Housing is fundamental to the welfare of all Australians. From a social perspective it promotes and improves employment, educational and health outcomes. From an economic perspective it is a driver of participation and productivity as well as consumption, investment and savings in the economy. Recognising the importance of affordable housing, the role it plays in the welfare of lower income households and the current significant housing pressures these households face, the Council on Federal Financial Relations asked the Affordable Housing Working Group (‘the Working Group’) to investigate innovative financing models aimed at improving the supply of affordable housing. The Working Group was asked to focus on models that attract private and institutional investment at scale into affordable housing and to report back to Heads of Treasuries on its findings and recommended next steps. The Working Group was tasked with looking at affordable rental housing, as distinct from the purchase of affordable housing. While not considered in this report, assisting lower income households with purchasing affordable housing remains an important and ongoing policy challenge, and may benefit from further consideration by governments. In an Issues Paper, released in February 2016, the Working Group canvassed four possible innovative finance models – a housing bond aggregator, a housing trust, housing co-operatives and social impact investing bonds. Through the paper, the Working Group sought feedback from stakeholders on the merits of the proposed models and to provide opportunities for other models to be considered.