DBRS Morningstar Releases “NHG: A Dutch Loan Guarantee Program That Is Both Socially Supportive and Credit Positive” Commentary

DBRS Morningstar released a commentary titled “NHG: A Dutch Loan Guarantee Program That Is Both Socially Supportive and Credit Positive”, summarising the Dutch Nationale Hypotheek Garantie (NHG) mortgage guarantee scheme and why its aims are more than just a credit positive. The NHG is a scheme whereby an established government-guaranteed fund, Stichting Waarborgfonds Eigen Woningen, provides a guarantee on mortgage loans meeting certain criteria. The results are a lower cost of borrowing and lower risks for lenders should borrowers default.

DBRS Morningstar recently evaluated the NHG as a social factor with positive credit implications when we rate Dutch mortgage transactions, most recently for Hypenn RMBS VII B.V. This evaluation is in line with DBRS Morningstar’s views set out in our <a href="https://www.dbrsmorningstar.com/research/357792/dbrs-morningstars-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings" target="_blank">Approach to Environmental, Social, and Governance (ESG) Risk Factors in Credit Ratings</a>. The ESG factor associated with the NHG scheme in the Netherlands is, in our view, the Social Impact of Products & Services, as well as a minor element of the Carbon & Green House Gases factor.

In summary, we have found that:
-- The NHG scheme’s goals of home improvement and preservation of the Dutch housing stock provide strong societal benefits under the umbrella of ESG.
-- It is increasingly being used for home energy improvements.
-- NHG support for home improvement provides a societal benefit to the Netherlands as well as reducing the borrowers’ credit risk and has been an influential credit factor in several DBRS Morningstar credit ratings.

For further details, please see the full commentary.

Notes:
The full commentary is available at www.dbrsmorningstar.com.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].

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