The proposed project involves an IFC investment in a local currency securitization warehouse line for SA Home Loans, South Africa’s first specialized residential mortgage origination, servicing and securitization company based in Durban, South Africa. The principal business objective of SA Home Loans is to originate high quality residential mortgages featuring strong borrower repayment capacity and low Loan to Value (LTV) ratios. SA Home Loans intends to fund its origination of the mortgages through the issuance of credit-rated, mortgage-backed securities, initially in the domestic market. Using a combination of efficient, securitization-driven funding and low overheads, SA Home Loans will offer mortgage rates 2 to 3 percent lower than those currently offered by the large commercial banks, which are the sole source of private sector mortgage finance in South Africa at this time. The purpose of the project is to provide SA Home Loans with sufficient warehousing capacity to fund its growing mortgage originations prior to their securitization in the domestic market. IFC has been asked to be a lead investor in the Warehouse Line, which is being arranged by J.P. Morgan with domestic banks in South Africa. The proposed Warehouse Line is fundamental to the company’s ongoing viability. The project is expected to have a significant developmental impact in a number of areas: (i) it will improve the feasibility of the securitization of domestic assets in South Africa by allowing the accumulation of an economically efficient sized pool of assets, (ii) it will introduce the concept of securitization warehouse lending in the local banking market and (iii) by helping a pioneering initiative like SA Home Loans succeed the project will improve competition in the domestic market for housing finance.