Jakarta, Indonesia
September 5, 2017

JHF and mortgage markets in Japan

Yoshihiro Seguchi
Senior Executive Director,
Member of the Board of JHF

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All Rights Reserved.

1

Signing of MOC(Memorandum of Cooperation) with SMF
Mr. Toshio Kato, President of the Japan Housing Finance Agency (JHF), and Mr. Ananta Wiyogo,
President Director of the PT Sarana Multigriya Finansial(Persero) (SMF), the Republic of Indonesia,
jointly signed the Memorandum of Cooperation (MOC) to strengthen their cooperative relationshipin the fields of housing finance and housing market support for mutual benefit on July 10, 2017 at
the JHF head office in Tokyo.

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2Profile of Japan Housing Finance Agency (JHF)
Established: in April 2007

Total Assets: 26,320 billion JPY (FY2016)
Capitalization: 709 billion JPY (FY2016)
All paid in by the Government of JapanNet Income:203 billion JPY (FY2016)
Competent Ministers
Minister of Land, Infrastructure, Transport and Tourism (MLIT)
Minister of Finance (MOF)
Number of staff: 902 (As of April 2017)

Head Office: Tokyo, Japan
Regional Office: 8 offices in major cities
Main line of business
Secondary market operation under securitization support
business, Direct mortgage origination for disaster mitigation orurban rehabilitation, Mortgage insurance, Management oflegacy assets of GHLC, etc.
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3

Housing starts in Japan and market share of GHLC
(Million Units)

Cumulative number of housing started and financed by GHLC and share of GHLC

[1950-2007]
64.1 mil.
30.3%

19.4 mil.

(Fiscal Year)
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(Source) MLIT ad JHF

4GHLC and JHF

Established

GHLC

JHF

19502007

Ownership

100% Owned by the Government of Japan

Mission・Provide liquidity to mortgage markets to low and medium income household・Enhance quality of housing

Main Products
Main Business
Main Funding Source
Subsidy

Fixed Rate Mortgages
Origination in primary mortgage market(Compete with private sector)

Secondary market operation(Support private sector)

Borrowing from the Government

Mortgage Backed Securities
(MBS)

Yes

No (in principle)(Note) JHF still originates mortgages for such exceptional cases as disaster mitigations. In such cases, JHF still have access tofunding from the MOF FILP and subsidies from General Appropriations.

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(Source) JHF

5Interest rate and prepayment on GHLC loans(JPY trillion)

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6(Source) Bank of Japan and JHF

Reform of Japanese Mortgage Market
Fixed Rate Mortgage

FILP: Fiscal Investment and Loan Program
GHLC: Government Housing Loan Corporation
JHF: Japan Housing Finance Agency

Loan with Prepayment Penalty
GHLC

20thCentury

FILP
Subsidies
GOJBorrowers

Government of Japan

ARM
Adjustable Rate Mortgage

Banks

Depositors
Deposit
MBSJHF

21stCentury

35 year Fixed Rate Mortgage

Borrowers

F35Mortgage Backed Security

Sell Loans to JHF
Banks and Mortgage Banks
BanksARM
7

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Investors

Depositors
Deposit7

Risk transfer under GHLC and JHF
JHF

GHLC

Credit riskof theborrowers

Credit riskof theborrowers

Interest
rate risk

Interest
rate risk

GHLC

JHF

MBS
Prepayment
risk

Investors

Prepayment
risk

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(Source) JHF

8MBS issuance amount in Japan（billion yen）

（FY）
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(Source) Japan Securities Dealers Association (JSDA)

9Mortgage rates in JapanAll Rights Reserved.
(Source) JHF

10

Asian Secondary Mortgage Market Association (ASMMA)
JHF and PT Sarana Multigriya Finansial (Persero) are members of ASMMA.

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11

Thank you for your attention.

Photo : Masahiro Kobayashi
These materials have been prepared for the sole purpose of providing information to our investors and not as an offer, sale or inducement to buy or sell bonds.

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12

We urge investors when they are making investment decisions regarding bonds to carefully confirm details of the conditions, content, and structure of the final products in the latest productprospectus prepared for the issuance of the relevant bonds as well as any other most recent available information and accordingly assume personal responsibility for their decisions.