At its meeting on Tuesday last, the government of Iceland approved the motion by Ásmundur Einar Daðason, the Minister of Social Affairs and Children, that the operations of the Housing Financing Fund be divided into two sections. This means that the part that relates to financial management for the Fund's older loan portfolio will be separated from the Fund's main activities as it is today. Since 2012, when the Fund's general lending to the public for housing purchases was largely discontinued following the EFTA Surveillance Authority's (ESA) ruling, that the loans were in conflict with the rules of the EEA Agreement, it has been apparent that measures would have to be taken that would affect the operations of HFF. A committee, appointed last September, has been evaluating changes to the fund's operations, and the committee’s conclusion was to make the proposal to the minister that this action be taken.
The role of the Housing Financing Fund has changed considerably in recent years with changes to the Housing Act, and is today the institution that carries out the implementation of housing policy in Iceland. That includes policy formulation and research on the housing market, overseeing public housing support and the provision of social housing loans. Following the division of HFF operations, a powerful housing institution is created that will play a key role in the housing market, conducting housing implementation and coordination in housing policy throughout Iceland, as well as being a powerful partner for local government in their housing planning.
At the same Government meeting, the minister, Ásmundur Einar, also announced that it would be an option to merge the Icelandic Construction Authority with the main activities of the Housing Financing Fund as it is today. The Minister intends to appoint a committee in the very near future, which will examine in detail the advantages and disadvantages of the mergers of these two institutions.
The proposal for the merger of these institutions comes as a result of a new division of assignments between the ministries of the Government, as building and construction issues were at the end of last year, transferred entirely to the Ministry of Social Affairs. On that occasion, Ásmundur Einar said it was important to further strengthen the administration of the housing and construction market, so that situations in the housing marked can be met more quickly.