The role of The National Building Fund in the financing model
Renovations and developments in the existing stock can be supported by The National Building Fund, which works as a saving for the entire social housing sector. The savings begin when the mortgage loan is paid off.
Instead of decreasing the rent with the amount used to pay off the mortgage, this amount contributes to the savings. Two-thirds of the amount is paid to The National Building Fund.
Support from The National Building Fund is obtained through applications submitted by the housing organizations. Support is then allocated based on objective criteria.
Social housing is non-profit and it's construction is financed in part by public funds from both the municipalities and the State.
The system is a closed circuit and ensures that future renovation expenses are covered in the startup phase of financing new social housing.
What is the relation between The National Building Fund and the Danish Parliament?
However, the Fund's level and areas of investments are laid down in political agreements made every four years by the Danish Parliament.
The National Building Fund is thus regulated by law, but financed by the tenants.