FAMILY First Senator Bob Day will leave the senate as his building company Home Australia goes into administration.
The company is understood to have gone into liquidation today with more than 200 homes across the country still under construction.
ABC reports the company had losses of $1.2 million in 2013 and $3 million in 2014.
The South Australian senator said the failure of Home Australia will have "serious implications for me and my family".
"Creditor liabilities greatly exceed our assets, so we will also lose our family home," he said in a letter to Home Australia workers.
In Brisbane, Home Australia operated as Newstart Homes and Huxley Homes in Sydney.
Full statement that was sent to the Australian newspaper regarding their Home Australia stories. I stepped back in to help out. pic.twitter.com/cFhzNZ54wY— Bob Day (@senatorbobday) September 28, 2016
Senator Day was re-elected to a three-year term in the Senate in July.
Family First will meet this week to select a successor to Mr Day.