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Rural and Islands Housing Funds

The £25 million Rural Housing Fund and the new £5 million Islands Housing Fund will run from 2016-17 to 2021. (These funds will now continue beyond March 2021, these pages will be updated shortly.)

Both funds aim to increase the supply of affordable housing of all tenures in rural Scotland and contribute to our 50,000 affordable homes target.

The Islands Housing Fund provides £5 million ring-fenced for islands housing projects.

The funds have two parts:

  1. a main fund that offers capital support (grants and loans) for direct provision of new affordable housing, and refurbishment of existing empty properties

  2. a small fund that contributes to feasibility studies 

Who can apply?

Both funds are open to a wide range of applicants including:

  • community organisations
  • development trusts
  • private landowners
  • private developers
  • traditional housing providers

Applications from individuals will not be accepted. Only organisations can apply.

Eligible projects must:

  • have a specific site or properties identified
  • be in an eligible rural area – levels 4, 5, and 6 of the six-fold urban/rural classification. Islands Housing Fund applications must be located on a Scottish Island
  • demonstrate evidence of housing pressure in the location identified
  • have the support of the relevant local authority
  • be prepared to undertake appropriate community engagement
  • be able to provide long term affordable housing

Applicants can apply for either the Rural Housing Fund or the Islands Housing Fund, not both.

More information, including details of the organisations and areas eligible to apply, is included in the Rural and Islands Housing Fund guidance.

Rural housing projects case studies

Projects have been approved across nine local authority areas through the Rural and Islands Housing Funds and you can read here about homes completed in Argyll and Bute, Comhairle nan Eilean Siar, Highland, Moray and Perth and Kinross.  

How to apply

Complete the pre-application eligibility check and, if eligible, complete the expression of interest form and send it to Please make clear in your covering email which fund you wish to register an interest for.

We aim to reply within 15 working days of receiving your expression of interest. If you are told you can apply you will need to fill out an application form.

Rural and Islands Housing Fund application forms

You will be invited to apply using either the:

Once you have been invited to apply there is no deadline to submit your application. Send it to us at and make it clear which fund you wish to apply for in your covering email.

We will assess applications on an ongoing basis. More information about the assessment process is set out in the fund guidance.

The application paperwork for both funds is reviewed regularly and is subject to change, so please check here regularly to make sure that the guidance and application paperwork you are using is up to date.

If you are considering applying for feasibility funding you should note that the funds can make up to a £10,000 contribution towards feasibility work, and that feasibility funding will be prioritised for projects that have more limited opportunity to access feasibility support.

A list of alternative sources of feasibility funding is provided for information.



Telephone: 0300 244 4000

Scottish Government
Housing and Social Justice Directorate
Victoria Quay

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