Financial body a boost for housing
‘Quality of life of low- to middleincome households improved’
THE NATIONAL Housing Finance Corporation (NHFC) has recorded the highest number of project launches in a single year, making a difference in the lives of the many low- to middle-income households.
The NHFC was established by the Department of Housing as a development finance institution (DFI) in 1996, with the principal mandate of broadening and deepening access to affordable housing finance for t he l ow- t o middle- i ncome households.
Clients obtaining funding from NHFC cover a wide spectrum of the low- to middleincome housing market and require different levels of support and attention.
According to its 2011 annual report tabled in Parliament recently, the corporation’s projects division delivered 70 percent of its budgeted housing impact. The group profit before tax of R76 million increased marginally from 2010.
The NHFC’S impairment charge of 8.07 percent is higher than the budgeted figure of 5 percent, which indicates the increased risk taken by the corporation as a development finance institution. The profit before tax is 11 percent higher than last year.
This achievement was attained in spite of the effects of the overall economic downturn, particularly in the housing finance market, as well as the collapse of the credit and mortgage markets. This made lenders more risk averse and credit granted to households and business fell drastically.
NHFC chief executive Samson Moraba says that during the year under review, the corporation continued to be a catalyst in increasing private sector participation in the affordable housing market.
This was achieved either through the NHFC supporting its key clients to the point of graduation, or in the increased funding of new entities in the affordable housing space.
One area of developmental impact was the sourcing of alternative funding from the European Investment Bank (EIB) and French Development Agency (AFD) and allocating it to various inner city private and social rental projects.
As a result, a total of R388m was channelled into the human settlement space through this intervention.
“The NHFC has a significant contribution to make in two of the four Outcome 8 outputs, namely, the improving of property markets and making af f ordable rental housing accessible to low- and middlei ncome households,” says Moraba. “We owe much of our success to our clients and partners, through whom we were able to extend the reach and delivery of affordable housing finance to our target market.”
Outcome 8 is one of the 12 President’s Office projects established to improve the quality of life of South Africans by 2014. Outcome 8 covers delivery agreements on sustainable human settlements and improved quality of household life.
Among highlights captured by the NHFC is the progress made in the development of the mortgage default insurance operating model, that is backed by the R1 billion guarantee announced by the minister of human settlements. The loan portfolio of the NHFC’S strategic investment partner in the expansion of the inner city regeneration, Trust for Urban Housing Finance, has exceeded the R1 billion mark.