The Coalition government is considering the creation of a new affordable housing finance corporation to kick-start tens of millions of dollars in investment in community housing, in one of several major initiatives being examined for the federal budget.
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Work has been under way for months on new ways to fund community housing, using a so-called "bond aggregator" model, based on an approach taken in Britain.
Research on a bond aggregator model by the housing think-tank, the Australian Housing and Urban Research Institute, went to state and federal governments last December and the federal government will now create an implementation taskforce that will take charge of the plan.
Fairfax Media has been told by senior government sources the taskforce will closely examine the bond aggregator proposal, among others, to create an Affordable Housing Finance Corporation.
The institute's proposal would see the Corporation source large amounts of capital from the bond market - starting from $50 to $200 million - and then provide longer-term, lower-interest loans to the community housing sector.
Community housing providers, which provide affordable properties to rent, typically pay higher interest rates and have shorter terms in which to repay loans.
By assessing and then combining a series of loan applications from community housing groups, an AHFC could raise large sums of money at lower rates and for longer terms and then distribute the money, while lowering costs for community housing groups.
That, in turn, could kick-start the building of hundreds of new community houses at the lower end of the market, particularly in Sydney and Melbourne, and would assist people struggling to find an affordable home to rent.
Crucially, the AHFC would enjoy the backing of the federal government's balance sheet, but the proposal would not cost the federal government money - unless a provider defaulted on the loan.
Treasurer Scott Morrison will discuss the proposal with his state and territory counterparts in Canberra on Friday week.
And Mr Morrison is scheduled to deliver a major speech to the research institute in Melbourne on April 10, less than a month before the May budget is handed down, which will focus on the government's plans for the community housing sector.
Several government sources told Fairfax Media the institute's proposal to create a new housing finance corporation was being looked at closely, and that the Treasurer was "very engaged in this, he is very directly involved in its construction".
Mr Morrison has signalled the May budget will have a range of policy measures designed to tackle housing affordability, both for renters and for first home buyers, and in January ahead of a trip to study the British system, he hinted he was interested in implementing a similar government-backed bond vehicle.
Senior government ministers are still at loggerheads over whether to reduce capital gains tax concessions for housing, with Mr Morrison in favour and Finance Minister Mathias Cormann opposed to any change.
"Rent to buy" and shared equity housing models, both of which are used in Britain, are also being examined.
Another proposed to allow first-time buyers to use their superannuation as a home deposit has been discussed, though apparently the government has now cooled on this proposal.
In addition, the government has signalled that a separate pot of government money for affordable housing, the National Affordable Housing Agreement, could be scrapped with a savings of about $1.3 billion a year in payments to the states.
The last meeting of state and federal treasurers in December flagged the creation of the affordable housing taskforce. It is due to report back to the heads of state and federal treasuries by mid-2017.
Governments across Australia spend close to $11 billion a year on affordable and social housing, and Mr Morrison has said he is determined to ensure the money is better spent.
