Impact Stories
Community Housing Funding Agency (CHFA)
New Zealand’s acute lack of affordable and social housing remains one of the biggest societal challenges of our time.
While recent cuts to the OCR should open more front doors to first-time buyers, a relatively high proportion of Kiwis still find themselves unable to get on the housing ladder.
A recent report by the Salvation Army showed how dire the problem has become: “Four out of every 10 communities have high rental unaffordability (over 30% median income), hitting those on low incomes hardest.” [1]
Likewise, the most-recent census data pointed to a 37% increase in the number of homeless New Zealanders [2]. While several factors may have contributed to this, an unaffordable housing market and scarce community housing options, certainly won’t have helped.
Given the need to remedy this housing pain, we were excited by the opportunity to invest in a new social bond from the Community Housing Funding Agency (CHFA). In our view, it’s a great example of the proactive role that ethical investors can play in helping to shape a better future for our communities.
What is the CHFA?
The CHFA is an organisation that was set up in 2024 by Community Finance – a name that might ring a bell if you recall our previous Impact Story.
Their goal is to secure the funding needed to build more affordable housing. In simple terms, they’re a bit like a ‘middle man’. For the affordable housing providers, the organisation appeals because it can secure the large sums of money needed for them to do their work. While for investors, it blends the potential for financial return with helping to drive positive societal change.
In their own words, the “CHFA is New Zealand’s leading lender to the community and affordable housing sector, bringing market discipline and social purpose together to invest in our future and our country.” [3]
Explaining the ‘social bond’
As a reminder, a bond is an asset class that acts a bit like an IOU for investors.
They appeal because the bond issuer typically commits to two things: Giving investors their money back at a pre-determined date (known as maturity date) and paying them interest on top.
Bonds can also act as a diversifier in portfolios and funds, as they usually offer protection against stock market volatility. If you’d like to know more about the asset class, check out this page on our site.
With regards to CHFA’s bond, it is a certified social bond [4]; the very first-of-its-kind from the agency. Overall, it raised NZ $200 million for housing developments in Aotearoa New Zealand. A total of 19 different investors, of which Pathfinder was one, collectively invested $100 million for the 3-year term bond, and $100 million for the 5-year term bond [5].
The investment case
At Pathfinder, we invested in the 5-year term CHFA bond through our ‘Wholesale Ethical Fixed Income Fund’. At the time of writing (October 2025), the bond is held in all of Pathfinder’s KiwiSaver Funds, as well as in our ‘Ethical Growth Fund’.
The desire to help remedy NZ’s affordable housing crisis was a major driver in our decision to invest but it wasn’t the only factor. When investing on behalf of our members, our Investment Team needs to be comfortable that the purpose and the return potential complement each other. Purpose alone won’t motivate us to invest.
In the case of the CHFA ‘social bond’, we were reassured by the fact it secured a strong A+ credit rating from S&P Global – one the world’s key institutions that helps investors determine the quality of an asset/s. That meant it was independently judged to be an issuer with the capacity to meet its financial obligations and deliver on its objectives for investors.
The CHFA is also managed by Community Finance, an entity that we have historically invested in (and therefore have evidence-based faith in).
A few final thoughts
At Pathfinder, two of our four Principles are “Be change makers”, and, “Be good ancestors”.
In that sense, the opportunity to play a positive, proactive role in remedying NZ’s community and affordable housing crisis is one that we can definitely get onside with.
As the old saying goes, ‘home is where the heart is’. And with purpose-driven investment opportunities like the CHFA social bond, there’s hope that more Kiwis will have the opportunity to have a home (and we love that).
If it’s successful, it should also lay the foundations for similar investment opportunities further down the line.