The operating business model of the Human Settlements Development Bank (HSDB) has been completed and approved by National Treasury.

Human Settlements, Water and Sanitation Minister Lindiwe Sisulu confirmed in response to a parliamentary question posed by Democratic Alliance MP Mimmy Gondwe that the process to establish the bank is proceeding.

"The consolidation of National Urban Reconstruction and Housing Agency (NURCHA) and the Rural Housing Loan Fund (RHLF) into the National Housing Finance Corporation (NHFC) was finalised in October 2018, following the formal approval of the merger by MinMEC and National Treasury," Sisulu said.

She said the HSDB Bill is among the top priorities of the Departmental 2020 legislative programme that has been submitted to Deputy President David Mabuza, the leader of government business in Parliament.

"The office of the state law advisor has already been consulted on the contents of the draft HSDB Bill and a process is under way to incorporate the comments received for consideration by Cabinet. Once Cabinet approves the Bill, the next step would be to table it in Parliament for processing," Sisulu said.

During her Parliamentary budget vote address in 2017, Sisulu announced the launch of the HSDB.

In July 2019, she said the bank was set up as top-level financial institution to cater to the housing sector needs.

Once fully established, the HSDB will be central to all financing activities and market-making activities across the housing supply chain.

Sisulu said the bank will participate directly in the risk and funding of large-scale development projects and programmes.

It will also facilitate and fund the requirements of housing finance "intermediaries" operating in the social and gap markets.

President Cyril Ramaphosa also touched on the HSDB in his 2019 State of the Nation Address, where he said, "to effectively address the substantial housing backlog, models of financing human settlements needed to be developed".

Gondwe also asked what progress Sisulu's department had made in developing a policy framework on social and rental interventions.

Sisulu said: The department, in collaboration with the Social Housing Regulatory Authority (SHRA), commenced with a process to develop a policy framework on rental and social housing interventions as guided by the National Rental Housing Act, the Social Housing Act and the Rental Amendment Act. This work is aimed at addressing all other forms of rental, such as backyard, private rental, large- and small-scale rental.

She said it is anticipated that the final draft of the policy framework will be concluded during the 2020/21 financial year, after conducting a socioeconomic impact assessment system.