The trust fund venture has been started by a group of parents and supporters of the tiny rural school, which like many in the Upper Clutha district has experienced significant pupil roll growth during recent years.
Hawea Flat School Fundraising Trust chairwoman Lindsey Schofield said the new venture would help provide the burgeoning school with extra financing needed for "shortfalls" not covered by Ministry of Education funding.
Trustees had come up with the idea of building a house for auction as a way to raise capital, after seeing a similar initiative used to help bail out a struggling Wanakafest trust last year.
The trust approached Wanakafest sponsors Willowridge Developments and its company director Allan Dippie with their proposal, she said.
They were offered a section at Willowridge's Lake Hawea subdivision Timsfield for a reduced price and moves were now under way for builders and contractors to begin work on a house soon, she said.
"We're really excited about what is ahead of us. We have a lot of tradesmen, contractors, and businesses who have all come forward to help," Ms Schofield said.
A house built at Willowridge's West Wanaka subdivision for the Wanakfest trust was sold at auction for $486,000 in October.
"We're aiming to have the house built at a fraction of its usual cost, thanks to the support of local building supply companies and contractors," Ms Schofield said.
The Timsfield Home Front Project has a goal of raising $100,000 to set up a capital fund from the house auction proceeds, Ms Schofield said.
The capital fund would be invested and the proceeds then used for projects at the growing Hawea Flat school, which has a number of "significant future financial hurdles" ahead of it, she said.
Categorised as a decile 10 school, Hawea Flat is in the middle of an expansion plan, which has seen two new classrooms built during the past year, with another earmarked for construction next term.
However, the school's decile 10 ranking meant only minimal funding was allocated for projects outside of classroom construction work, Ms Schofield said.
Projects the trust's funds would help cover include upgrading the school's pool, improving computers and technology for pupils, and "everyday costs" such as grounds maintenance.
The school has a roll of 148 pupils, which is projected to rise up to 165 pupils by the end of the year.
