Invitation To Tender For: The delivery of the UK wide Private Rented Sector (PRS) Housing Guarantees

Descriptions

The Department for Communities and Local Government (DCLG) wishes to receive proposals for the delivery of the UK wide Private Rented Sector (PRS) Housing Guarantees scheme. In September 2012, Government announced the creation of the Housing Guarantees schemes. There are two schemes, one covering the PRS and the other Affordable Housing. On 20th June 2013 DCLG announced the appointment of Affordable Housing Finance Plc (AHF, a subsidiary of The Housing Finance Corporation Ltd) to deliver the Affordable Housing Guarantees Scheme. This contract notice deals exclusively with the PRS Housing Guarantee scheme. Tenderers will need to detail how they will raise and/or deploy the capital/funding required and provide loans to borrowers under the PRS Housing Guarantee scheme, together with the policies and procedures they will adopt.In order to reduce the overall interest cost to the borrowers, DCLG will provide a guarantee covering full repayment of principal and interest, in respect of either (i) the payment obligations of a borrower pursuant to a loan from, or arranged by, the tenderer and/or (ii) the scheduled payment obligations of the tenderer, or a vehicle established by the tenderer, in respect of any capital raised, where applicable, for the purpose of on-lending to one or more borrowers. Provision of the guarantee for each loan, or any capital raised for the purpose of funding a loan, will be subject to DCLG approval, which will take account of the eligibility and purpose of the loan and satisfaction and approval of the risks of the individual borrowing and/or project. Guarantees will become effective on completion of the related capital raising (where applicable) and on-lending transactions.Of key importance to DCLG is the maximisation of the benefit of the guarantee in reducing the cost of borrowing and minimising the risk of financial loss for DCLG as guarantor. Therefore tenderers will need to explain how they consider the capital can be raised (where applicable) or funding provided at the best price and provide their costings, both transactional and operational for the capital raising/funding and on-lending activities, so that the impact of these on the overall charge to be made to borrowers can be clearly assessed. Alongside this the approach to minimising the risk of financial loss including the proposed governance, control, risk assessment and due diligence policies and procedures should be set out.