The objective of the First InitiativeProject in Uganda is to expand the access of households tohousing finance, especially modest and lower incomehouseholds, by introducing new and innovative housing loanproducts, by introducing innovative loan products combinedwith affordable housing designs. The project has deliveredtwo studies to the Bank of Uganda: i) a study addressing thefinancial and banking sector context for housing finance,liquidity and liquidity management, and the resultantpotential for use of retail funds for mortgage lending; andii) a feasibility study for housing finance pilots targetedat modest and lower income households, seeking to introduceinnovative loan products combined with lower cost housedesign in a planned urban setting. This paper, business andsustainability plan for affordable housing finance pilotprojects, provides supporting technical detail for thefeasibility study for design of pilot projects for modestand lower income households, including the need for moreliquidity for lenders involved in lending to lower incomehouseholds. Two types of pilot projects have been developed:one for starter homes for modest income households and onefor an incrementally built home for low-modest incomehouseholds. The recommended loan products include adown-market or, mini-mortgage, for the starter home andmicrofinance for housing for the lower income group. Thepaper: (i) outlines technical details regarding house designand loan product specifications; (ii) recommends thetechnical assistance and regulatory changes deemed necessaryto implement successful pilot; and (iii) provides a briefcommentary on actions that would assist such pilots reachsustainability and scale.
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