Key information
- Status: Open
- Grant amount: Variable from a total pool of $5.5 million
- Application opened: 8 October 2025
- Application closes: 12 December 2025, 5:00 pm
Program objective
The Low Cost Loans Initiative (LCLI) is a $20.9 million NSW Government initiative to support regional NSW and get more people into homes through the delivery of infrastructure earlier. It provides funding to reduce the cost of borrowings for critical enabling and supporting infrastructure so that land is development-ready sooner and available for new housing supply.
The LCLI will provide 95 regional councils with the opportunity to access funding to reduce the cost of interest on loan borrowings. The NSW Government will refund 50% of the costs of council’s interest payments on loans for eligible infrastructure.
The objectives of the Low Cost Loans Initiative are to:
- enable forward funding of local infrastructure by local government for the accelerated delivery of housing;
- provide councils with safe, cheaper finance subsidised by the NSW Government; and
- facilitate the quick delivery of infrastructure in new housing areas.
Priority will be given to projects that enable the delivery of new homes by 30 June 2029 to support the NSW Government’s housing completion targets.
This program is administered by Planning, Land Use, Housing and Strategy.
Eligibility
Who can apply
The Low Cost Loans Initiative: Round 4 is open to all 95 regional NSW councils outside of Greater Sydney, including Illawarra-Shoalhaven, Lower Hunter-Newcastle and Central Coast councils.
A single council or groups of 2 or more councils, such as joint organisation of councils, may apply. The Department encourages regional collaboration on projects that accelerate new housing supply.
To be eligible for the Low Cost Loans Initiative, regional NSW councils must meet the eligibility criteria:
Council has met the Office of Local Government key financial benchmarks and can access either a NSW Treasury Corporation (TCorp) loan or another commercial bank loan facility; and
- Council is building critical local infrastructure to enable the development of new private dwellings which are used primarily for residential purposes.
Loans must be for:
- an amount greater than $1 million
- have a fixed interest rate
- not exceed 20 years
- the purposes of capital expenditure only, not operating or recurrent annual expenditure
- capital expenditure on infrastructure works that enable housing development to proceed, or community infrastructure assets that support new housing
- be for infrastructure that directly enables land to be ready for development ready.
Location that are eligible include Albury City, Armidale Regional, Ballina, Balranald, Bathurst Regional, Bega Valley, Bellingen, Berrigan, Bland, Blayney, Bogan, Bourke, Brewarrina, Broken Hill, Byron, Cabonne, Carrathool, Central Coast, Central Darling, Cessnock, Clarence Valley, Cobar, Coffs Harbour, Coolamon, Coonamble, Cootamundra-Gundagai Regional, Cowra, Dubbo Regional, Dungog, Edward River, Eurobodalla, Federation, Forbes, Gilgandra, Glen Innes Severn, Goulburn Mulwaree, Greater Hume Shire, Griffith, Gunnedah, Gwydir, Hay, Hilltops, Inverell, Junee, Kempsey, Kiama, Kyogle, Lachlan, Lake Macquarie, Leeton, Lismore, Lithgow City, Liverpool Plains, Lockhart, Maitland, Mid-Coast, Mid-Western Regional, Moree Plains, Murray River, Murrumbidgee, Muswellbrook, Nambucca Valley, Narrabri, Narrandera, Narromine, Newcastle, Oberon, Orange, Parkes, Port Macquarie-Hastings, Port Stephens, Queanbeyan-Palerang Regional, Richmond Valley, Shellharbour, Shoalhaven, Singleton, Snowy Monaro Regional, Snowy Valleys, Tamworth Regional, Temora, Tenterfield, Tweed, Upper Hunter, Upper Lachlan Shire, Uralla, Wagga Wagga, Walcha, Walgett, Warren, Warrumbungle, Weddin, Wentworth, Wingecarribee, Wollondilly, Wollongong, Yass Valley
Types of projects funded under this grant
Low Cost Loans Initiative funding is only available for Council loans for projects which will enable the delivery of critical enabling infrastructure and/or supporting infrastructure that directly supports new housing.
Infrastructure projects may include, new roads, drainage, new or upgraded sewer treatment plant, new or upgraded water infrastructure, open space, sporting facilities, playing fields, libraries, community centres, pedestrian or cyclist facilities and playgrounds or land acquisition.
Councils must demonstrate that the infrastructure is enabling or supporting new housing supply by its inclusion in:
- council’s approved Contributions Plan; and/or
- an infrastructure needs analysis, servicing strategies, or a business case to substantiate that the infrastructure enables new housing supply.
Support will only be provided to reimburse the interest on borrowings for projects that are in a reasonably advanced stage of preparation. The application must include a realistic indication of the project delivery timetable and evidence of council approval for the project, such as a current Operational Plan or council minutes.
Where the infrastructure requires additional approvals, council should indicate its progress in obtaining approval or its intention to apply.
Councils must be able to demonstrate they have the necessary resources, including effective project management and sound administration, to deliver and maintain the project once completed.
What costs you can apply for
The Low Coast Loan Initiative will fund up to 50% of the interest on a fixed loan greater than $1 million and not exceeding a 20-year loan period.
What co-contributions are required
Priority will be given to projects which include a co-contribution from funds collected under Part 7 of EP&A Act 1979 or Section 64 of the Local Government Act 1993.
What your application needs to include
Prepare your application with this checklist
Councils should familiarise themselves with the grant requirements set out in the Low Cost Loans Initiative Program Guidelines.
Complete the application form in Smartygrants with reference to the objectives of the program and the eligibility and assessment criteria in the Guidelines.
Attach the required documents to the application form including:
- an approved Contributions Plan, infrastructure study or business case to justify the required infrastructure and nexus with new housing supply;
- evidence to support the proposed infrastructure is approved by the council;
- evidence that loan finance is in the process of being obtained;
- indicative Bank Term Sheet or Letter of Offer, including a loan repayment schedule; and
- a project plan including project scope, project budget, delivery timeframe, capability to deliver and governance and risk management.
Councils may provide additional documentation that supports the application for funding.
Address the eligibility criteria
Each applicant, as part of an application response, must confirm that they meet the eligibility criteria.
Applicants that do not address the eligibility criteria in full may be excluded from the application process at the department's discretion.
Address the assessment criteria
The Low Cost Loans Initiative: Round 4 expert panel will assess projects against the following criteria and give them a weighted score out of 100. projects will be ranked in order of merit.
Strategic alignment (weighting 20%)
The expert panel will consider:
- the need for the proposed infrastructure project in relation to the housing pipeline; and
- the extent to which the funding will accelerate the delivery of the infrastructure to support housing outcomes.
Housing impact (weighting 35%)
The expert panel will consider the impact of the proposed project, including the effect of the project in:
- the timeframe new housing is able to be delivered;
- the scale of project impact, including justified estimates of the number of homes the project will enable, accelerate or support; and
- driving housing that addresses community needs, such as diverse and affordable housing and housing of different sizes, types and tenures, including justified estimates of the number and type of affordable and diverse dwellings that the project will enable, accelerate and estimated delivery timeframe of housing supply.
Project delivery (weighting 25%)
The expert panel will consider how well the proposed project has been scoped, including how the application meets the sub-criteria below. The score for each sub criteria will be added together to calculate the total score for project delivery requirements.
- project scope (5%)
- project budget (5%)
- delivery timeframe (5%)
- capability to deliver (5%)
- governance and risk management (5%)
For detailed considerations under each sub-criteria, refer to the Guidelines.
Value for money (weighting 20%)
The expert panel will consider if the project is financially sound and provides value for money as follows:
- how the project will achieve value for money in the context of the available Low Cost Loans Initiative reimbursement, including council’s loan;
- the positive effect the grant will have on delivering the scope, timing and benefits of the project; and
- the likelihood of the project proceeding without the grant and the capacity of applicants to self-fund the project.
Priority will be given to projects which include a co-contribution from funds collected under Part 7 of EP&A Act 1979 or Section 64 of the Local Government Act 1993.
Start the application
Councils may submit more than one application providing each application is for a separate project and separate loan. Only one interest reimbursement will be paid per loan.
Applications may comprise of:
- a single project in one housing development area for example: new road, new sewerage station, an upgraded library or cycleway
- a group of different but related projects clustered in a single location – for example, the development of community facilities or town centre for a new housing area
- a group of projects of a single nature that can be packaged as one program – for example, open space in different sites needed to support a housing growth area.
Two or more councils partnering to deliver a project across LGA boundaries may make a joint application.
All participating councils must meet the eligibility requirements and provide a separate application with the required documentation as set out in these guidelines.
Each council must contract a separate loan to cover its share of the project cost.
Note: If you are a new applicant to SmartyGrants, you will need to register and create a password. If you are already registered, you can log in with your existing username and password.
Apply now
After the application is submitted
Successful applications will be decided by: Minister for Planning and Public Spaces
The Department of Planning, Housing and Infrastructure (the Department) will review each application received to ensure it meets all eligibility criteria and includes the information needed for the expert panel to consider the project.
All applications will be reviewed and assessed under an eligibility criteria and a weighted assessment. Councils must meet the eligibility criteria to progress to weighted assessment to be undertaken by an expert panel. All applications will then be provided with a weighted score out of 100. Projects will then be ranked in order of merit and subject to LCLI governance approvals.
An expert panel made up of independent third-party panelists and Departmental subject matter experts will assess all eligible applications against the program objectives and the criteria outlined in the Program Guidelines.
The expert panel will make recommendations to an interagency committee made up of NSW Government representatives for endorsement. The committee will include representatives from:
- the Department of Planning, Housing and Infrastructure
- the Office of Local Government
- NSW Treasury
- Transport for NSW.
The Minister for Planning and Public Spaces will make the final decision on the recommendations from the expert panel and interagency committee to award the grant funding.
Anticipated assessment outcome date is By 30 April 2026
Anticipated date for funding deed execution with successful applicants is By 31 May 2026
Support and contact
For queries about the Low Cost Loans Initiative Round 4 Guidelines, deadlines, or questions in the SmartyGrants form please contact DPHI staff between 9am-5pm Monday to Friday (excluding public holidays) at the LCLI Mailbox