already helping families into their first homes

We have supported the following providers:

You can track the progress of the PHO Fund in contracting and placing families in to their homes through our Government Housing Dashboard.