The National Housing Finance Corporation (NHFC)

The NHFC is a state-owned entity in the human settlements sector, supporting housing delivery through the provision of affordable housing finance. The organisation has been in existence since 1996, operating on a national level, providing wholesale funding to the affordable housing market. 

Their funding focus has primarily been social housing institutions, non-banking retail intermediaries, privately owned property developers, construction companies, and investors. The secondary focus had been loan origination and other forms of wholesale funding (equity and quasi-equity) that was made available to intermediaries that operate within the affordable housing market sector. With the merger of RHLF and NURCHA into NHFC, their mandate has since expanded to include rural housing as well as supplying bridging finance to developers and construction companies in the subsidy housing market.


The NHFC mandate incorporates the provision of loans to institutions that offer rental accommodation. The types of rental accommodation offered are:


Social Housing, by definition, is subsidised rental accommodation which is driven by Social Housing Institutions (SHIs), Other Delivery Agents (ODA), the Social Housing Regulatory Authority (SHRA), and Provincial Human Settlement Departments in conjunction with Local Municipalities. The NHFC provides top-up funding of approximately 30% as secured debt and the balance of which is provided for by the SHRA to accredited SHI’s and ODA’s that qualify for Consolidated Capital Grants (CCG) to complete the project. Social Housing projects are aimed at providing subsidized rental housing to accommodate the low- to middle-income rental market sector.


Private rental is a project or development finance programme which enables properties owned by landlords to be developed or refurbished for purposes of leasing properties to tenants. The NHFC provides medium- to long-term debt funding to such property practitioners (Developers or Landlords) to refurbish existing buildings or for greenfield housing development projects.


The NHFC offers wholesale funding in a form of structured loans to Retail Finance Intermediaries. These RFI’s on-lend to qualifying low- and middle-income homeowners to improve their housing condition on an incremental or gradual basis. The loans are provided by the RFIs to homeowners via the purchase, on credit, of building materials via established builders’ merchants. Acceptable end-user loan usage includes the building of a new house, extensions to homes, fixed improvement to a house, connecting to utilities (water, sewerage and electricity), energy efficient retrofits (including solar energy, insulation and other energy-generating or energy-saving solutions), water harvesting, fencing and productive housing. Incremental Housing Finance is facilitated to empower both rural and urban low-income earners to improve their living conditions. Therefore, the NHFC aspires to see RFIs grow to such a level where they can access funding from other institutions, thus crowding in the private sector as a funding partner to the NHFC.


Subsidy bridging finance is a project or development finance product that offers short-term revolving facility. The term is typically taken out over a period of around 60 days to bridge contractor’s cash flows between the service provider and pending payment by the respective employer. The NHFC provides bridging finance to contractors who have been appointed for the construction of subsidized houses either by an organ of State or from the private sector. This bridging finance product is directly linked to the value of approved certificates, known as Invoice or Certificate Discounting. The Certificate Lending Product aims to assist Contractors with cash flow between the issue and payment of the monthly Payment Certificate. The product also offers material supplier undertakings where the NHFC agrees to pay the material supplier for the goods delivered on behalf of the contractor once a certificate of a completed milestone is certified and approved by the Employer.


The NHFC provides project development finance to developers involved in building affordable housing for sale
to the low- to middle-income earning group. This is a short-term development finance for the purpose of servicing sites, construction of top structures either free-standing or sectional titles. Loans are provided to developers who are actively involved in providing affordable housing, in service of this market.


They work closely with investors, developers, housing development agencies and funding institutions to leverage private sector and development funding. This is used to finance and create affordable housing that caters to the market that we serve. In this case, the NHFC will typically invest through a range of instruments which can be equity, quasi-equity, and even secured debt instruments in these entities.


FLISP was developed by the National Department of Human Settlements. The objective of FLISP is to facilitate sustainable and affordable first-time home-ownership to South African citizens and legal permanent residents who earn between R3,501 and R22,000 per month. FLISP offers qualifying applicants, with approved mortgage loans, a measurable opportunity to reduce the eventual monthly loan repayment instalments to an affordable amount over the loan repayment term.


The NHFC actively partners with banks and traditional lending institutions through co-financing agreements and risk enhancement mechanisms. Bank lending in this segment of the market is increased and supplemented through leveraged funding provided by the NHFC.

Find out more about the NHFC’s offerings by visiting their site.

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