TUHF, the financiers of predominantly black emerging property developers, has played a major role over the years in the renewal of the Joburg CBD and surrounds. Xolile Mtshazo speaks to TUHF's liaison officer Pressage Nyoni on its role.

Who are the brains behind the establishment of TUHF and why is there a need for such an organisation?

The founding members of TUHF are Paul Jackson, who has a background in development finance, economics and agriculture, and Nano Makwela, who has a background in finance.

TUHF is the only financier of small and medium-scale entrepreneurs in the affordable housing sector and the only financier of property markets which were redlined by bigger financial institutions.

When was the organisation founded and under which government laws or act?

TUHF was founded in 2003 and subscribes to the Financial Sector Services Charter.

In which sector of the property market does the TUHF operate, meaning in which space must emerging black property developers play to receive funding?

TUHF traditionally operates in the inner city affordable housing sector. However, it also finances mixed-use developments.

TUHF also now finances outside of inner cities, where "traditional banks" would not normally extend loans, as well as near city neighbourhoods and along transit-oriented development corridors where there is a demand for affordable housing located in close proximity to public transport and economic opportunity.

Do the property developers have to have some form of surety?

Our clients need to have some form of equity. Ideally, we require up to 30% equity from clients. We also have the IEF (Intuthuko Equity Fund), which is essentially a mezzanine loan available to fund the required equity. Even when using the IEF, TUHF requires that the client at least puts in whatever they can afford into the deal.

What is the criteria for funding?

We focus on character-based lending, so a passion for property is paramount. It also helps if the client has some previous experience in the property sector but this is not essential. They should have identified a building which they wish to purchase and done some sort of feasibility analysis on how the project will work. We provide training and offer "hand-holding" for most of our clients, assisting them in the property investment and management journey.

What is your role in the booming market of repurposing existing buildings into residential or student accommodation?

We assist clients with the purchase, refurbishments and additional construction. We also assist with the demolition and construction of new build structures.

TUHF offers equity funding, bridging finance and loan facilities, training, mentoring, networking and information sharing.

Are you coping with the number of applications arising from the property market boom?

We have coped well with the demand for property finance. However, we always have more applications and more demand than we can fund. While we do have the capacity to finance demand, we are constrained by availability of funding.

Where does the capital to finance the property developers come from?

Our funding comes from various sources - shareholders, asset managers, listed vehicles on the JSE, a domestic medium-term note programme, and securitisation is in place.

The loan capital must be repaid over 15 years, unlike with the banks, which require repayment over 10 years.

Our vision is to have a R5bn book servicing every major city in SA.

We wish to grow our position as the leading commercial property financier in our market niche and to achieve our "impact through scale" objective.