SUPPORT PROGRAMME FOR SOCIAL HOUSING

Bridging Finance Programme

The Bridging Finance Programme is managed by Trust for Urban Housing Finance (TUHF), on behalf of the SPSH.

TUHF is a development finance organisation that provides short and medium term loans to finance the acquisition and improvement of residential rental property in South Africa's inner city areas. Although a primary goal is to contribute cost-effective and cost-efficient solutions to the regeneration challenge facing these areas, the organisation will only finance projects that are cashflow positive from day one and viable as sustainable business ventures. Social Housing Institutions (SHI) cannot access bridge finance directly.

Firstly, an SHI in need of finance must apply to the SPSH for either Technical Assistance or Grant Support or both and its application must then be approved after an organisational diagnostic exercise has been conducted. Thereafter, it can apply for the short term bridging finance for either acquisition, or refurbishment or construction of new residential units. Secondly, TUHF would further assist the SHIs to secure long term finance for the project.

Clients are encouraged to start small and gradually grow their portfolio. Once a client has gained experience and insight into local market knowledge and demonstrated good qualities of property and customer relations management, TUHF would aggressively support such a client to grow their portfolio and graduate from part time to full time property entrepreneurs.

The terms of the short term bridging finance loans are as follows:

• Term: 5yrs
• Interest rate: Prime less one and a half percent
• Limit: R7,5 million
• The total capital for the bridge finance is R23,1 million.

Last Update: 14 November 2007

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