Housing in Southern Africa July 2016

assisted low and medium income households to buy land, renovate existing homes, or top-up their capi- tal subsidy with credit. Recognising the importance of accurate, reliable data and information, the NHFC also established a Policy and Research Unit. In addition, the Rural Housing Loan Fund and the Social Housing Foundation left the NHFC stable to operate independently.

Adapting to Market Needs

Not immune to changes in the mar- ketplace, in 2001 the NHFC restruc- tured its business to achieve a num- ber of objectives. The state-owned entity aggressively stimulated the low income primarymarket by increasing risk appetite. This significantly influ- enced retail intermediaries to create a continuum of housing finance op- tions tomeet the needs of low income households and beneficiaries. The corporation consolidated funding, streamlined operations, focused on delivery, facilitated a single-entry point for clients, and en- abled the creation and development of specialist providers with end-to- end housing finance options. These solutions included: Home Ownership – NHFC’s on and off Balance Sheet funding; Incremental Housing - urban renewal and housing infrastructure; and Alternative Tenure – social, rental housing and tenure options support- ing urban renewal strategy and com- munity integration. Highlights The NHFC deserves the credit for pioneering and financing social housing in South Africa. The state’s leading development finance arm in Human Settlements was called on to be a market maker, whether in social housing or inner city housing. Moraba states: “Wewill always take the great- er risk, where the private sector is risk averse. It needs someone to test the market, we go in first – that is why government is an enabler. We crowd in private sector, not crowd out.” Partnering with Implats on the Boitekong Project, a public private partnership with mining giant Im- plats, the NHFC provided end user finance to 2 000 employees and won the South African Housing Continued ▶▶▶

In 2002, the NHFCwas also appointed the project manager of the Pilot Project. In the first three years of business, the NHFC increased its presence in the low and middle income sectors. However, the biggest part of its port- folio was over 119 000 unsecured loans through Niche Market Lenders (NML), a micro finance vehicle and the Rural Housing Loan Fund (RHLF). NML advanced a credit facility to re- tail lending institutions that targeted the affordable housing market. The thrust of the NML fund shifted from a home improvement focus to ensur- ing that people without homes were enabled to acquire houses, either by purchasing an existing home or build- ing a new one. The corporation undertook the mammoth task of researching hous-

ing finance to Unblocking Finance for Affordable Housing in South Africa (UNFAH) and expose issues that could be verified, and create an understanding of the nature and scope of the problems that impeded the housing finance process. The first empirical national study findings altered the way in which the NHFC did business and three new product streams emerged. NHFC’s Alterna- tive Tenure Division provided project finance to emerging and sustainable social housing institutions, in order to develop tenure options other than immediate ownership. The Home Ownership Division funded intermediaries to facilitate ownership of affordable housing in the low andmedium income housing markets. The Incremental Housing Division funded niche lenders, who

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