Loans through the Savings Fund: a unique transformation model

1. 1
Financing social housing in France
Laure Maillard
Advisor to the Director
Directorate for Lending Operations

2. 2
Background of French social housing
■ Mission : to offer lower rents for persons with modest means
defined by resource ceilings
■ Weight
■ The stock of social units represents 17% of the total stock (main
residences)
■ More than 30 % of total construction this year (it was less than 15% in
2000)
■ Total amount of investment : €20 Bn in 2012 (€14 Bn for construction /
€6 Bn for renovation)
■ Number of households
■ 4.2 million households (16% of households) are accommodated in
social units
■ Another 3.6 million (14% of households) could claim access in view of
the resource conditions of the tenant households
■ Government goals within 2017
■ 150 000 new dwellings a year (vs 117 000 in 2013)
■ 120 000 thermal renovation a year (vs 44 000 in 2013)

3. 3
Financing social housing : key points
State grant
5%
Le logement social en France
Equity
11%
Local
authorities
grant
6%
Savings
Fund
Loans
73%
Other grant
5%
Fiscal supports
- Reduced VAT rate
- Exemption on land tax
- Non profit organisations
= no company tax
- Individual housing
benefit for renters

4. Loans through the Savings Fund :
a unique transformation model…
4
Savers
Livret A
passbook
and
LDD
€367 bn
+
LEP
€48 bn
Collection
centralised
in the
Savings
Fund
€243 bn
+
Capital and
others
€16 bn
Social
housing
and city
€137 bn
Other
general
interest
missions
€21 bn
Rate
89%
Shares
11%
Regulatory
Earnings
capital
Compen-sation
for
the State
guarantee
Savings collected by all the banking
network
Loans
€158 bn
Financial
assets
€101bn
Commission paid to the banking network

5. 5
…which allows very long-term
financing at preferred rates

A single pricing policy: irrespective of the institution and the duration

Very long-term loans : 40 years construction / up to 60 years for land

Loans at preferred rates, most often granted at the resource cost or even
below for very social housing, environmental and health priorities

A regulated and secured framework : every loan must be guaranteed by a
local authority
Loan rates
Resource cost
Intermediate population
Social population
Very social population,
environmental and health
priorities

6. 6
Strengths of the model in times of crisis
■ The recent crisis has highlighted the importance of our historical
missions
■ A sector not hurt by the credit crunch thanks to a dedicated
resource
■ A resilient supply of long term loans
■ No credit event : simple credit conditions (vanilla), regulated
framework, local authorities guarantee
■ Thanks to its deep knowledge of the sector, the Savings Fund
has the ability to support the huge challenges of social housing
providers
■ A strong contra-cyclic power

7. 7
Future challenges
 Strong needs of financing social housing in France within the next few
years
 Uncertainties as regards financing
 State financing at best stable
 Uncertainties as regards local authorities subsidies
 Social housing companies equity under pressure
 A key role of the Savings Fund
 Direct support to the sector : bonus of €120 Mn, low rate for thermal
renovation (0,5%)
 Individual support to each social housing providers
 A model to promote and protect
 Availability of the resource
 Capacity to remunerate the State
 The French Savings Fund is one of the most important socially
responsible fund in Europe