The first beneficiaries of a £50 million investment in charitable bonds issued by social investment charity Allia have detailed to Scottish Housing News how they intend to use the funding to provide hundreds of new homes.

Housing associations Kingdom, Eildon, Orkney and Ayrshire will benefit from this year’s £25m bonds with a further £25m earmarked for 2016-17, the Scottish Government revealed yesterday.

Eildon Housing Association has been successful in securing £10m of borrowing through the Allia bond for the development of 210 new homes boosting the economy and the housing market in the Scottish Borders.

The loan is an unsecured loan backed by a bond which is at an attractive interest rate fixed for the full 10 year term. The bond was attractive to Eildon Housing Association because of the rate but also because it had negligible fees and costs to the association.

Eildon Housing Association will build 143 new homes in Galashiels, 49 in Newtown St Boswells and a further 18 in Kelso. All the 210 new homes will be for affordable rent which will all be on site and completed within the next three years.

Nile Istephan, Eildon Housing Association chief executive, said: “Eildon Housing Association are pleased to have secured £10m of loan finance from the Scottish Government through the Allia administered scheme. The deal makes sense for us as it provides a long term source of funding to grow our business and meet housing need in the Scottish Borders where demand for quality affordable homes continues to outstrip supply.

“The deal has been straightforward to arrange as it provides unsecured loan finance and fits well with our overall treasury management strategy. As a result of this funding we will be able to develop much needed new social rented homes in Galashiels, Newtown St Boswells and Kelso.”

Orkney Housing Association plans to use £2m Allia bond finance to support the development of 30 new affordable homes in Orkney over the next year as part of a £5m investment in local communities and the local economy.

This will include a second phase of 4 rented and 2 shared ownership homes in the rural village of Stenness, where the Association recently completed the first new affordable homes in the community for over 20 years. Four of these six properties will be family homes, bringing families to the area and continuing to support the local school and community.

Finance services manager, Sandy Dennison, said: “The attractive terms of the Allia bond have also enabled us to finance two additional schemes in our highest demand area - the island capital, Kirkwall. At ‘Burgar’s Bay’, we will develop 4 rented apartments, and a second phase at Walliwall will comprise 16 rented and 4 shared ownership properties. Again, the majority of these will be family homes.

“The cost of developing quality affordable housing in rural areas is a real challenge, and the terms and nature of the Allia finance have enabled us to develop in a way that would have been very difficult using traditional finance.

“We have been building quality homes in Orkney for 30 years, and through creative leadership by our finance and development teams, hope to continue developing well into the future.”

Ayrshire Housing Association said it will apply the first £1.6m tranche of the £10m facility to a 22 house development for rent in Ayr.

Plans for the site, on the junction of King Street and Limonds Wynd, were submitted in 2014.

Director Jim Whiston said it is likely that the Association will seek a further tranche for a small four unit infill development in the village of Dailly over the next few months.

Kingdom Housing Association detailed its plans to use £5.22m to build 116 new homes for the people of Fife here.