Social Housing Act, 2008 (Act No. 16 of 2008)RegulationsSocial Housing RegulationsChapter 5 : Investment Criteria24. Financial Viability |
| (1) | The social housing institution must provide full details of the manner in which it plans to meet its financing obligations for development loans and ongoing maintenance and management of the development property. |
| (2) | The social housing institution must demonstrate project viability including— |
| (a) | the financial resources that are available to cover any short to medium-term operating deficits; |
| (b) | contingency plans for vacancy and bad debt; |
| (c) | applicable annual escalations; and |
| (d) | detailed cash flows over loan or debt period. |
| (3) | The project financial feasibility analysis must demonstrate a minimum internal rate of return (IRR) set as the prime overdraft rate as set by the South African Reserve Bank plus 4.5%. |
| (4) | Private sector firms must provide an equity contribution to a minimum of 20% of the full development cost of the social housing units in order to be eligible for the grant. |