OTTAWA - The federal government is turning to social finance to prod the development of unique projects designed to help fight poverty and homelessness in Canada.

Social Development Minister Jean-Yves Duclos says the new funding programs will help test and develop new ways to reduce homelessness.

Duclos says the money will go to projects that reduce or prevent homelessness among aboriginals, youth, women fleeing violence, and veterans.

The new funding programs will provide up to $25,000 in targeted "microgrants" to small scale projects, and up to $500,000 for large scale projects that will take place over the next two years.

The money will come out of $12.5 million the federal government set aside in this year's budget with $7.5 million of that flowing this fiscal year.

Duclos says the government knows it has to do things differently than it has in the past and is hoping the new programs will lead to new ideas to house and serve Canada's homeless.