Foundation Home Loans has expanded its buy-to-let (BTL) criteria to now accept single household properties let to Housing Association and Local Authority tenants.
The lender said the move gives brokers and landlords more flexibility at a time when demand for social housing is rising due to affordability issues across the UK.
The change means both individual and limited company landlords can let eligible single household BTL properties and solutions products to tenants referred by Housing Associations or Local Authorities.
In England and Wales, the provider must be on the Government’s register of social housing providers and not be a charity.
In Scotland, the Housing Association or Local Authority must be on the Scottish Housing Regulator’s register, be a ‘local authority’ or ‘Registered Society – non charitable’ and listed as ‘Compliant’.
The maximum lease agreement is 60 months, with onward tenancies between Housing Associations or Local Authorities and tenants capped at 36 months.
Houses in multiple occupation (HMOs), supported accommodation, assisted living, hostels, nursing or care homes are not accepted.
There is a £3m maximum loan and rental assessment is based on the lower of contractual or open market rent, with specific requirements for break and make good clauses in tenancy agreements.
Foundation Home Loans said the change supports its aim of enabling home and property ambitions for all, while giving advisers the ability to place a wider range of cases.
Tom Jacob, director of product and marketing at Foundation Home Loans, said: “At Foundation, we are always looking for ways to broaden the opportunities available to brokers and their landlord clients.
“Accepting lettings to Housing Associations and Local Authority tenants is a natural step that supports landlords in achieving secure, predictable returns, while also helping to meet the critical demand for affordable housing.
“We want brokers to see us as their first choice for a wide variety of buy to let cases, whether that’s standard private rentals, more complex HMO or MUFB lending, and now, social housing arrangements.”
Jacob added: “With a clear process, minimal extra documentation, and support from our regional account managers, we’ve ensured this new option can be accessed by brokers with confidence.”
