The National Rental Affordability Scheme (NRAS) is a federally funded initiative giving incentives to housing providers, which then rent properties to low to middle income earners for at least 20 per cent below market rates.

Investors can access the scheme, which started in 2008, for up to 10 years.

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Its aim was to boost the number of affordable rentals in the country, however was axed by the Abbott government in 2014.

There will be no homes left in the scheme by the middle of 2026, and Fairy Meadow mother-of-one Lisa Malone is fearing for the worst.

The property she rents will leave the scheme in 2024, meaning Ms Malone will either face increased rents or be forced to compete in an impossible market.

"I'm a single mum and although I work full-time I'm still within the mid-income earning range," she said, adding she has struggled to secure a loan due to these circumstances.

"We could basically be left homeless ... especially in this current market.

"I have a camper van that's got a mini kitchen and a small bed that we got for cheap holidays.

"I was looking to sell it but then I thought I better not, because it might become my home."

According to the latest figures, 605 homes will leave the NRAS in NSW next year, and 1140 in 2024.

There are about 27000 households supported by the scheme nationally.

The Housing Trust has 71 homes it manages under the scheme across the Illawarra Shoalhaven, according to CEO Michele Adair.

With no plan to replace NRAS, Ms Malone and Ms Adair agree tenants could be forced into homelessness as the rental crisis continues to grip the Illawarra.

"There could be tens of thousands joining the list of those already homeless or in extreme housing stress," Ms Adair said.

"We simply don't have any vacancies for those in the Illawarra, Shoalhaven or across Australia.

"Where there are vacancies, people are in open bidding wars and we're talking about people on low to moderate incomes, and their incomes have not changed.

"This crisis has deepened around them as the scheme comes to an end."

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Ms Adair said the Housing Trust has put plans in place to supplement the loss of income that will hit in the next two years, but is concerned for those renting privately under the scheme.

"We have notified all of our tenants that they are completely safe and won't have any changes at all," Ms Adair said.

"Unfortunately, for those renting from private landlords, there is no such guarantee."

As at December 2022, the average weekly rent in Wollongong sits at $571 per week, property analysts SQM Research revealed, with vacancy rates sitting at 0.9 per cent.

Ms Adair believes the federal government should have extended the subsidy for at least three years until the new housing policies can either replace or supplement security to those living in properties under the scheme.

"It really is of very significant additional concern the government has not put plans in place to be able to support those tenants due to the deteriorating situation," she said.

"There has been legitimate criticisms to the NRAS but however it is much easier and faster than to fix some of those administrative problems rather than make plans and build homes to replace them."

Member for Cunningham Alison Byrnes acknowledged the difficulties Illawarra renters are facing and added it was "hard to go back in time" to reverse the Abbott government's decision to axe the scheme.

"Labor's agenda going forward is a very bold and targeted plan including building one million homes," Ms Byrnes said.

"We're also investing in social housing, affordable housing, the rent to buy regional home buyer's assistance.

"But obviously it's not a problem that can be solved very quickly overnight."

Ms Byrnes added the federal government's national housing accord will also set short, medium and long-term goals to improve housing outcomes across Australia.

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