A hallmark of the International Housing Finance Program’s (IHFP) education and advising offerings throughout its 30 year history has been its capacity to respond to the ever changing needs of the housing finance sectors in different parts of the world. The past thirty years saw major changes in the demography, macro-economy and financial sector of developing and advanced economies. These changes had major impacts on the housing and housing finance sectors of countries. Below is a brief overview of how IHFP changed its offerings in response these major transformations.
THE 1970s & 1980s
The 1970s and 1980s were characterized by high rates of urban growth, macro-economic volatility and a weakening or collapse of government sponsored housing finance systems in many developing countries. The IHFP was established in 1985 in that context. It was targeted to public sector housing and housing finance professionals, central bankers and state housing bank officials who had to reform their housing finance institutions and facilitate the growth of the private mortgage sector.
- In January 1986 the first Executive Housing Finance course took place at the University of Pennsylvania. It provided a comprehensive curriculum that included the fundamentals of mortgage lending and mortgage instrument design, the profitability and risk principles of housing finance institutions, ways to expand funding for housing finance and reforms of housing policies and subsidy systems. Its target clients were senior officials from public sector housing and housing finance institutions.
- During the 1990s, special Housing Finance courses for public and state bank officials were taught in Indonesia, India, Sri Lanka, Jamaica, Morocco and Tunisia (in French), and regional courses for South East Asia and Latin America and the Caribbean.
- In-country advising and executive education increasingly complemented each other. Assessments of housing finance systems, training needs and assistance with the development of executive education programs were provided in Pakistan, India, Indonesia, Thailand, and Panama and for the countries of the West African Monetary Union.
THE 1990S
The 1990s saw a new challenge in housing finance development when former socialist countries were transitioning to more market-based housing finance systems. IHFP became an active partner in the debate about the different types of property right systems, mortgage lending and funding regimes and subsidy programs appropriate for different transition economies. IHFP incorporated a special module on “Borrowing Housing Finance Models From Other Countries”. The neutrality and comparative nature of IHFP was critical in this context.
- In 1993 IHFP, together with Russian bankers, developed the first Glossary of Mortgage Terms in Russian. All IHFP course materials and lectures were translated into Russian.
- IHFP developed a special course for senior officials from state financial institutions and central banks, and politicians from transition economies – individual courses were developed for Russia, Poland, Croatia, Vietnam and a regional course for Central Asian countries.
- IHFP faculty worked as advisors in several countries in Eastern Europe – Poland, Hungary, Croatia, the Czech Republic, and Slovenia.
- In 1996 IHFP, in collaboration with the People’s Bank of China and the World Bank, conducted a course in Beijing, China, for Central Bank staff and state-owned banks. Materials and lectures were translated into Chinese.
THE 1990s & 2000s
During the 1990s and 2000s many developing countries, including Sub-Saharan African countries, experienced macro-economic stability, sound economic growth and financial sector expansion — conditions that favor growth in mortgage lending. Expanding the funding base for mortgage lending became a more urgent concern in many countries. That period of expansion also witnessed, however, some major crises (the Mexican, Asian, and Russian crises), all with negative impacts on mortgage lending. Weak regulatory regimes and an under-appreciation of housing market cycles and bubbles were a growing concern. In 1996, IHFP added modules on “Safety and Soundness Issues in Real Estate Lending” and “Housing Cycles and Bubble Formation”. Modules were added to reflect the need for alternatives to mortgage lending, i.e., “Non-mortgage Longer-term Lending and Micro-Finance for Housing”.
- An increasing proportion of participants in the course came from the private sector (now about 50%) and, in response, the length of the main Executive Housing Finance Course was reduced to 10 days.
- A special two day workshop was added on “Securitization and Covered/Mortgage Bonds”—a hands-on workshop taught by private sector practitioners.
- IHFP initiated a collaboration with the South African private sector and academic institutions to establish housing finance executive education for Sub-Saharan Africa. The Wharton-Cape Town University Housing Finance Program for Sub-Saharan Africa is now well established.
- Collaboration with the World Bank and other international agencies on research, advising and executive education expanded in order to reach more developing countries and expand capacity building. This expansion has continued into the 2010s.
THE 2008 CRISIS
The Global Financial Crisis of 2008, caused by advanced economies’ excessive risk taking, showed two things: First, that IHFP had been right in expanding its “Safety and Soundness” and “Housing Cycle and Bubble” offerings; and, second, that there was an urgent need to teach risk management systems and tools at a more advanced level, and improve the data collection on the housing finance sector globally.
- The risk management module of the main course now offers advanced risk management with a focus on interest rate-, credit-, and liquidity risk and value at risk treatments.
- IHFP established the Housing Finance Information Network (HOFINET) – the first comprehensive international data collection effort in housing finance to facilitate research and policy analysis in comparative housing finance, investment in the housing sector by the private sector and financial sector stability supervision.
The need for objective information and teaching in housing finance has never been greater. Housing finance systems need to expand urgently to deal with the pressure of growing urbanization. IHFP expects to continue offering a forum for the sharing of the latest experiences and innovations in housing finance..