A Housing Finance Strategy is a plan for deploying the resources available (and if needed increasing them) to finance the demand for housing by different segments of society. A Housing Finance Strategy is influenced by national, regional and sub-regional agendas and is linked to a wide range of other strategies and factors. This guide sets out the key elements of a housing finance strategy and the process of developing a housing finance strategy, including the study of housing demand, identifying available resources, market forces and strategies for accomplishing housing finance goals and objectives. It provides assistance for member states on how to prepare successful housing finance strategies and action plans. It guides member states in their future housing finance planning and better positions themselves to meet market potentials and address the gap between demand and supply in housing finance. The housing finance strategy requires a clear statement of objectives, an understanding of local conditions, a sense of how policy and program features are linked to outcomes, and a plan for generating and applying the resources needed to implement the strategy (Mayo et al., 1986, p.198). Defining objectives at the start of the planning process is necessary to help guide it, but the final objectives will be informed by the results of the analysis undertaken in strategy preparation. In short, the objectives set will be an iterative process.

Many housing finance strategies are designed by international donors working with housing and finance ministries in developing countries. The strategies are comprehensive. More often they address only the formal sector. The teams who produce these reports make rational recommendations. This is usually where the story ends. In part, this is because governments or ministers change, and with them, the support for these initiatives is often lost. The reports remain unused because the strategy team was too narrow—it excluded the commercial banks, mortgage finance companies, and microlenders who hold the key to the plan’s implementation, including the provision of essential support for legislative changes.