Independent MP Helen Haines, who represents the Victorian seat of Indi, on Monday introduced a bill aimed at "unlocking" social and affordable housing in rural and regional areas.
The Unlocking Regional Housing bill would amend the National Housing Finance and Investment Corporation Act to ensure at least 30 per cent of funding goes to regional, rural and remote areas.
Ms Haines said the fund did not have any guaranteed funding for these areas.
"With almost 30 per cent of the population living outside major cities, regional Australians deserve their fair share of housing funding," she told parliament on Monday.
"I acknowledge the government has made multiple funding announcements for housing supply in recent months, but not one of these is dedicated to regional rural and remote Australia.
"There is a blind spot that I am seeking to fix. We need action now."
The $1 billion National Housing Infrastructure Facility was established in 2018 to distribute loans, grants and equity for new housing infrastructure and upgrades to existing homes.
However, most of its funding has been directed to urban areas which has prompted independent MP Andrew Gee to back Ms Haines' bill.
"The further you live away from the city, the more likely you are to miss out on the essentials and that includes housing," the Calare MP said.
"With a rising population comes rising pressure on housing, health care and essentials. Something must be done."
Nationals leader David Littleproud called the housing crisis "an abject failure of state and local governments", but believed regional areas were less affected than other parts of the country.
"There's still competitive tension for private capital in much of these larger regional centres, but rural and remote is where government should interfere and help," he told reporters.
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