Flemish Housing Fund for Large Families

A family dimension in social housing policy

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GezinsbondGezinsbond(league of families)(league of families)

The principle of family modulation

The principle of family modulation implies that a family's ability to cope financially is not only determined by household income, but also by the number of persons that must live from this income.

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What does the Housing Fund?

Families who otherwise would never be able to own their own home, are given the opportunity via a unique loan system.

In 2009, more than two thousand five hundred modest-income families with children became owner of a house or were able to renovate that house via social loans from the Flemish Housing Fund.

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Flemish housing Fund Origin and evolution Legal status Mission: Social housing policy in Flanders Family dimension and social dimension Funding Some statistics Home improvement and rental assistance

for those who cannot afford an own house Political appreciation The Gezinsbond supports the Housing Fund Conclusion: recommend application of a

family modulation scheme

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Origin and evolution

Established in Belgium in 1929 by the Gezinsbond, which was then unitary

Regional structures in 1980 (competence in Flanders, Wallonia and Brussels)

Flemish housing fund for Large Families cvba established on 17/10/1980

Operational on 1 januari 1984 In 1999 families with at least 2

children.

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Expanded to include all families with at least 2 children

In a Flemish government decree of 19 januari 1999 , the Housing Fund target group was expanded to include all families with at least two children and a legally fixed maximum income.

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Frans van MechelenPresident of the Gezinsbond

“Also in the third millennium, the Flemish Housing Fund for Large Families will continue to be indispensable for modest-income families with 2 and more dependent children”.

(Editorial in “de Bond” of 11 December 1998)

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Recent evolution: families with one child. The Flemish government decree of

9 December 2005:

Expanded the target group to include all families with dependent children.

At the same time substantially

increased the allowable maximum sale value of the homes.

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Legal Status

A private law company, namely a cooperative society with limited liability, subject to a number of legal requirements, (accounting, taxes and the responsibilities of the various policy bodies).

Certified by the government as social

housing organisation subject to decrees that stipulate the activities the institution can develop with the financial resources allocated for this purpose in the Flemish Community budget.

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Mission of the Housing Fund:Social housing policy in

FlandersThe Housing Fund is active in two

sectors:

Core –business: the acquisition of social housing by families.

Also active in the rental sector with: home improvement and lease assistance activities.

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The Housing Fund:Social housing policy in Flanders

- Family dimension: the greatest support to the largest families.

- Social dimension: the lowest incomes receive the most support.

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Family dimension in social housing policy

Benefits of owning a home:- guarantee against poverty ;- possibility to adapt the dwelling to

the number of children ;- benefits the sustainability of the

living accommodations.

The family dimension is central to the housing issue

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Family dimension via digressive interest rates

Lower in function of the number of dependent children.

An increase in the number of dependent children results in a (further) decrease in the interest rate.

When the number of dependent children decreases during the duration of the loan, no increase in the interest rate.

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Social housing: Housing fund is aimed at families with children and a

limited income

There is a limit to the:

- family income

- sale value of the homes

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Limits to household income : Maximum income on 1 Januari 2009 :

Number of children 1 2 3 4 5 6

Maximum income 49,260 EUR 52,340 EUR 55,420 EUR 58,500 EUR 61,580 EUR 64,660 EUR

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Social dimension via digressive interest rates

The interest rates charged for borrowing families not only takes account of the number of dependent children,

The interest rates are also lower as the household income is lower.

Limits to the value of the house: higher in function of the number of children

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Less than market interest rates

Varied between 1.5% and 4.17% in oktober 2009.

The loan duration, and thus also the monthly payments, are set according to the financial possibilities of the borrowers (10 years to maximum 25 years).

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Interest rate and maximum incomeNumberof child

1 2 3

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5 6

Annual rate

Maximumincome

Maximumincome

Maximumincome

Maximumincome

Maximumincome

Maximumincome

1.50% 

16911 21138 25365 29596 33823

2.00% 16911 21138 25365 29596 33823 38051

2.50% 21138 25365 29596 33823 38051 42278

3.00% 25365 29596 33823 38051 42278 46505

3.50% 29596 33823 38051 42278 46505 50733

3.80% 32132 36359 40586 44814 49041 53272

3.90% 32976 37203 41434 45661 49888 54116

4.00% 33823 38051 42278 46505 50733 54960

4.10% 34668 38895 43122 47353 51580 55807

4.17% 49260 52340 55420 58500 61580 64660

Revision of the interest rates every five years

One feature of loans from the Housing Fund is the revision of the interest rates every five years: the interest charged on all loans is revised every 5 years based on the evolution of the borrower's income.

Taking into account the average borrower's income for this five years.

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Funding

In 2009, the Housing Fund issued loans to families for approximately 360 million Euro (or almost 540 million US$).

This amount can be borrowed by the Housing Fund itself on the financial market via bond loans that are guaranteed by the Region of Flanders.

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Bond loans

The call for tenders to the banks for the bond loans is done according to the guidelines applicable to European tenders.

The terms of the bond loans are largely a function of the mortgage loans (this means: the amount in question is borrowed for a period of 15, 20 or 25 years).

Repayment of the principal starts immediately. Repayment by the Housing Fund to the banks is done based on annuities (= annual repayment of a part of the principal, plus the interest).

The contribution of the Flemish Region to the annuity amounts to 50%.

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Some statistics: 2006 2007 2008

Number of loans 2018 2780 2536

Total amount 234.8 Mio €

347.6 Mio €

323.9 Mio €

Migrant families 44121.9%

61522.2%

56522.3%

North-Africa 92 129 86

Families with Turkeys nationality

57 83 77

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Home improvement and rental assistance

In 2008, there was an investment of more than 5.5 million euro The housing fund engaged in a number of social housing projects.

The property belonging to the Flemish Social Housing Fund amounted to 867 housing facilities. Work was completed on 739 of these.

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Political appreciation : the Flemish

Minister for Housing in Parliament “If there is something we should be proud of,

it is the social loans, including those of the Flemish Social Housing Fund. We have injected significant extra tax revenue in support of these”.

“We wish to make it possible for people with a modest income to realise their dream of home ownership. This has become difficult for a single-income family. Those with a reasonable fixed income who are forced to go it alone at a certain moment, are unable to receive a loan from any bank, unless the entire family acts as guarantor. And that is the best way to guarantee family quarrels…..”

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The Gezinsbond is asking:

The application of a family modulation scheme in government support and services.

This could be applied at every policy level.

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More information www.gezinsbond.be

www.vlaamswoningfonds.be

www.flw.be (Wallonia)

www.woningfonds.be (Brussels)

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