Response to consultation on draft Guidelines on ADC exposures to residential property under CRR 3

Q1: What is the materiality of the pre-sale and pre-lease contracts that would not have the expected characteristics of legally binding contract?

Exec sum: 

The French Banking Federation (FBF) welcomes the opportunity to express the views of the French banking industry on the EBA public consultation on ADC exposures to residential property under CRR 3. In this context, we herewith provide you with our responses to the questions listed in the Consultation Paper. 

In terms of general comments, we can say that the industry welcomes the work done by the EBA to answer its mandate on specifying the criteria for applying a reduced 100% Risk weight to the financing of residential real estate development (or residential ADC) instead of common CRR3 150%, provided that certain risk mitigation conditions are met. 

At a glance, French banks are emphasizing that all social housing industry perimeter would not correctly be handled by the proposed set-up and hence urge EBA to reconsider it. Please refer to our dedicated note.

On a second standpoint, EBA shall note that some of proposed criteria are non-compatible with French housing legal framework (for example, based on customer protection law, cash deposits are capped to 5 % of the sale price). Consequently, with unadjusted criteria, French market could never benefit from this reduced 100% RW based on French pre-sales that meet the legally binding requirement though. Last point, some set-ups are totally absent from France, as residential pre-lease, limiting the application perimeter of EBA’s proposal.

Answer to Question 1:  

The EBA’s proposal relies on two subsets of ADC exposures: Pre-sale and Pre-lease. 

However, we want to highlight that residential pre-lease contracts are not allowed in France: Legally speaking, a prelease by a natural person is prohibited in France. 

As such, the EBA proposal for a reduced risk weight on residential pre-lease subset would not apply in France.

Others Concerns: 

Others - Comments on the definition of ADC/ -> Financing of construction for borrower’s own use for non IPRE exposures:

The current definition of ADC exposures may lead to the classification of any financing of a real estate property in ADC category as long as the property is not finished. This seems to contradict the purpose of this exposure class which, according to the memorandum of the EC text, aims at adjusting the scope of speculative immovable property financing that is currently linked to the sole intention of the borrower to resell the property while the heightened risk rather lies on the uncertainty of the source of repayment (either a planned resale or expected cash flows). 

It seems then important for us to clarify that loans financing the construction of a real estate property that will be used by the borrower for his activity or a land where the construction of such property is planned must be excluded from the scope of ADC exposures. In fact, the repayment of these loans is based on the borrower’s income rather than the cash flows generated by the exploitation of the financed property and the financing of such properties (ex: offices, warehouses) do not bear any additional risk compared to general corporates loans. They should therefore be treated as unsecured exposures to the borrower. 

Q2: Do you agree with the approach proposed to specify the term “substantial cash deposit”?

We disagree with the approach proposed, which totally disregards Consumer protection Law. More details in our answer to Question 3.

Q3: Do you consider the 10% ratio to be appropriate for the determination of the ADC exposures benefitting from the lower risk weight?

The EBA 10 % ratio goes beyond the legal requirement of certain jurisdictions: from a legal perspective, in France, and in line with the consumer protection act for residential market, cash deposits are limited to 5 % of the sale contracts.

Then, by proposing a minimum cash deposit amount of 10% of the sale price on pre-sales the EBA hampers the possibility for French banks to apply a reduced RW in an earlier stage of the project, unlike in other EU countries, since they won’t be able to use pre-sales (i.e. reservations meeting the explanatory text defined by EBA for legally binding pre-sale[1]) in the calculation of the significant portion of total contracts.

Therefore, the rate raises questions about level playing field between French banks and other European banks with less restrictive local regulations which could include pre-sales in the calculation of the threshold.

It is also hard to understand why local regulations would not be consider in the calculation of the ADC thresholds when they are taken into account in other CRR subjects such as the definition of UCC (“any commitment the terms of which permit the institution to cancel that commitment to the full extent allowable under consumer protection and related legal acts »).

Some jurisdictions may have chosen a low cash deposit rate given other risk-reducing mechanisms.

In France, the amount of cash deposits has been set at a low level of 5% considering all the legal protection mechanisms in force to ensure the completion.  

Finally, contrary to what is was mentioned in the consultation, since the amount of cash deposits is identical within a jurisdiction, its level does not seem to us to have any influence on the rate of withdrawal of final purchasers.

[1] Legally binding presale: Pre-sale contracts” are concluded in writing and specify the latest point in time for signing the sale contract and the sale price. They are expected to include any conditions under which the prospective buyer may still terminate the pre-sale contract instead of proceeding with signing the sale contract unless such right of the buyer cannot be excluded by force of law;

Q4: Do you have any concerns with applying a single ratio to all ADC projects? Are there any practical options the EBA should consider setting the ratio in a more granular way (e.g., threshold subject to case by case adjustments for either insufficient incentives or for non-enforceability of sufficient incentives but floored at potential market price deterioration over the relevant period) keeping in mind the simplicity of the Standardised Approach and the level playing field across institutions? If yes, please elaborate these options in detail.

No.

Q5: Do you see any drawbacks in adopting the selected option? In case you prefer the alternative option, could you provide the rationale and an example of the calculation and estimation of the net present value of total payments?

Non-Applicable. Pre-lease on residentiel immovable property is prohibited by law in France.

Q6: Are there any other practices that should be considered by the EBA?

Non-Applicable. Pre-lease on residentiel immovable property is prohibited by law in France.

Q7: Do you have any concerns with applying a single threshold to all ADC projects? Are there any practical options the EBA should consider setting the threshold in a more granular way, keeping in mind the simplicity of the Standardised Approach and the level playing field across institutions? If yes, please elaborate these options in detail.

Non-Applicable. Pre-lease on residentiel immovable property is prohibited by law in France.

Q8: Is the relation between the “substantial” cash deposit required for a pre-sale contract and the “substantial” cash deposit required for a pre-lease contract appropriate from your perspective? If, not, please explain why and how this relationship should be adjusted.

Non-Applicable. Pre-lease on residentiel immovable property is prohibited by law in France.

Q9: Do you agree with the approach of strict equivalence with respect to cash deposit proposed? Do you deem other forms equivalent to the cash deposit from a risk perspective? If yes, please explain.

Non-Applicable. Pre-lease on residentiel immovable property is prohibited by law in France.

Q10: Do you agree in using two different options for pre-sale/sale and pre-lease/lease contracts?

Please refer to question 1 and 11.

Q11: Do you see any drawbacks related to the proposed options under paragraphs 14 to 16 of these Guidelines?

When it comes to real estate developer financing, we want to recall that the transaction derisking is usually assessed through the extent of the residual financing gap [Total costs of the project – Obligor contributed Equity – Sales/presales – Loan]: the lower this gap, the more likely the construction will be completed, the lower the risk of non-repayment of the ADC loan.  
In France the loan is granted when:

• the obligor contributed equity is usually of 10% of total costs (or 5% total cost in case of 100% block sales)
• the reservations reach ~30 to 40%; the latter are gradually "transformed" into outright and irrevocable sales signed before notaries, while new reservations are booked.

This practice mechanically leads to a lower debt ratio of developers (who finance themselves above all by equity and regular cash advances provided by the buyers as the project progresses the credit covering the financial impasse), ensuring the strength and resilience of the market.

Hence, we are supportive to the EBA credit-facility based approach (option 1) since it ensures a more comprehensive assessment of risk: measuring the significant portion of total contracts in regards of the loan granted is more risk sensitive and ensures that the RW will be lowered only when legally binding pre-sales and sales amounts reach 50% of the loan facility, i.e. when 

1. the construction risk is mitigated since the residual financing gap[1] is sufficiently reduced and 
2. in a material proportion of the loan amount.

Should EBA unexpectedly select another scenario, option 2, 3 or 4, we would apply for an adjustment of the proposed threshold (ie 50%) in order to better reflect the reality of market standards in term of transaction derisking: 
From our perspective a 30% legally binding sales level should then be considered as sufficient, given the mechanism described above.

[1] [Total costs of the project – Obligor contributed Equity – Sales/presales – Loan]

Q12: What is the materiality of ADC projects with mixed use foreseen? How are these projects structured and whether the proposed options raise any particular issues to be applied in practice?

We do not see any materiality ADC projects combining residential pre-sale/sale and lease in France (as a reminder, pre-lease is prohibited in France)

Q13: Do you agree with the pros and cons on the different methods explained above? Are there any further issues that the EBA should consider?

Please refer to question 12.

Q14: Do you agree with the use of method B1 for the aggregation of pre-sale/sale contracts with pre-lease/lease contracts? Can method B1 be applied in practice using option 1 for pre-sale/sale contracts and option 3 for pre-lease/lease contracts? Is it possible to separately identify the amount of the ADC exposure used for financing housing units for sale or for lease ?

Please refer to question 12.

Q15: Are there any other combinations of the options and methods considered by the EBA for aggregating pre-sale/sale contracts and/or pre-lease/lease contracts that are preferable?

Please refer to question 12.

Q16: Which alternative should be considered for assessing whether, for a project where a mixed use is foreseen, the eligible pre-sale/sale and pre-lease/lease contracts are a significant portion of total contracts?

Please refer to question 12.

Q17: Do you foresee any practical impediments to include the verification that the developer only has a residual claim on the property in the underwriting standards? How could this “residual claim” feature be ensured in practice in your jurisdiction (e.g., SPV, pledge, mortgages, …)? Please provide reasoning, taking into account market practices and underwriting standards if you think that an adjustment of the EBA’s definition of obligor contributed equity is necessary.

No answer.

Q18: What are your views on the proposed threshold for determining the appropriateness of the amount of obligor-contributed equity? Please provide reasoning, taking into account market practices and underwriting standards if you think that an adjustment of the EBA’s proposal is necessary.

General practices for real estate developer financing

With respect to the French Real Estate development financings for residential market (ie, excluding investor loans with a construction period), the usual practice is to ask for an equity ratio of around 10% of total costs (or even 5 % in case of 100% block sales). The threshold of 35% is therefore not respected and too far beyond market practices. We thus consider that it is necessary to lower it (see Q20).

Actually, the obligor’s equity should be taken into account with other parameters, such as the practice of “Sale in the future state of completion” in France (“VEFA” “Vente en l’état futur d’achèvement”): Indeed, the reservations are gradually "transformed" into immediate, firm and irrevocable (legally binding) sales as soon as the VEFAs are signed before notaries, with pre-determined payment instalments. This legal framework coupled with i) the minimum Equity and ii) 30% min pre-sale amount as condition precedent mechanically lead to a low debt ratio: developers first finance themselves through equity and regular cash advances provided by the VEFAs as the project progresses, the credit only covering the financial gap between the construction costs and the equity+ progressive cash advances from buyers. This specific French framework ensures the strength and resilience of the French development financing market.

Property value upon completion and Land Financing

Here we need to recall first the definition of ADC exposures which “means exposures to corporates or special purpose entities financing any land acquisition for development and construction purposes or financing the development and construction of any residential property or commercial immovable property”. The definition thus encompasses both land financing and/or construction financing.

The proposed threshold considers the Property value upon completion as the reference to calculate the amount of obligor-contributed equity. This approach assumes that ADC projects are financed upfront as a whole package, which does not reflect such situations where only the land acquisition is financed for the purpose of later construction that would for instance be self-financed by sales.

In some Jurisdiction, the most common case is where banks finance solely the land acquisition by the real estate developer. In such situation, there is no meaningful economic ground to consider as a risk mitigant an obligor-contributed equity ratio which is based on the whole property value upon completion since the loan does not totally finance the entire property value. 

We are of the opinion that if EBA shall thus clarify that in the context of land financing only, the property value upon completion should be understood as the land value. If other approach such as approach 3 is retained, the Total Costs of the Project should also be considered in regards of what is financed only, i.e. the land acquisition cost.

This would be consistent with the CRR definition of “property value” and “residential property”:

‘(74a) “property value” means the value of a residential property or commercial immovable property determined in accordance with Article 229(1);’;

‘(75) “residential property” means any of the following:

(a) an immovable property which has the nature of a dwelling and satisfies all applicable laws and regulations enabling the property to be occupied for housing purposes;

(b) an immovable property which has the nature of a dwelling and is still under construction, provided that there is the expectation that the property will satisfy all applicable laws and regulations enabling the property to be occupied for housing purposes.

(c) the right to inhabit an apartment in housing cooperatives located in Sweden;

(d) land accessory to a property referred to in point (a), (b) or (c);’

Financing with no mortgage

In specific cases where no mortgages are involved, the Property Value upon completion may not be known.  In such instances, the EBA should allow the use of the total cost of the project

Q19: Do you agree to use Approach 4 for identifying the appropriate amount of obligor-contributed equity? If not, what alternative options should the EBA consider?

Yes. 

Q20: Do you see any rationale for setting different threshold levels?

Threshold level

The EBA explains that the threshold level of 35% is justified for the lowering of risk weight from 150% to 100% because it exceeds current market practices. While we understand this rationale, we believe that the proposed level is too excessive since it is not based on transaction types and thus may not be reached in average across European practices. We are thus afraid that this level of threshold not risk-sensitive enough will simply disqualify too may transactions from the level 1 text derogation based on a significant obligor-contributed equity: 35% of value upon completion (65% Loan-To-Value upon completion) may be unduly conservative and decorrelated from the average level of equity contributed that would effectively mitigate the risk. 

Indeed, by analogy with IPRRE[1] loans under whole loan approach (CRR article 125.2) that shares similar features in terms of approach (i.e. calibration of RW depending on ETV : [1-“% obligor-contributed-equity”]/[V]), a 20% obligor-contributed-equity is deemed significant and appropriate to reach a 40% relative RW decrease (from 75% for an ETV =100% to 45% for an ETV=80% - see figure below on page 7 of .doc). 

The threshold level to be set in the context of ADC exposure would lead to a less significant mitigation of 33% relative decrease (from 150% to 100% RW). We are thus of the opinion that a level of obligor contributed equity of 20% would be significant enough and appropriate since ensuring proportionality to the IPRRE treatment while taking into account the additional construction risk through the lower extent of risk weight reduction.

Therefore, we would ask EBA to consider a threshold of 20% instead of 35%. This ratio remains also above the average observed in European markets which would ensure meeting the substance of the EBA proposal for lower RW application.

We are of the opinion that this would also be consistent with the EBA RTS on RE specialized lending slotting approach where favorable risk weight are applicable for satisfactory or low level of LTV.

[1] IPRRE = Income producing residential real estate.

Q21: Do you agree with the adjusted criteria for public housing or not-for-profit entities?

No, we disagree with such criteria being applied to the financing of the construction of public housing. None of the proposed criteria (equity, pre-sale rate, cash deposit) could be met for this specific perimeter, leading to an anti-economic & political situation where these solid exposures providing a service of general interest under the control of the State would face a higher charge than those leaded by private developers

As such, please refer to the dedicated .doc paper: FBF- 02Aug2024- Social Housing concerns ADC-EN-Vdef.doc

Content of this document also available below.

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Date: 02 August 2024

RESPONSE TO THE EBA CONSULTATION « DRAFT Guidelines on ADC exposures to residential property under Article 126a of Regulation (EU) 575/2013 » [1]

concerns about real estate development financing (ADC) for social HOUSING

Executive summary

This note deals only with the financing of social housing as a subset of real estate development financing (ADC).

The EBA has been mandated by CRR3 to draft guidelines to specify the criteria for applying a 100% risk weight to the financing of residential real estate development (or residential ADC), provided that certain risk mitigation conditions are met. These guidelines define a specific framework for the financing of the construction of social housing by social landlords.

These guidelines pose a real problem of non-applicability of the 100% weighting rate to the financing of social housing' constructions because none of the criteria can be met (equity, pre-sale rate, cash deposit). 

It seems more than questionable that these exposures have a higher equity charge than those on private developers. As it stands, the guidelines lead to the anti-economic result of putting more capital requirements on these solid, regulated customers who provide a service of general interest under the control of the State. 

At the same time, the social housing sector must continue to invest in the light of:

1. The increase in the number of households waiting for social housing;
2. The necessary expansion of the energy renovation of housing to meet the national objectives related to decarbonization and the inclusion of the DPE in the rental criteria;
3. Its contribution to support private real estate development in difficulty.

We therefore urge the authorities to support the profession's arguments for the EBA to adjust the eligibility criteria at the rate of 100% to the current practice of financing social landlords. 

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Presentations of the EBA's proposal to establish guidelines to apply a 100% risk weight to certain "Acquisition, Development, Construction" exposures

• CRR3 introduces in Article 4(1)(79) of Regulation (EU) No 575/2013 (CRR) a new definition of a subset of exposures covering acquisition, development and construction (ADC) exposures, which relate to exposures to corporates or special purpose vehicles (SPVs) financing any acquisition of land for development and construction purposes,  or financing the development and construction of any residential or commercial property. These ADC exposures are considered to be riskier and therefore have a specific risk weight of 150 % applied in Article 126a of CRR.

However, institutions may apply a 100% risk weight to residential real estate ADC exposures that meet certain conditions to mitigate their risk profile.

• CRR3 therefore introduces two non-cumulative criteria to benefit from the 100% weighting rate:
  1. Criterion 1: Legally binding pre-sale or pre-lease agreements, for which the buyer or lessee has made a substantial cash deposit (in the case of a security deposit in a rental agreement) which will be withheld if they terminate the contract, or for which the financing is secured in an equivalent manner, or Legally binding sales or lease contracts, including where payment is made in instalments as construction work progresses, account for a significant share of the total leases of the residential property to be built and financed.

1. Criterion 2: The debtor has substantial capital at risk, represented by the contribution of a capital contribution of an appropriate amount in relation to the value of the completed residential property.

• In this regard, Article 126a(3) of the CRR mandates the EBA to specify the concepts used in the conditions for benefiting from the 100% weight. The EBA has published guidelines for consultation until 19 August 2024 and in carrying out this mandate, the EBA is required to take into account the specificities of loans granted by institutions to public housing or non-profit entities across the Union that are regulated by law and that exist for social purposes and to provide tenants with long-term housing. In this regard, a specific framework was defined in the consultation, with three modifications compared to the general requirements.

1. Criterion 1 

1. Significant portion of total contracts 

The consultation requires that pre-lease/lease contracts represent at least a 75% of total lease contracts calculated as follows:

• Numerator: Number of legally binding pre-lease agreements with a substantial cash deposit of at least one month of rent of the residential property to be financed.
• Denominator: the total number of potential contracts of the residential property to be financed.

These criteria are not relevant for social housing for the following reasons:

1. Social landlords have no problem occupying their buildings (lack of supply). For example, "in 2022, the number of applications for social housing on 31 December was 4.3 times higher than the number of housing units available for rent during the year" (source: directory of rental housing of social landlords (RPLS) of the Ministry of Ecological Transition and Territorial Cohesion[2]);
2. Real estate financing from social landlords is not reimbursed solely on the income/rents of the financed building, but on the basis of all the resources/rents from the social landlord's real estate assets (minimum of 12,000 housing units following the Elan law which requires any social housing organisation managing less than 12,000 social housing units to be grouped together). The proposed indicator and its 75% threshold to be respected are therefore uncorrelated with the economic model of the French housing sector.
3. The construction and management of a social rental stock, intended for populations with modest incomes, represents a service of general interest delegated by the State to the Social Housing (LS) actors, namely the HLM and SEM Immobilière organizations, in return for subsidies and tax advantages.
4. The HLM sector, which carries out a mission of general interest, is under control with for the most part:
   • An exhaustive list of activities that can be carried out and specified in the Construction and Housing Code (CCH); 
   • Specific regulations and controls;
   • Interventions by the Public Authorities, in particular for the sale of housing carried out under the control of the State through its territorial representative, the prefect;
   • A limited scope of management decisions with, for example, contractual procedures with terms similar to those of public contracts or financial decisions requiring the prior approval of the Board of Directors, as well as financial alert systems provided for by the CCH, in particular the ratio of net cash flow to revenue. This ratio appears in the regulatory statements of the annual accounts with an alert threshold of less than 3%, the crossing of this threshold leading to a mandatory deliberation by the Board of Directors or Management Board of the organization on the causes of this situation and on the internal measures to be implemented to redress the organization's financial situation;
   • The mandatory conclusion of a contract between the State and each social housing body in the form of a Social Utility Agreement (CUS) aimed at defining for a period of 6 years: the management of assets, the social occupation of the stock, the rent policy and the quality of the service provided to tenants, the policy carried out in favour of accommodation, home ownership and rental consultation with,  for each aspect, the production of indicators measuring the level of achievement of the objectives set. 
   • The social housing sector is financed mainly by “Paraétatique” savings funds fed with the resources of the Livret A and via regulated loans, the distribution of which is mainly ensured by the Caisse des Dépôts and Consignations (CDC), financing from private banks granted to social landlords supplementing the part not covered by the CDC.

1. Substantial cash deposits 

A cash deposit is required for pre-rental contracts (one month's minimum HLM rent). 

This criterion is not met in the case of social landlords because having a cash deposit of at least once the monthly rent for pre-rental contracts does not meet the specificity of the social housing sector.

Pre-lease contracts between a social landlord and a tenant who is a natural person (private customers) during the construction of the property do not exist in France where it is impossible to rent to a natural person until the property is completed. Moreover, such a mechanism would not be justified given that demand is necessarily greater than supply for these types of vacant housing, which is also recognized by the EBA in the consultation: "A common characteristic concerning public housing projects and entities operating on a not-for-profit basis with the aim of providing affordable housing to the general public is that the demand generally exceeds the supply of housing units."

Not to mention the general interest vocation of providing access to housing for populations with modest incomes:

1. The construction and management of a social rental stock, intended for populations with modest incomes, represents a service of general interest delegated by the State to the Social Housing (LS) actors, namely the HLM and SEM Immobilière organizations, in return for subsidies and tax advantages.
2. The HLM sector, which carries out a mission of general interest, is under control with for the most part:
   • An exhaustive list of activities that can be carried out and specified in the Construction and Housing Code (CCH); 
   • Specific regulations and controls;
   • Interventions by the Public Authorities, in particular for the sale of housing carried out under the control of the State through its territorial representative, the prefect;
   • A limited scope of management decisions with, for example, contractual procedures with terms similar to those of public contracts or financial decisions requiring the prior approval of the Board of Directors, as well as financial alert systems provided for by the CCH, in particular the ratio of net cash flow to revenue.   
     This ratio appears in the regulatory statements of the annual accounts with an alert threshold of less than 3%, the breaching of this threshold leading to a mandatory deliberation by the Board of Directors or Management Board of the organization on the causes of this situation and on the internal measures to be implemented to redress the organization's financial situation.
   • The mandatory conclusion of a contract between the State and each social housing body in the form of a Social Utility Agreement (CUS) aimed at defining for a period of 6 years: the management of assets, the social occupation of the stock, the rent policy and the quality of the service provided to tenants, the policy carried out in favour of accommodation, home ownership and concertation locative avec, pour chaque aspect, the production of indicators measuring the level of achievement of the objectives set.  
   • The Social Housing sector is financed mainly by parastatal savings funds fed with the resources of the Livret A and via regulated loans, the distribution of which is mainly provided by the Caisse des Dépôts et Consignations (CDC), with private bank financing granted to social landlords supplementing the part not covered by the CDC.

1. Criterion 2 – Sufficient capital contribution 

The amount of equity provided by the social landlord must not be less than 35% of the value of the property after construction in order to apply the risk weight. This is the same indicator and metric as for the financing of real estate development operations, even though these are very different operations and actors. The specificities of social housing are therefore not taken into account in this indicator. This criterion is not met because the threshold imposed is well above market practices, in particular in view of the following elements:

• The activity of social landlords is very tightly regulated and their operating rules greatly reduce their level of risk:
  • The assets of social housing organisations are inalienable: apart from sales to occupants carried out under State control, only another social housing organisation can acquire or manage a social asset, the possibilities of allocating assets to shareholders being very limited.
  • The shares are transferable but the other own funds does not belong to the shareholder: a social housing entity is therefore impervious to the financial health of its shareholder if the latter were to default, the principle of contagion therefore would not apply to social housing organisations.
  • The value of the shares is limited to that of the share capital and the distribution of dividends is capped at a level indexed to the Livret A.
  • Dividends are systematically put in reserve.
• Parastatal (“paraétatique”) control bodies make it possible to prevent the default of social landlords and to take appropriate recovery measures if necessary. The National Agency for the Control of Social Housing (ANCOLS) is the sole player in the control and evaluation of Social Housing and Action Logement bodies. Its missions are the verification and evaluation of housing organizations through on-site checks to evaluate their management as well as sectoral evaluation with the realization of studies and the production of statistics;
• The Social Housing Guarantee Fund (CGLLS) also has the mission of ensuring the sustainability of social landlords and in particular:
  • Prevent the difficulties of fragile organizations (financing of studies or assistance, consolidation of equity capital, etc.);
  • To help organisations in difficulty to return to an operating balance through loan or grant agreements to clear losses or via assistance missions for the implementation of programmes of measures aimed at enabling a rapid return to operating balance within the framework of a protocol.
  • Examines the financial situation of the applicant body in order to arrive at a protocol integrating joint interventions of the organisation, the local authority, the reference shareholder and the CGLLS;
  • Granting grants or loans under certain conditions.

The number of organizations under the CGLLS protocol is low: in 2021, there were 37 with 3 protocols negotiated during the year, to be compared with a workforce of 396 HLM organizations on 1/01/22, including 165 ESH, 190 DPOs and 41 Cooperatives.

• A system for the prevention and treatment of the difficulties of ESH is present within the ESH Federation and takes the form of a Self-Control and Prevention Committee (CAP) whose mission is indeed a self-control that the profession imposes on itself to collectively ensure the financial security of each ESH through risk analyses, advice and appropriate assistance through the Individual Situation Files (DIS) and Individual Forecast Files (DIP).

[1] EBA/CP/2024/12

[2] Répertoire des logements locatifs des bailleurs sociaux (RPLS) du ministère de la transition écologique et de la cohésion des territoires

Name of the organization