housing - National Housing Finance Corporation

CHIEF EXECUTIVE’S REPORT CONTINUED
NHFC assisted in the drafting of the Home Loans and
Mortgages Disclosure Act (HLMDA), which was
promulgated in 2000.
Cumulatively, NHFC disbursements had, by then, also
exceeded the R1 billion mark.
That year also saw NHFC undertake a most intensive
and extensive housing finance research project. The
Unblocking Finance for Affordable Housing in South
Africa (UNFAH) sought to:
u create an understanding of the nature and scope of
problems that impeded the housing finance process;
identify any blockages in the housing finance delivery
process; and
u expose issues that would be verified scientifically by
conducting periodic end-user surveys.
UNFAH findings pointed to the need for NHFC to alter
the way in which it did business if it desired maximum
impact. So, in 2001 NHFC was restructured. The
existing operational units were coalesced into three new
product streams:
u Home Ownership (HOD) to facilitate the ownership
of affordable homes by funding intermediaries whose
business it was to expand home ownership among
low and medium-income households;
u Alternative Tenure (AT) to provide project finance to
emerging and sustainable social housing institutions
in order to develop tenure options other than
immediate ownership; and,
u Incremental Housing (IH) to fund niche lenders who
assisted low and medium-income households with
loans to buy land, renovate existing homes or top up
their capital subsidy with credit.
Recognising the importance of accurate and reliable
data and information, the Corporation also established
a Policy and Research unit.
RHLF and SHF left the NHFC stable and went their
separate ways.
NHFC was intrinsically involved in the conceptualisation
and drafting of anti-redlining legislation, which all nine
NEDLAC constituencies agreed to support at a Financial
Sector Summit in August 2002. The Community
Reinvestment (Housing) Bill was published in the
Government Gazette for public comment on 17 May 2002.
Purporting to change the whole housing finance
landscape, the Financial Sector Charter was signed on
17 October 2003. Initially, this initiative pledged
R20 billion, and then R42 billion, to low-income housing
over a five-year period beginning on 1 January 2004.
NHFC served as a key resource to the National
Department of Housing in its deliberations with the
banks. Cabinet agreed to withhold the promulgation of
the Community Reinvestment (Housing) Bill to give the
Financial Sector Charter a chance. On 31 March 2005,
the new Minister of Housing, Dr Lindiwe Sisulu, signed
a Memorandum of Understanding with the CEOs of the
four major banks and the Managing Director of the
Banking Association of South Africa.
In 2003, NHFC commissioned its first Corporate Impact
Study and undertook a ground-breaking Rental Default
Study. It also assisted the National Department of
Housing to set up the Office of Disclosure to administer
the reports required under the Home Loans and
Mortgages Disclosure Act.
An additional milestone for the Corporation is the critical
role it played in the transformation of ICHUT, now
known as the Trust for Urban Housing Finance (TUHF),
into a respected housing development finance institution,
which conducts financing of private landlords involved in
inner city housing projects. The Corporation provided
concessionary funding of R10 million in 2003 that saw
TUHF being able to raise further debt funding in excess
of R250 million by 2006. TUHF has contributed 5 836
units towards the NHFC housing impact to date.
NHFC spearheaded the establishment of the Social
Housing Support Programme; contributed to the
formulation of the Breaking New Ground main document;
and served on the advisory committees of the National
Credit Bill, Dedicated Banks Bill and Co-operatives
Banks Bill.
The development of a housing project in Kliptown was
in commemoration of the signing of the Freedom
10 NHFC ANNUAL REPORT 2006