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Affordable Housing Revolving Fund: Addressing an Early Stage of Development to Accelerate Affordable Rental Projects

19 Feb 2026

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This post was written by WoodGreen

Affordable housing continues to be a top priority across all levels of government in 2026. In the Greater Toronto Area, rental demand is projected to grow by 232,000 households during the next 10 years. Over the same period, there is expected to be a supply deficit of 121,000 rental units. Despite this demand, many developers building affordable rental units, both non-profit and private organizations, continue to run into financial bottlenecks of the significant scarcity of sufficient and reliable predevelopment financing, including upfront investment capital, which is critical to advance housing projects past the initial stage of development and into construction and debt financing stages.

These early-stage development anchors are not sufficiently covered by traditional lenders such as Canada Mortgage Housing Corporation (CMHC) or other lenders that focus on financing long-term debt. Currently, there are various ways of funding the early discovery and feasibility assessment stages of development, including private developer financing and “seed funding” from CMHC for non-profits. However, once a project moves to the municipal planning approval application stage, there is no support to cover the costs related to design-related work, studies, drawings, meetings and application fees, and all necessary technical and business case reports.

Frequently, there is an equity or investment gap that occurs in affordable housing project proformas that can be covered in the long-term debt phase or through secondary borrowing. These pre-development costs and upfront investment capital normally account for around 5-10% of total project costs, which if not covered, result in projects stalling. Financing this early development incubation phase is essential for getting affordable housing projects to the “shovel ready” stage.

The Affordable Housing Revolving Fund (AHRF) is a proposed province-wide fund model that would provide low-interest early-stage loans to affordable housing developers to support early-stage financing in the housing development process. Ultimately, this fund will jumpstart multiple projects and support the accelerated development of mixed income affordable housing projects at scale across the province.

What makes this model unique is that it would be a self-sustaining fund where short-term loans are repaid with moderate interest and reinvested into the AHRF for future projects.   A stable interest rate will keep costs down as well as create future predictable payments for borrowers yet allowing projects to move forward into the next stages of development.

WoodGreen Community Services (WoodGreen) and the Building Industry and Land Development Association (BILD) collaborated in the development of a report by global consultancy Arcadis to launch the Affordable Housing Revolving Fund in Ontario Report. The full report and executive summary can be found here. The full report provides case study analyses on Revolving fund examples across North America to identify how projects are currently being funded and their gaps and success rates, with all case studies showing great need and a reduced gap for what the Affordable Housing Revolving Fund can offer.

WoodGreen and other housing stakeholders continues to lead the advocacy efforts for this fund with the recently developed Affordable Housing Investment Fund Committee, led by developers, housing investors and non-profit housing leaders to continue championing and develop a proposal and business case for a provincially-backed fund that would support affordable housing projects. WoodGreen’s Vice-President, Housing Growth, Development and Asset Sustainability, Mwarigha, has supported the driven growth of the model’s development.

"With persistent undersupply of affordable rental housing in the GTA and other major cities and barriers to investment in the sector, the proposed Affordable Housing Revolving Fund is designed to attract private and impact investments to complement public funding at all government levels. This professionally managed, arm’s-length platform will pool institutional, private, and impact equity, enhance it with public credit, and deploy it into secure, long-term rental assets," Mwarigha says.

The Affordable Housing Revolving Fund will continue to be a highlighted discussion across the sector. For more information, please see the following media articles: