The Housing Financing Fund or HFF ( is, Íbúðalánasjóður or ÍLS) is

Iceland Iceland ( is, Ísland; ) is a Nordic island country in the North Atlantic Ocean and in the Arctic Ocean. Iceland is the most sparsely populated country in Europe. Iceland's capital and largest city is Reykjavík, which (along with its s ...

's government-owned

mortgage A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any ...

lender. It grants house purchase and

home improvement The concept of home improvement, home renovation, or remodeling is the process of renovating or making additions to one's home. Home improvement can consist of projects that upgrade an existing home interior (such as electrical and plumbing), ...

loans to individual borrowers, loans to build up rental housing stock to local government, companies and residents' organizations. As well as special loans such as for house renovations for the disabled or elderly. The purpose of the fund is to ensure housing security and equality for all Icelanders on controllable terms.

History

The HFF was created in 1999, following the Housing Act, no. 44/1998, to act a successor to the old Icelandic Housing Authority (IHA, founded 1957) after the merger of the State Building Fund and the Workers' Building Fund. The HFF was substantially impacted by the

2008–2011 Icelandic financial crisis The Icelandic financial crisis was a major economic and political event in Iceland that involved the default of all three of the country's major privately owned commercial banks in late 2008, following their difficulties in refinancing their ...

. In order to ensure that the HFF would remain solvent, the Icelandic government injected ISK 33 billion (2.1% of 2010 GDP) at the end of 2010, under a restructuring plan approved by the

European Free Trade Association Surveillance Authority The EFTA Surveillance Authority (ESA) monitors compliance with the Agreement on the European Economic Area (EEA) in Iceland, Liechtenstein and Norway; the European Free Trade Association (EFTA) States which are a part of the EEA Agreement, allowin ...

(EFTA).OECD Economic Surveys: Iceland 2011 -OECD - 2011 Page 50 "The Housing Finance Fund (cont.).. The increasing difficulties that many households have had in paying their mortgages since the financial crisis struck have necessitated substantial debt restructuring, eroding the HFF's capital. Including debt write-downs associated with the December 2010 agreement between the government and the main mortgage loan providers to reduce the value of certain mortgages to 110% of the value of the underlying property, impaired impaired loans soared from ISK 3.4 billion (0.4% of the HFF's loan portfolio) in 2009 to ISK 38.8 billion (5.2% of the loan portfolio) in 2010. To ensure that the HFF remained solvent, the government made a capital injection of ISK 33 billion (2.1% of 2010 GDP) at the end of 2010. The European Surveillance Authority recently approved this state ..."

References

{{reflist Economy of Iceland