Tasmania tables bill to guarantee bank loans on modular homes

Tasmanian Treasurer Eric Abetz tabled the Modular Housing Finance Guarantee Bill 2026 in the House of Assembly on 28 October, proposing a state guarantee on bank loans written against homes that are still being built in a factory rather than on a block of land, Built Offsite reported.

Why it matters

Modular and offsite builders in Tasmania have faced a financing gap that conventional home loans do not solve. A standard construction loan is secured against the home once it sits on its site, but much of a modular home’s value is created in a factory before it is delivered and installed, so the dwelling cannot serve as conventional mortgage security during manufacturing. The Bill addresses that gap directly: it would let the Treasurer guarantee repayment of money borrowed under eligible loan agreements, with limits still to be set by regulation, so a lender carries a state backed fallback while the home exists only as factory stock rather than a finished, site based property.

The guarantee sits behind the lender’s own checks, not in place of them. Borrowers would still be assessed on creditworthiness and their ability to service the loan in the normal way; the Bill changes what a lender can rely on if that borrower defaults, not who qualifies for a loan in the first place. Under section 5, an eligible home must also be built or assembled in Tasmania by an approved builder, and section 7 requires the responsible minister to publish the approved builder list. For Tasmania’s offsite and modular sector, a state backstop on construction period finance responds to a barrier the government says it heard in consultation with lenders and housing manufacturers. It arrives as the state’s wider housing finance settings come under pressure: The Australian Developer reported on 1 November that Homes Tasmania has fully drawn its $546 million debt ceiling funding its own build program, a reminder that both the public and private sides of Tasmanian housing finance are stretched.

The numbers

The Bill was tabled on 28 October, following the government’s earlier commitment to the scheme. Section 8 gives the Treasurer the power to guarantee eligible loans up to limits that will be set by regulation rather than fixed in the Bill itself, and those limits, together with which lenders can take part in the scheme, have not been released. No guarantee cap or loan volume figure has been made public, and no approved builder list under section 7 has been reported yet, leaving the scale of the scheme genuinely open until the regulations follow.

What’s next

The Bill still needs to pass both the House of Assembly and the Legislative Council before it has any effect, and would commence only on Royal Assent, the formal step where the Governor signs a passed Bill into law. Abetz said the government had “listened to industry, worked closely with lenders” in shaping the scheme. Until the regulations setting guarantee limits are drafted and the approved builder list is published, Tasmanian modular builders will not know which lenders are participating or how large a guarantee they can draw on against a construction loan. No private modular builder or developer has been named in connection with the Bill so far; the scheme as introduced is a financing mechanism for the sector generally, not a deal tied to any single company.