Housing Finance

In a region experiencing a growing demand for housing and a limited increase in its supply, the objective of IFC Advisory Services' Housing Finance program is to increase the availability of affordable housing finance by developing robust primary and secondary residential mortgage markets. The program plans to achieve its objective by building the capacity of financial institutions engaged in housing finance, developing a sector-wide housing finance training program, and improving the housing finance enabling environment for countries.

The Housing Finance program is currently active in Afghanistan, Egypt, Iraq, Lebanon, Oman, Pakistan, Saudi Arabia, and West Bank & Gaza.


What Does the Program Offer?

• Assistance on new housing finance product development, marketing and distribution strategies
• Advice on loan origination, underwriting, loss mitigation, servicing, risk management, foreclosure policies, procedures and systems
• Organization of housing finance seminars, workshops and awareness raising conferences
• Creation of housing finance training material and delivery of training
• Advice on housing policies, market infrastructure, and legal and regulatory frameworks
• Housing finance market studies, diagnostics of financial institutions' mortgage operations and provision of recommendations

Expected Outcomes and Impact

Through the program’s activities, financial institutions are expected to adopt standardized housing finance documentation; develop new or upgraded housing finance products and services; and improve operating and reporting policies, procedures and systems. In addition, the program aims at training housing finance staff in mortgage finance and operations and raising awareness among consumers about housing finance. In close collaboration with other IFC Advisory Services' programs and the World Bank, the program also expects to improve the enabling environment for housing finance to encourage financial institutions to increase their offering of housing finance; reduce costs of registration and improve title and registration record keeping; and enhance foreclosure procedures.

The program ultimately expects to achieve the following impacts:

• Improve access to affordable mortgage products
• Increase home ownership, which promotes economic well-being and prevents slum proliferation and poverty reduction
• Increase supply of newly constructed housing
• Develop secondary mortgage markets

Key Achievements

From the inception of IFC Advisory Services Housing Finance program in 2006 to the end of fiscal year 2007, the program has been successful at:

• Launching five new projects and covering eight countries through advisory services
• Disbursing about 9,000 housing loans for a total value of over $140 million
• Developing and upgrading four new products/processes for clients that help improve operational efficiency and increase access to housing finance
• Conducting three market studies and producing four company diagnostic reports
• Providing ten policy/legal/regulatory recommendations to help remove impediments to the growth of housing finance
• Reaching over 400 individuals, representing 170 institutions, through awareness raising events, training seminars, conferences, and workshops

Eligible Partners & Clients

• Mortgage lenders and refinance companies
• Land development and construction companies
• Regulatory bodies including central banks
• Governments

Examples of Projects

IFC Advisory Services has assisted the Alliance Housing Bank in its capacity building effort to automate its origination and underwriting systems in order to support its growth plans of increasing access to affordable housing finance. Alliance Housing Bank is the first GCC private sector housing bank operating in Oman and providing financing for the purchase, construction and renovation of houses as well as for the purchase of land. IFC also committed to invest $45 million in the bank to support its aggressive growth strategy.

IFC Advisory Services completed the Housing Building Finance Corporation Advisory, which consisted of developing a comprehensive business plan for transitioning towards a corporatized and commercially sustainable institution. The Corporation is the oldest and only state-owned housing finance entity operating in Pakistan, which provides financing for the construction, rehabilitation, and purchase of houses to the low to middle income market segment. IFC is now considering a phase II capacity building and pre-privatization investment opportunity with the Housing Building Finance Corporation.

IFC Advisory Services has also conducted a Housing Sector Study for the government of Afghanistan. The objective of the study was to assess the present environment and initiate a dialogue with key players in the housing sector. The study ended with a workshop in Kabul, attended by all the major stakeholders. Through the workshop, a consensus was reached on the next steps to take to alleviate the bottlenecks in the distribution chain of housing finance.


For additional information contact

Syed Farhan Fasihuddin
Housing Finance Program Manager
E-mail: sfasihuddin@ifc.org