In Finland, affordable social housing is mainly provided by municipally owned companies and nationwide non-profit organisations. Affordable social housing can be financed in two ways. The first is through interest subsidy loans. The state guarantees these loans and pays their interest subsidies. The second is through loans municipally owned companies take out from MuniFin for affordable social housing. These loans do not have a state interest subsidy, but they come with a 100% municipal guarantee.
The Finnish government updated its housing policy development programme in 2021. Some of the main objectives of this programme include increasing housing construction in growing urban areas and eradicating homelessness within two government terms. Affordable social housing has played a remarkable role in tackling homelessness in Finland, especially family homelessness. Affordable social housing is also instrumental in preventing segregation and facilitating labour mobility.
Read more about Finland’s affordable social housing system in this article: Finnish system for affordable social housing supports social mixing and brings down homelessness – MuniFin
MuniFin is the main financier of affordable social housing production in Finland. In affordable social housing, the loan periods are long, up to 41 years. Interest subsidy loans are guaranteed by the State of Finland through the Housing Finance and Development Centre of Finland (Ara), which is administered by the Ministry of the Environment and has a major role in implementing Finnish housing policy. Loans granted to municipally owned companies can also be guaranteed by municipalities.
Ara nominates the non-profit organisations entitled to receive interest subsidy loans and maintains a list of them. Ara also grants subsidies, grants and guarantees for housing and construction and controls and supervises the use of the Ara housing stock. By virtue of legislation, tenants for social rental dwellings are selected on the basis of social appropriateness and financial need. More detailed criteria are specified annually by the government. Tenant selection procedures for municipally guaranteed housing are determined and supervised by the municipalities.