The AOFM yesterday spelled out its approach to the planned investment of a further $8 billion of home loans and some business loans next year. This will be the third round of AOFM funding to prop up smaller lenders stranded by the near demise of the machinery of securitisation in 2008.Lenders will have to take investment proposals to the AOFM on their own initiative, while the AOFM will be looking to fund some lenders on what it described as a "pipeline" basis in some cases.The idea is to help restore funding flows for mortgage financers previously dependent on securitisation.This sounds like non-bank entities sch as FirstMac, Resimac and Liberty are all candidates for additional rounds of funding. One or two building societies might also have a case under this approach, though it was always curious that Heritage obtained no funding from the AOFM this year (and maybe they did not apply).The AOFM said it will "aim to support competition in residential mortgage lending from a diverse range of lenders" so credit unions may also get a look in.As reported yesterday, year-to-date placement of mortgage-backed securities is $12 billion, with the AOFM the investor in most of that paper, though some independent funding has been taking place recently.