More than 100 developers and housing associations have submitted formal expressions of interest for a new £300m government scheme to bolster the housing market.

Under HomeBuy Direct, buyers can take out a loan for up to 30% of the price of their home, with half the money supplied by the developer and half by quango the Housing Corporation.

Developers have until 7 November to bid to include homes in the scheme.

John Slaughter, director of external affairs at the Home Builders Federation, said: “Our feeling is it works from every party’s point of view, so we are positive about supporting it and expect there will be quite a lot of interest from the industry.”

The scheme would involve buyers taking the equity loan on top of a mortgage. When the home is sold, the mortgage lender would be paid first. The Housing Corporation and developer would absorb any loss but could share in any profit.

Homes that qualify for the scheme must be reasonably spacious, although they will not have to meet the space standards for social housing. Developments must include a mix of one, two and three-bedroom properties, be close to transport and amenities and not be in areas with a high concentration of unsold homes.

David Cowans, chief executive of housing association Places for People, said the initiative looked to be “worth pursuing”.