Finding Finance

The vast majority of community-led housing projects will need to seek funding to support the development of their project and create new homes. Most projects will seek funding from multiple sources.

Funding can come from a variety of sources including government grants, local community funds (particularly in areas with renewable energy developments), community fundraising initiatives, donations, and loans from banks and building societies. The financial viability of the project is dependent on whether the cost of the development and ongoing management costs can be covered by grants; loans raised on the basis of projected rental income; land and/or house sales; or other funds raised.

You will be expect to be able to show evidence of a need for the funding you are requesting at each stage of the project. Showing that you have assessed housing need and engaged with the community will be key to your success in obtaining funding.

Rural and Islands Housing Funds

The Rural and Islands Housing Funds accepts applications from a wide range of groups from development trusts, community organisations and private landowners as well as the more traditional housing providers.

The aim of the funds is to increase the supply of affordable housing to rent or to buy in rural Scotland through a grant and loan element. Both funds follow the same guidance but there is ring-fenced funding specifically for islands.

Assistance includes support for feasibility studies to help determine the viability of your idea.  At Rural Housing Scotland we are experts in helping communities examine the feasibility of community-led housing projects and developing their ideas. Contact Derek at for more information on how we can help.

Scottish Land Fund

The Scottish Land Fund (SLF) can support communities to buy land in order to develop a housing project. The current programme is open for applications until August 2020 and has an annual budget of £10 million. 

The fund supports projects that involve land and property ownership, that are community-led, community controlled and will deliver socio-economic impacts, and has a a team of advisers to help you build your project.

Stage one funding can support the costs of feasibility work to help you understand the viability of your ideas and the suitability of the land to be purchased and to prepare for a stage two application towards the costs of purchase.

The SLF’s Guidance Note for Projects Involving Housing sets out the circumstances in which the Scottish Land Fund (SLF) can consider support for projects that involve the provision of housing.

Watch the recording of our webinar session on the Scottish Land Fund from Sandra Holmes on our Funding for Community-Led Housing webinar page.


Many community-led housing projects rely on at least some private loan financing for the build stage of the project which is then paifd back using income from the sale or rental income from the new homes. Specialist lenders such as Ecology Building Society and Triodos have a wealth of experience of working with communities on community-led housing initiatives.

Watch the recording of our webinar session from Jon Lee of Ecology Building Society on our Funding for Community-Led Housing webinar page.

Charitable Trusts

Charitable trusts may be able to offer you support to develop your project. This might be particularly relevant for specific elements of your project which meet the criteria of the charitable trust, or in areas where commercial developments such as wind farms have an obligation on invest in the community.

Watch the recording of our webinar session on alternative funding streams from Derek Logie on our Funding for Community-Led Housing webinar page.

Funding for individuals

A community-led housing project may involve supporting individuals build or own their own affordable homes rather than someone building homes on their behalf.

The Croft House Grant Scheme is available to crofters wishing to build their own home. Since 2007 it has been possible to create new crofts on land that was not formerly croft land. The Isle of Eigg is one community which has chosen to create new crofts on community owned land to provide people with affordable self-build options.

Developer Commuted Sums

Local authority planning policies will normally expect any housing development to provide 25% of the homes as affordable housing. Where a developer is unable to provide this proportion of affordable housing, local authorities will sometimes accept a payment in lieu of this contribution – this is known as a commuted sum. Some local authorities require that this income is spent on housing projects in the area where the housing should have been built, whilst others will allow it to be spent anywhere in the council area.

Community Shares/ Crowdfunding/ Loan Stock

These new forms of finance offer considerable potential to enable the development of housing and could be utilised very effectively to support innovative projects. Further support on these options can be sourced from: Community Shares Scotland, and Rootstock.