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Photograph: Bloomberg/Bloomberg via Getty Images Wednesday 22 February 2017 21.26EST Last modified on Wednesday 22 February 2017 21.28EST The Victorian government will use its borrowing power to act as guarantor for up to $1bn worth of low-interest loans to help registered housing associations secure new social and affordable housing stock. The initiative, called the Social Housing doctor home loan rate Oak Laurel Growth Fund, is an Australian first, and is a collaboration between government and private and philanthropic sectors which the government says will ultimately support up to 2,200 vulnerable households. Related: 'I'm a beautiful person': Melbourne's pilloried homeless people speak The minister for housing, disability and ageing, Martin Foley, told reporters on Thursday that the move would help address rising rates of homelessness. The fund has been established using capital provided by the government, he said, and the returns will be used as a funding stream for social housing projects. By acting as guarantor, the government will help housing associations spend less on interest. The savings can then be directed to helping subsidise their rent or secure affordable housing. The fund marks the release of the first part of the Victorian governments housing affordability strategy, with further announcements expected over the coming weeks. Related: Axing housing agreement would be unmitigated disaster for homeless Victoria Council of Social Service CEO, Emma King, said her organisation had been advocating for a social housing fund for years. This is very significant, she said. This will save lives. Social housing is the greatest ammunition we have in dealing with poverty and disadvantage in Victoria. Foley said the Victorian government would also push the commonwealth for a long-term commitment to the National Affordable Housing Agreement .