Last year £10m was invested in charitable bonds to support Castle Rock Edinvar Housing Association, which helped fund an Edinburgh development.
Using the bonds, which can only be utilised as a loan and equity investment, the government will invest in an upfront donation for affordable housing by providing a loan to a social housing provider with a repayment date of 10 years.
Through the bonds £7.3m will be generated to deliver more than 125 social rented properties, while £17.7m of loan funding will be provided to support housing associations build over 300 social homes.
Neil said: “Charitable bonds represent the type of fresh thinking that is helping increase the supply of affordable homes and is supporting our construction industry.
“Last year, with a £10m investment, we became the only government in the UK to invest in these bonds.
“Next year, our £25m investment will evolve our approach, using the financing model to direct the grant and the loan to support the provision of much-needed affordable housing across the country.
He added: “Through our partners in councils and housing associations, we have now delivered more than 21,000 affordable homes and are two-thirds of the way towards our target of 30,000.
“We have boosted housing supply budgets by investing £1.7bn in affordable housing over the lifetime of this Parliament.
“Our house building rates, per head, continue to outperform other parts of the UK.”
The Scottish government’s housing supply budget will increase by £200m next year, supporting at least 6,500 jobs.
Heather Macnaughton, head of community investment at Castle Rock Edinvar, added: “We are delighted that there is further funding being made available to develop the use of the charitable bond model in Scotland, to increase finance available for affordable housing.
“Continued financial innovation by the sector is required to maximise the return on the Scottish government’s investment and deliver housing that is affordable to everyone.”
