NHFC Finance :: Finance partner :: Funding Programs
As a FINANCIER, the NHFC offers the following broad Housing Finance solutions, through the PROJECTS Division:
- Project Finance/Term Loan: minimum 3years - maximum 20years term loan
o 3/5years Bridging Loan applies, mainly, to Developers
o 10/15 years Medium Term Loan applies to Private Property Practitioners
o 20 years Long Term Loan applies mainly to Social Housing (Rental Projects)
- Revolving Credit Facility: up to 5years term period
- Senior and Mezzanine Loans: up to 10years applies, mainly, to Private Sector Institutions
Through the Projects Division, the NHFC provides Housing Project Finance and/or Project Facilitation expertise to the following entities:
· Social Housing Institutions (SHI), to develop housing projects, which offer the middle-income households earning between R3 000 and R15 000 per month, access to rental housing
· Property Practitioners (Developers/Landlords) to buy and/or refurbish existing buildings; or Greenfields housing developments for affordable rental or sale purposes
· Private Sector Institutions or municipal entities set up by Local/Provincial Authorities to fulfil their housing mandate
Social Housing Institutions:
The NHFC, together with the Social Housing Regulatory Authority (SHRA), the Human Settlements (National, Provincial & Local Municipal) Departments and some international players have over the years developed the Social Rental Housing Sector as the delivery vehicle for rental housing to accommodate the low- to middle-income rental market sector.
Social Housing is a workable solution for delivering quality affordable housing at scale, by involving several stakeholders provided that sufficient Restructuring Capital Grants (RCG) and Provincial Institutional Subsidies are available.
Social Housing, by definition, is subsidized rental accommodation which is driven by SHIs, the SHRA, and Provincial Human Settlement Departments in conjunction with Local Municipalities. The NHFC provides top-up funding to SHRA accredited SHIs that qualify for RCG to complete the project.
Once a project is identified by a Social Housing Institution (SHI) and supported by the Province and the Local Authority; they jointly approach the SHRA for the RCG. Together with the Institutional Subsidies awarded by the Province/Metropole, SHIs are then enabled to undertake refurbishments of existing buildings or Greenfields constructions, thereby availing decent affordable accommodation to the target market. SHIs are entities formed to own the property, undertake the development of social housing projects, facilitate and manage the properties and rental processes. The beneficiaries or potential tenants are low- and middle-income households earning from R1 500 and up to R 7 500 per month.
The NHFC, through its Project Division, provides project finance in the form of Project Development loan facility, which converts to a long Term Loan facility on the completion of construction of a Social Housing project.
Traditional home-ownership is not the only way in which low-income earners can gain access to housing; in some cases, ‘Renting’ is a more suitable option. It is in this regard that the NHFC, through its Projects Division, offers ‘Term Loans’ (Medium to Long-term) to private sector Property Practitioners that provide affordable rental accommodation.
The Term Loan facility is aimed at providing ‘Property Practitioners or Private Landlords’ with Greenfields property developments; or to buy and/or refurbish existing buildings for the purposes of availing affordable housing rental units.
Property Practitioners are mainly privately owned legal entities formed to facilitate property management and finances thereof; they also own and facilitate the rental processing of units in the property. The end-beneficiaries or potential tenants are low- to middle-income earners, with household income of up to R15 000 per month.
Provincial and/or Local Municipal Authorities:
As a FACILITATOR of affordable housing finance, the NHFC partners with Provincial and/or Local Municipal housing departments to offer the following:
- housing project technical assistance and expertise
- management facilitation and support of Provincial Social Housing programs
- management and disbursement of social housing subsidy funds
The facilitative role of the NHFC, when managing and disbursing the social housing subsidy funds of a Provincial Human Settlement Department, extends to the usage of the subsidy funds to bridge-fund the approved Social Housing Project at construction stage - thereby reducing interest costs, with the avoidance of using borrowed funds at early stages; which in turn, benefits the end-beneficiary with reduced rental costs and charges.
Through the Projects Division, the NHFC provides Project Facilitation expertise to mainly the Provincial Human Settlement Departments, Social Housing Institutions and, indirectly, the Local Municipalities; by assisting them to meet the following objectives:
· housing development facilitation of projects benefitting the NHFC target market
· improved Shareholder participation in housing delivery and stimulated activity in housing supply
· partnerships facilitation with local and international housing institutions and DFIs
· land acquisitions facilitation, statutory approvals and detailed designs
· bank lending to target market ensured and an increased development affordable housing markets