Housing in Southern Africa July 2016

housing giant, Fannie Mae, and pi- loting a second. The pilot was not a success for NHFC but demonstrated boldness in responding to the then market needs and being innovative by trying something that had never been done before. The Minister of Human Settle- ments announced that government was introducing a Mortgage Default Insurance (MDI) and that this would be implemented by the NHFC. The much heralded default insurance would hopefully unlock sustained banking mortgage financing in the affordable housing segment of the market. The MDI aimed at enhancing and expanding housing finance and addressing the constant challenge of affordability and accessibility for the Gap market. “The pilot project feasi- bility went well but as it was a new intervention in amortgage market, it required greater participation. Since MDI was neither abanking instrument nor insurance, but a blend of both mortgage and insurance, the banks were concerned about the financial discipline while the insurance com- panies looked at it from an entirely different perspective. We learned fromother developing countries that a product like this can take between eight and ten years to develop,” says Moraba. He adds, “The lesson learnt was not to focus too much, as we did, on the product as a game changer and market intervention, but more on other aspects, like ownership, techni- cal and implementation expertise on such an innovative product.” Moraba explains, “The Finance Linked Individual SubsidyProgramme (FLISP) is another product designed to yield dividends in the affordable housing sector by using subsidies to enable the Gap market income earners access homes. The product offers householders earning between R3 500 and R15 000 the opportunity to receive a government subsidy in the affordable housing market and bridge the gap between what the home owner qualifies for in terms of a bond and government provides the shortfall.” Moraba’s enthusiasm is infectious. He says: “Firstly, I love what I do. Secondly, the challenge of keep- ing NHFC going, relevant and growing in the delivery of its man- date, excites me. As a resource- ful and courageous person, I like the way we have, over the years in the life of NHFC, thought differ- ently about strategy, innovation and

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Foundation's Project of the Year Award and many accolades. Extending NHFC’s reach through partnerships and joint ventures such as inner city financing through the Trust for Urban Housing Finance (TUHF), facilitated through Hous- ing Investment Partners (HIP), has increased NHFC’s national reach and driven social change and a 2009 partnership and home ownership, respectively. NHFC’s stake in TUHF has reaped dividends for the state- owned DFI and has enabled TUHF to finance over R4 billion in inner city residential rental properties, finance 360 entrepreneurs and delivered 34 500 units. Strategic Partnerships In 2009, the NHFC forged Strategic Partnerships with Old Mutual Capi- tal Holdings. The following year, the French development agency (AFD), signed a 20million Euros funding deal withNHFC and a year later, concluded a 30million Euros deal with European Investment Bank, (EIB). In 2013, the NHFC partnered with International Housing Solutions (IHS) to leverage R10 billion worth of pri- vate sector funding to deliver 43 000 housing units, and create 158 000 jobs that will improve the quality of life of 163 400 beneficiaries. Moraba is proud that for more than 15 years, the NHFC has been a self-sustaining state-owned entity. “It is rewarding to consider the evolution of the organisation over time in the market changes, the gov- ernment imperatives, and the way in which we do things today is totally different,” says Moraba. He cites examples of creating mortgage backed securities based on a similar product by American

product offerings, in response to changes in the housing and housing finance markets and in the shareholder priorities. At the same time, I have the humility to accept that some of our risk-tak- ing initiatives have not yielded the desired impact, but have instead been stepping stones and insights

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