The Purpose of this Briefing In 1990, Poland and Hungary chose—like most countries in the developed world—to move to a system of financing housing largely from private capital. This entailed the creation of a system with individual mortgages for household purchase, construction loans for builders, and entering
into partnership with commercial capital markets for developing social housing for poorer households.
By the year 2000, Poland had developed an effective mortgage system: competitive, relatively efficient, accessible to a large part of the population, and reasonably robust. Hungary’s system had developed along somewhat different lines, and under different
circumstances. Currently less active a market than Poland’s, it promises to become a model of its kind. Although mistakes have been made, this is a story of success.
This briefing manual, then, draws out the lessons learned from the experiences of Poland and Hungary in the development of a market-based housing finance system. It is primarily intended to be of value to professionals in those countries struggling with the early stages of reform of their housing finance systems. It is intended to be read by bankers and government officials, real estate professionals, NGOs and consultants, as well as by program managers from USAID and other donor organizations.