Title: Presentation to the National Council of Provinces
1- Presentation to the National Council of Provinces
- 12 JUNE 2002
2Agenda
- Mandate and Mission
- NHFC Context (as Gazetted)
- NHFC Primary Responsibilities
- The External Environment
- The Housing Finance System - SA
- The Housing Institutional Environment
- Strategies and Action Plans
- Conclusion
3Mandate
- In partnerships with the broadest range of
organisations, to search for new and better ways
to mobilise finance for housing, from sources
outside the state... - The corporations endeavours should in time
ensure that every South African with a regular
source of income can gain access to finance for
buying or renting or incrementally building or
improving his/her own home
4Mission
- The NHFC seeks to create housing opportunities
for the low and moderate income families by - Funding or Underwriting the funding of
intermediaries and institutions to promote
broader access to housing and housing finance - Facilitate the building of Adequate and
Sustainable capacity within the organisations and
institutions that it funds - Partnering organisations and institutions to
deliver innovative housing finance solution
options
5NHFC Primary Responsibilities
- Stimulate the Primary and the Secondary market
in the low and moderate income housing sector - Provide alternative need- based housing finance
products and financial packages- - mortgage and non- mortgage products (loan
discounting and purchasing from lenders, direct
intermediary funding) - rental product options (project financing for
rental or rent to buy and installment sale) - provide credit to lower income earners building
or developing properties incrementally
PHP, individual initiatives and through rapid
land release (generally micro-finance)
6NHFC Primary Responsibilities
- Undertake the funding as a wholesale
intermediary and act as a fund manager - Specialise in identifying, assessing, pricing,
monitoring and managing the risks associated with
the placement of funds - Research and Product development
7NHFC Primary Responsibilities
- Stimulate the Primary and the Secondary market
in the low and moderate income housing sector
(contd.) - On-going product development
- Support management capacity of niche lenders
- Promote and develop partnerships with financial
institutions and other stakeholders to improve
financing capacity to income groups
8Overview of the Operating Environment
- External Environment
- Shrinkage of the housing finance delivery
channels into the NHFCs target market - Demise of small banks Saambou, Unifer, FBC, etc.
- Market Consolidation e.g. Cashbank
- Inadequate capacity of niche lenders to
take-over the increased gap to finance - Negative impact of Unemployment and HIV/AIDS
- High-risk perceptions of the Low and Moderate
income financing sector Cost of funds high
9Overview of the Operating Environment
- External Environment(contd)
- Housing Policy HLMDA, CRA and evolving policy
on Social Housing - Zero Transfer duty on less R 100 000 house value
and - Stamp duty abolished for certain mortgage
transactions between institutions - Stability of some of the niche lenders in long
term funding emerging - Alternative tenure options for the end
beneficiaries
10The SA Housing Finance System
Capital Markets (Banks, Investors, Life/Pension
Funds
Parastatals (other DFIs)
Govt
REGULATION
Loan secured by property, lower LTV ratios
Non Mortgage Security
Lending Institutions
BANKS
NON- BANKS
NGOs
LOAN ORIGINATION
Subsidy Beneficiaries
LOAN SERVICING
Depositors
Borrowers
11The Housing Institutional Environment
Funding or Guarantee the Funding
Own
Financial intermediary
Rent
RURAL HOUSING LOAN FUND
Rural Micro-Finance
Capacity Building
SOCIAL HOUSINIG FOUNDATION
Mobilisation of Construction Funding
NHBRC
Ensure Quality Housing
DEVELOPER (Bridging Finance)
End-user Guarantees
NURCHA
Stabilising the Housing Environment
Servcon
THUBELISHA
Property in Possession
Right sizing
12Strategies and Action Plans
- Prudently, grow the lending business of the
Corporation and thus improve on its housing
delivery impact - Increase the number of housing institutions and
lenders across all Provinces - Facilitate the development of capacity of
Housing Institutions, Primary and Niche Lenders
(Standards and Guidelines) - Continuously enhance the Risk Management capacity
and competency of both the NHFC anud or clients - Accelerate the medium density housing
development thru the Job Summit Social Rental
Housing Project - Continue to pilot pragmatic PPP models that will
deliver - Affordability
- Value for Money, and
- Risk Sharing
- Proactively undertake Housing Finance Research
and Product Development
13THANK YOU
14 QUESTIONS
15Undertaking Wholesale Funding
NHFCs Performance
16NHFC Housing Impact TO-DATE
NHFCs Performance
HOUSING IMPACT TOTAL TO DATE
Complete housing units financed 80, 397
Incremental housing loans granted 489 480
Number of people benefited 2,47 million
17Budget Highlights
- Priorities of the Corporation
- Prudently, grow the lending business of the
Corporation and thus improve on its housing
delivery impact - Continuously enhance the Corporations Risk
Management capacity and competency - Attain accelerated delivery on the Job Summit
Pilot Project - Effectively implement the Corporations processes
and systems Drive Speed, Flexibility and Impact - Focus on the need to challenge, develop and
retain the best people in the Corporation - Improve the Corporations Marketing and
Communication with all its Stakeholders
18Budget Overview 2002/5
- Deliver housing finance to a cumulative total of
334,000 households (of which 30,500 new and
7,500 existing houses) in most provinces - Facilitate the building of capacity in the
housing and housing finance sector by supporting
11 new and emerging housing finance
intermediaries and housing institutions - Change the housing finance environment through
promoting new loan products, relevant delivery
channels, supporting appropriate regulatory
policy frameworks and new housing options.