The Government is opening up the $1 billion of the Housing Acceleration Fund "to enable more homes to be built at pace and scale".
Housing Minister Megan Woods said the $1b 'Infrastructure Acceleration Fund' is set to "jump-start housing developments by funding necessary services, like roads and pipes to homes, which are currently holding up development".
The Government announced the overall $3.8b housing fund in March as part of the package to help speed up new builds.
The fund intended to go to a mix of private and Government development of housing, with additional money going to increasing the use of vacant or underutilised Crown-owned land for housing.
"Investment in infrastructure was identified by local councils and others as one of the key actions the Government can take to increase the supply of housing in the short term," Woods said.
"It is available to councils, iwi and developers to start pitching for infrastructure funding, with successful projects weighted toward bringing on multiple, affordable new homes quickly and in the right places; in urban centres as well as in the regions," Woods said, with the fund opening on June 30.
The Government expected about 200 new homes in places such as Auckland, Tauranga, Wellington and Christchurch, and 100 new homes in smaller places such as Rotorua, Palmerston North and Nelson.
"In order to bring on significant new supply we need to fund larger scale projects in large urban areas, as well as smaller scale projects outside of the main centres, where there is also a housing shortage," Woods said.
The infrastructure funding would prioritise funding for council, iwi and developers for development including where infrastructure investments might not be funded or not funded quickly enough to meet housing demand and construction activity.
"Final decisions are yet to be made on how the full Housing Acceleration Fund (which has already ring fenced $350 million for a Māori Infrastructure Fund) will be used, and we’ll also be looking at how to best build upon what we’ve started in our Large Scale Projects, which are already transforming the urban environment," Woods said.