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NHFC Finance :: Funding Programs :: Incremental Housing

COMMERCIAL Funding Program

As the FINANCIER, the NHFC offers the following broad COMMERCIAL Housing Finance solutions:
-  Incremental Facility: up to 5years term period
-  Homeownership Facility: minimum 12years - maximum 20years term loan

Through the Commercial Division, the NHFC lends Banks/Private Lenders/Retail Finance Intermediaries (RFI’s) that provide rental and bonded housing options to end-beneficiaries (home seekers).  These entities ‘may’ in turn extend various unsecured housing finance loan products to the end-beneficiary target market, which may include:

  • housing micro-lending / incremental housing loans:
    loan amounts up to R10 000 for housing related spending, availed to end-beneficiary households who earn between R1 500 and R15 000 month; and
  • home ownership:
    housing finance availed to end-beneficiary to ‘buy’ or ‘rent-to-buy’ their own homes, and whose household monthly income is between R1 500 and R15000


Lenders/Retail Finance Intermediaries/Banks

Over and above the role of wholesale funding, the NHFC is also tasked with developing and managing facilitative interventions that support lending by Banks/Private Lenders/Retail Finance Intermediaries (RFI’s) in the low- and middle-income household market.  The Corporation specializes in identifying, assessing, pricing, monitoring and managing the risks associated with the placement of funds in this market.

As one of the country’s premier development finance institutions and the largest public housing finance entity focused in the affordable housing market, the NHFC strives to be an effective partner for private and government in responding to the challenges of achieving sustained and equitable development and improving the quality of life for all South Africans.


The Lenders and/or Retail Finance Intermediaries applying for NHFC Commercial loan facilities must meet the required qualification criteria and provide relevant supporting documents as prescribed by the NHFC Credit Committee; see the Finance Qualifying Criteria section for more details.


Loan description:

-   Incremental Housing (IH) offers Wholesale Structured Loans for Retail Finance Intermediaries and Lenders to broaden scale of impact and penetrate new markets and/or to on-lend to qualifying low- and middle-income households who want to increase house value by
- improving their homes,
- buying land or
- providing top-up credit for discount benefit or capital subsidy beneficiaries.

-   IH loans range between R8,000 and R15 000

Target market:

-   established and accredited Micro-Finance Lenders Retail Finance Intermediaries (RFI’s) and/or Banks

Loan size

-   Loan size ranges between R10m and R200m based on the potential market, realistic projections and capacity to manage growth

-   Draw downs to match disbursement of end-user loans

Loan Term

-   Maximum of 5 years

-   Loan repayment period must match end-user loan profile

-   Interest rate linked to the prime rate

-   Lender to contribute a minimum of 20% capital adequacy of the total facility amount

Qualifying criteria and finance conditions:

·     adherence to National Credit Regulators’ (NCR) terms and conditions

·     established legal entity with sound financial standing and track record

·     signing of a loan agreement and compliance with the NHFC Statements of Sound Practice

·     repayment period linked to exit finance kicking in

·     The institution shall take full responsibility for the application of the funds made available to them;

·     all draw downs to match disbursement of end user loans

·     all loans issued must be solely for incremental housing purposes

·     the Lender shall commit itself to submission of monthly progress reports against the projections

·     the Lender shall commit itself to an approved tendering procedure in the engagement of external consultants and suppliers for provision of goods and services thereof;

·     the NHFC reserves the right to access and review the records of the Lender company at all times

·     the NHFC reserves the right to appoint a representative to the Lender company’s Board


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