Foundation Home Loans has expanded its buy-to-let criteria, now accepting single household properties let to Housing Association and Local Authority tenants.
The lender said this latest criteria enhancement gives brokers and their landlord clients further flexibility when structuring buy-to-let cases, particularly at a time when demand for social housing continues to grow.
For landlords, letting to Housing Associations or Local Authorities offers a number of advantages, including predictable income streams, a reduced risk of rental voids, and the added reassurance of tenant vetting and inspections handled by the provider. Lease agreements can be up to five years, providing consistent cashflow and longer-term stability.
Foundation’s new offering is available to individual and limited company landlords on eligible single household buy-to-let and Solutions products.
In England and Wales, the Housing Association and Local Authority must appear on the Government’s register of providers of social housing and must not be a charitable organisation.
For Scotland, the Housing Association and Local Authority must appear on the Scottish Housing Regulator register, with landlord type ‘local authority’ or ‘Registered Society - non charitable’, and be listed as ‘Compliant’.
The maximum lease agreement is 60 months and onward tenancy agreements between Housing Associations/Local Authorities and tenants cannot exceed 36 months.
Unacceptable tenancy types include HMOs, supported accommodation, assisted living/sheltered housing, hostels, nursing homes, or care homes.
A maximum loan of £3m applies and rental assessment is based on the lower of contractual or open market rent, with suitable break and make good clauses required in tenancy agreements.
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. 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."
