Home Loan Guarantees – HIV/AIDS
Shared Interest is working with the Home Loan Guarantee Company (HLGC) in South Africa to address the pandemic that continues to ravage South and Southern Africa, despite government programs and intensifying grassroots mobilization. The new program will provide both credit and care for HIV-positive home-buyers. In 2004, the Overseas Private Investment Corporation issued a loan for the project. Together with credit from JPMorgan Chase in South Africa, these funds will generate annual revenues of approximately $3 million for counseling, health care and medicines for borrowers struggling to maintain both their health and their homes.
Shared Interest and HLCG have launched Housing for HIV, the program to fund counseling and treatment for HIV+ homebuyers. The Home Loan Guarantee Company has reached an agreement with ABSA – its first bank partner in the project – to issue the housing loans that will be guaranteed for HIV+ individuals who will receive treatment and counseling in addition to credit. The roll out began in March 2006, when the bank began to extend the guaranteed loans. ABSA, the largest bank in South Africa, has the greatest potential to lend at scale and set important national and international precedents. This initiative is projected to benefit as many as 400,000 South African families affected by HIV/AIDS during the next ten years, while providing $3.2 million a year of services to HIV+ home loan applicants.
Services like these are vital, because the combination of hunger and AIDS is, as Stephen Lewis of the UN Children’s Fund says, “is the most ferocious assault on women ever.”
Thirty million Africans are HIV-infected – more than six million in South Africa alone. They constitute an estimated 21.5 percent of South Africa’s population. Most victims of the virus are young women and men in their most productive years. In South Africa, the average age of those dying from AIDS is 37. Recent studies are finding that incomes in poor rural households with an HIV-positive member can fall by half. Children, especially girls, often miss school to look after the sick or to grow food. As in the rest of Africa, more women than men are infected. South Africa’s government has recently, after significant delays, devoted substantial resources to fighting the epidemic. A recent study from the African Journal of AIDS Research by Thomas Rehle and Olive Shisane showed the infection rate has started to level off, from 4.2 percent to 1.7 percent for people between the ages of 15 and 49, with AIDS deaths peaking at a projected 487,320 in 2008.
HIV/AIDS has become a major barrier to access to housing finance, as housing lenders are permitted to require that borrowers obtain life insurance – a nearly impossible feat for people who are positive. For low-income families affected by the virus after obtaining housing loans, the disease has a doubly devastating effect. Where life insurance is available, it covers outstanding mortgage loans after death. But default and dispossession occur while breadwinners are alive but suffering from the consequents of the illness. In the short term, affected households may experience increasing difficulty making loan payments. In the longer term, children who lose their parents to the virus may become not only orphaned but also homeless.
Through Housing for HIV, Shared Interest and HLGC are working to prevent the most devastating effects of HIV/AIDS, to prolong and improve the quality of its sufferers’ lives, to protect affected families from homelessness, and to combat the stigma against people living with the virus by moving South African financial institutions to become proactive partners in addressing it.