Gauteng Partnership Fund
 

Risk Participation Facility

The Risk Participation Facility was developed for the established entrepreneurial rental housing sub-sector, offering rental accommodation to the low income target market. This facility is made available via commercial funders to entrepreneurs, supports development of new sub-markets within the social housing sector by allowing for blending of interest rates between Banks and GPF. This results in a reduced interest rate and indirectly provides access to housing units for lower income tenants due to reduced project costs.

Who Qualifies

Any company or project (SPV) with a recognised legal form that provides rental or delayed ownership schemes to families with a monthly household income less than R15 000.(The income band is linked to CPI and adjusted annually).

Types of Projects

  • Inner-city residential refurbishments
  • Conversion of offices to residential units
  • Greenfield developments

Exposure

GPF investment up to 20% of the total project costs

Documentation Required

  • Comprehensive Business Plan.
  • Company registration documents
  • Essential project information
  • Copy of latest Audited Finacial Statements
  • Equity contribution
  • Any additional information that the banks require


Risk Participation Fund

Gauteng Partnership Fund Background

The Gauteng Partnership fund (GPF) was established by the Gauteng Department of Housing to address funding challenges in the affordable housing sector.

The GPF assists the affordable housing sector by:

  • Providing public risk capital
  • Providing prospective funders with sustainable entry into social housing financing market by means of various products.

On a project-by-project basis, GPF will assist the social housing institutions to procure finance at the most favourable terms in order to promote affordable, quality accommodation that is well managed for the target market.

Product Offerings

The GPF seeks to continually develop products aimed at addressing housing market funding challenges. GPF products are reviewed annually to determine thier effectiveness.

Investment Term

Term ranges between 10 and 15 years depending on project cash flows

Investment Pricing

Prime (blended rate).

Security

  • 1st Covering Mortgage Bond (CMB)
  • Cession of loan accounts
  • Personal surety ships
  • Cession of rental income and bank accounts
  • Cession of insurance