Disclosure Booklet 2020JHFoduced intr “Flat 35S”, a lowered interest rate applied “Flat 35”...

　　　　住宅金融支援機構DL2020_H1-4_ 英文 _五林 .ai　2020.08.24　　　　

1. This booklet is a disclosure material prepared based on the “Law Concerning Access to Information Held by Incorporated Administrative Agencies.” (Law No. 140 of 2001). Moreover, this booklet is designed to enhance understanding on the part of a broad range of JHF’s stakeholders about the contents of its business operations and its efforts to address the creation of sustainable values. This is realized by providing financial and non-financial information as well as by referring to the “International Integrated Reporting Framework” presented in the International Integrated Reporting Council (the IIRC).

2. Figures in this booklet(1) Rounding of figures Amounts are rounded to the nearest unit. Percentages (%) are rounded off at the second decimal point in principle. Thus,

a figure in the total section may not equal the sum of the itemized amounts.(2)Indication method Items with values less than the unit are indicated as “0” while items with no

statistical figures are indicated as “—.”3. Information on Japan Housing Finance Agency (JHF), including that on this

booklet, is available on JHF’s website (https://www.jhf.go.jp).4. Fiscal year (FY) begins in April and ends in March, therefore, financial results

of FY are figures as of March end.5. If there is any material difference between Japanese original version and this

English translation, the Japanese original version shall prevail.August 2020

Issued by:Japan Housing Finance AgencyPublic Relations Group, Corporate Strategy Department 1-4-10 Koraku, Bunkyo-ku, Tokyo, Japan 112-8570TEL: +81-(0)3-5800-8019https://www.jhf.go.jp

This booklet is printed on 70% post-consumer recycled paper with vegetable oil ink.

Disclosure Booklet2020

Disclosure2020

2 Disclosure Booklet 2020

About JHF

Business Overview JHFfocusesonsecuritizationsupportbusiness,abusinesstosupportoriginationoffixed-ratehousingloansbypri-vatefinancialinstitutions,butalsoconductshousingloaninsurancebusinesstopromotesmoothoriginationofhousingloansbyprivatefinancialinstitutions,andloanoriginationbusinessinareasimportantfromthepolicyperspective,yetdifficultforprivatefinancialinstitutionstoenter. JHFstrivestoupgradethehousinglifestandardsandservesitscorporatesocialresponsibility(CSR)bysmoothandefficientoriginationofhousingloansrequiredtoconstructhouses,thefoundationsofhousinglifeofthecustomers.

❶ Securitization support business (“Flat 35”)Supportoriginationoffullyfixed-ratehousingloansofprivatefinancialinstitutionsbythefollowingprograms:• Flat35(PurchaseProgram):JHFpurchasesfullyfixed-ratehousingloansfromprivatefinancialinstitutionsandse-curitizesthem.

• Flat35(GuaranteeProgram):Privatefinancialinstitutionssecuritizefullyfixed-ratehousingloansinsuredbyJHF,andJHFguaranteesinterestandprincipalpaymenttoinvestors.

❷ Housing loan insurance businessSupportsmoothoriginationofhousingloansofprivatefinancialinstitutionsbyestablishingaframeworktopayinsur-ancemoniestoprivatefinancialinstitutionspursuanttopreviouslyconcludedinsurancepolicythatcovershousingloanlossesduetounexpectedevents.

❸ Loan origination business (Policy-related loans including loans for disaster recovery and urban development loans)ByprovidingdirectloansfromJHF,JHFsupports:housing-reconstructioninareasaffectedbytheGreatEastJapanEarthquakeandothernaturaldisasters,thebusinessthatfacilitatestherenewalofurbanfunctionsandimprovesdi-saster-resilienceincludingurbanredevelopmentprojectsandrebuildingofcondominiumsandimplementingworkforearthquake-resistantimprovement,andpromotionofrentalhousingsupplytocontributetostablelivingforchild-rear-inghouseholdsandtheelderlies.

❹ Promotion of quality housingPromoteinstallmentofqualityhousingbyrequiringthehouseeligibleforFlat35andJHFloanstofulfilthetechnicalstandards.�

❺ Group credit life insurance businessProvidesecurityforborrowersofFlat35(PurchaseProgram)andJHForiginatedloansbyapplyinginsurancemoneypayablefromthelifeinsurancecompanyincaseofborrower’sdeathordisabilityandrepaytheremainingamountofhousingloanoftheborrower.

❻ Management of outstanding loansConductappropriatemanagementofoutstandingloansbycarefullyrespondingtoloanrepaymentmodificationforborrowersfacingdifficultiesinpayingbacktheirhousingloan,andbyreductionofdelinquentloans.

❼ International business Implementresearch,study,andthedisseminationofinformationpursuanttotheActonPromotingEntryofJapaneseBusinessOperatorsintoOverseasSocialcapitalprojects(ActNo.40of2018).

❽ Survey operation concerning domestic housing finance Conductresearchandsurveysondomestichousingfinancemarkets.

❾ FinancingFinancingmainlythroughtheissuanceofMortgage-backedSecurities(MBSs)andStraightBonds(SBs).

3Disclosure Booklet 2020

About JHFActivities of JHF

Corporate Governance

Providing Fixed-rate Housing Loans through Collaboration with Private Financial Institutions

Business Overview

Providing Fixed-rate Housing Loans through Collaboration with Private Financial Institutions

Security of by fixing the interest rate until the maturity “Flat35”isafixedinterestratemortgagethatJHFofferstopeopleincollaborationwithprivatefinancialinstitutions.Becauseafixedinterestratemortgageisatypeofloanhavingtheborrowingrateandtheamountofinstallmentsfixeduntilthematurityassoonastheloanisclosed,whichenablescustomerstomakelongtermplansforliving. SincethestartoftheprograminOctober2003,morethan1.1millioncustomershasused“Flat35”nationwide.

“Flat 35”

① Security of fixed interest rate until the maturity ② Support building of secure housing by offering a variety of options.

④ Extend consultation during the repayment period③ Neither a co-signer nor fee for prepayment is neededFour meritsof “Flat 35”

※ Total number of financial institutions participating in the　guarantee program “Flat 35”: 10

City Banks/Trust Banks: 6

Regional Banks: 64

Regional Banks Ⅱ: 35

Mortgage Banks and others: 24

Credit Associations/Credit Cooperatives: 176

Labour Banks: 12

Credit Federations of Agricultural Cooperatives: 9

Total number of the participating institutions: 326

(Reference) Breakdown of the numbers of financial institutions participating in the purchase program “Flat 35” as of

March 31, 2020.

Customer ①Applying for 　Flat 35

②Disbursement of Flat 35

⑧Repayment

③Assigning housing 　loans

⑨Delivery of cash collected

⑤Collateral for MBS

⑩Pass-through payment of principal & interest to MBS investors

④Entrust housing loan as collateral

Applying for inspection of construction

Issuing conformity certificates

⑥ Proceed of MBS

⑤Issuing mortgage-backed securities (MBS)

⑦Reimbursement for purchased housing loans

Investors

Inspection institutions

Financial institutions

Trust banks, etc.

Scheme of Purchase Program

Activities of JHF

8,948

0

10,78111,207

5,916

14,172

12,16812,108

9,743 7,084

5,844

10,106 10,410

9,088

11,057

10,296

9,205

10,618

8,072

9,846

1.251.25

0.900.90

1.121.12 1.081.08

1.361.361.451.45

1.271.27

1.111.111.241.24

1.541.54

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

5,000

10,000

15,000

20,000

25,000Unit: houses Unit: %

FY2015 FY2016 FY2017 FY2018 FY2019

The lowest interest rates of “Flat 35 (Purchase Program)” *2 (Right scale)

Termination of 0.6％ interest-rate reduction at the end of Jan. 2016 (▲0.6％→▲0.3％)

8,443

11,092

9,997

The group credit life insurance system changed since applications accepted on October 1, 2017.(Expenses necessary for enrollment in group credit life insurance are included in monthly loan payments, and coverage specifics have been enhanced)

｝Overall “Flat 35”“Flat 35S”The number of applications*1

for “Flat 35” (Left scale)

*1 Total number of houses applying for “Flat 35 (Purchase Program / Guarantee Program)”.

*2 The lowest interest rates indicated are those of-fered by financial institutions and applicable to loans having tenors between 21 years and 35 years. Interest rates vary according to loan-to-value ratio (90% or lower, or over 90%) for loans, therefore indicated are interest rates of loan-to-value ratio 90% or lower. In addition, as interest rates differ depending on the type of group cred-it life insurance, indicated are interest rates of JHF group credit life insurance applied since October 2017.

〈Trend of applications for “Flat 35” and interest rates〉

JHFintroduced“Flat35S”,aloweredinterestrateapplied“Flat35”andappliedforacertainperiod,tocustomerspur-chasinghighqualityhousing,suchaslong-lifequalityhousing,andtocontributetoformationofhighqualityhousingstock.

Superior energy-efficient house

●Thermal insulation fully installed●Double glazed windows and other energy saving features

Increase insulation capacity of houses and reduce consumption of electricity and fossil fuels such as kerosene used in heating and cooling is necessary for conservation of the global environment.

Superior earthquake-resilient house

●Secure wall balance and placement●Enhanced wall joints●Enhanced housing foundation and others

To prepare for large-scale earthquakes by increasing earthquake-resistance capability and by ensuring the safety of housing is important.

Superior barrier-free performance featured house

●Without difference in level on the floor●Handrail installment●Enough width of passeageways

Housing livable for the elderly with preparation for home nursing care is the fundamental of future housing construction.

Superior durability and flexibility featured house

●Anti-decay and anti-termite features●Attic and under floor ventilations and others

Formation of high quality housing stock is impera-tive for Japan’ s pre-matured society. Building a long-lasting house and using it with care will lead to global environment conservation.

Promote dissemination of high quality housing, such as long-life quality housing by introducing “Flat 35S”


Financial Conditions (FY2019 results)

▲1,000

0

1,000

2,000

3,000

4,000

5,000

FY2019FY2018FY2017FY2016FY2015FY2014FY2013FY2012FY2011FY2010FY2009FY2008FY2007

The second mid-term target period The third mid-termtarget periodThe first mid-term target period

▲171▲33 ▲58

338 26998

572 670789 663 645

1,458

2,122

2,767

3,345

770

4,153

821

4,736

596

▲165▲28▲193 ▲251 ▲509

▲258

Net income or loss (▲)Surplus carried forward orloss carried forward (▲)

(Units: ¥100 million)

〈Status of profit and loss, etc. of Securitization Support Account〉

▲8,000

▲6,000

▲4,000

▲2,000

0

2,000

4,000

6,000




▲1,693

▲5,284

▲97

▲5,381

▲1,445

▲6,826

▲169

▲6,994▲6,158

▲4,499

▲2,844

1,655837

1,659 1,760

▲1,084

222

1,211 1,045

2,478

1,074

3,551

796

4,348

1,4331,306

Net income or loss (▲)Surplus carried forward orloss carried forward (▲)

〈Status of profit and loss, etc. of Outstanding Loans Management Account〉

▲4,000

▲2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000



＊As a result of distributions from the reserve fund (retained earnings) for the previous mid-term target period, JHF paid ¥30.9 billion for FY2012 and ¥44.7 billion for FY2017 to the National Treasury.

796億円


▲1,569▲1,414

▲146

▲1,777▲1,468

▲3,310

▲366

▲3,720▲2,496

▲792

1,5762,459

2,0921,323

2,824

4,313

2,159 2,025 1,962 2,044

9,739

11,747

1,514

13,237

8,314

6,385

Net income or loss (▲)Surplus carried forward or loss carried forward (▲)

Securitization SupportAccount ¥59.6 billion

Outstanding LoanManagement Account¥79.6 billion

〈Whole JHF’s profit and loss etc.〉

Status of profit and loss

〈Securitization Support Account〉 In the Securitization Support Account JHF re-portednetincomeof¥59.6billion,down¥22.5bil-lionYoYduetoanincreaseinallowanceforcreditlossesassociatedwiththeCOVID-19pandemic. Asexpensestendtoberealizedlaterthanearn-ings due to credit risk, etc. of the SecuritizationSupportBusiness(PurchaseProgram),thelossinthelatterhalfwillbeoffsetbyprofitinthefirsthalfof the loan period, therefore, in order to prepareagainst futureemergenceofcredit risk,etc., JHFhascarriedovertheentireamountofnetincomeasreservefunds(Article44,paragraph1oftheActonGeneral Rules for Incorporated AdministrativeAgencies).

〈Outstanding Loans Management Account＊〉 In the Outstanding Loans Management Ac-countJHFreportednetincomeof¥79.6billion,down¥27.7billionYoYduetoanincreaseinal-lowance for credit losses associated with theCOVID-19pandemic. Fromtheperspectiveofconcludingthebusi-nesssmoothlywithoutincurringnewliabilitiestoNationalTreasury,andtoprepare against future emergenceofcredit risk,etc., JHFhascarriedforwardtheentireamountofsurplusasreserves(Article7,paragraph7ofsupplementaryprovi-sions of Act on the Japan Housing FinanceAgency,IndependentAdministrativeAgency).

〈Housing Loan Insurance Account〉 In theHousingLoan InsuranceAccountJHFreportednet incomeof ¥6.9billion, down¥0.2billionYoYandretainedearningsof¥22.6billion.

〈Property Accumulation Housing Fund Loan Account〉 In the Property Accumulation Housing LoanFundAccountJHFreportednetincomeof¥0.01billion,down¥0.6billionYoYandretainedearn-ings of ¥36.9billion.

〈Housing Loan Fund, etc. Account〉 IntheHousingLoanFund,etc.AccountJHFreportednet incomeof ¥5.2billion, down¥1.9billionYoYandretainedearningsof¥355.7bil-lion including reserve of ¥298.3 billion in thegroupcreditlifeinsurancebusiness.

〈The overall net income of the five accounts〉 JHFreportednetincomeof¥151.4billionasawholeentitymergingallofthefiveabove-men-tionedaccounts.

* Since the Outstanding Loans Management Account is the account that manages the loans originated by the former Government Hous-ing Loan Corporation before FY2004, therefore, the outstanding loan amount will continue decreasing as no new loans will be origi-nated.

Financial highlights, points in performance results


About JHFActivities of JHF


Financial highlights, points in performance results

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000


378,949

421,602

27,817

14,836

332,983

15,792

32,863

381,638

283,175

16,963

40,540

340,678

236,456

17,017

64,372

317,846

197,020

16,535

86,099

299,654

165,135

15,579

99,827

280,541

139,345

109,818

14,845

264,009

118,144

116,394

14,260

248,797242,245

100,018

13,903

128,323 136,616

13,271

83,459

233,346

147,979

13,640

71,084

232,702

159,061

14,649

60,741

234,451

170,594

15,667

52,102

238,364

2,595

27,879

68,013

324,619

423,106

4,969

25,862

76,114

281,931

388,876

7,229

25,880

84,194

245,561

362,864

11,251

18,539

90,301

214,204

334,295

15,271 16,226

101,237

175,225

307,959

20,162 14,265

105,895

152,646

292,968

21,921 12,758

108,974

131,109

274,763

22,211 11,732

110,462

109,885

254,290243,675

89,178

11,891 25,588

117,018 121,244

28,644 12,390

71,185

233,462

127,420

32,14213,247

56,290

229,099

135,990

36,243

14,151

42,273

228,657

144,293

40,942

15,162

28,542

228,939


Loans (Outstanding Loan Management Account)

Loans (Other than Outstanding Loan Management Account)

Purchased loans


Borrowings from FILPOther bonds, etc.SBMBS

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000


378,949

421,602

27,817

14,836

332,983

15,792

32,863

381,638

283,175

16,963

40,540

340,678

236,456

17,017

64,372

317,846

197,020

16,535

86,099

299,654

165,135

15,579

99,827

280,541

139,345

109,818

14,845

264,009

118,144

116,394

14,260

248,797242,245

100,018

13,903

128,323 136,616

13,271

83,459

233,346

147,979

13,640

71,084

232,702

159,061

14,649

60,741

234,451

170,594

15,667

52,102

238,364

2,595

27,879

68,013

324,619

423,106

4,969

25,862

76,114

281,931

388,876

7,229

25,880

84,194

245,561

362,864

11,251

18,539

90,301

214,204

334,295

15,271 16,226

101,237

175,225

307,959

20,162 14,265

105,895

152,646

292,968

21,921 12,758

108,974

131,109

274,763

22,211 11,732

110,462

109,885

254,290243,675

89,178

11,891 25,588

117,018 121,244

28,644 12,390

71,185

233,462

127,420

32,14213,247

56,290

229,099

135,990

36,243

14,151

42,273

228,657

144,293

40,942

15,162

28,542

228,939


Loans (Outstanding Loan Management Account)

Loans (Other than Outstanding Loan Management Account)

Purchased loans


Borrowings from FILPOther bonds, etc.SBMBS

〈Outstanding balance of purchased loans and other loans〉

〈Outstanding balance of bonds and borrowings〉

Status of assets and debts

Total assets as of end of FY2019amountedapproximately¥26trillion,andtotaldebtsamountedapproximately¥24trillion.Statusofmajorassetsanddebtsisasfollows.

Status of outstanding balance of purchased loans and other loans

The outstanding balance of “Flat 35(purchasedloans)”attheendofFY2019was about ¥17 trillion. The balance ofpurchased loans has been increasingyear after year and now accounts foraround70%oftheoutstandinghousingloansheldbyJHF.

Status of outstanding balance of bonds and borrowings

Fundraisingfromthefinancialmarketsby issuing mortgage-backed securities(MBS) or straight bond (SB) has in-creasedduetobusinessgrowthof“Flat35 (purchased loans).”Meanwhile, bor-rowingsfromFiscalInvestmentandLoanProgram (FILP), which are borrowingsfromtheJapanesegovernment,havede-clinedduetothedecreaseinthebalancein the Outstanding Loans ManagementAccount.

cf. Credit risk profit loss structure (image)

Asexpensestendtobereal-ized later thanearningsdue tocreditriskandinterestratefluc-tuationriskassociatedwiththeSecuritizationSupportBusiness,etc.,thelossinthelatlerhalfwillbeoffsetbyprofitinthefirsthalfoftheloanperiod.

3533312927252321191715131197531

(Profit and loss)

Single year deficit

(Elapsed years)

Earnings

Expenses

Single year profit and loss

Cumulative profit and loss

Single year profit

Single year profit and loss

Area of profit and area of loss becomes equal

1 4 77 10 13 1616 1919 2222 2525 28 31 34



Governance Structure

Business Management Deliberative Council TheBusinessManagementDeliberativeCouncilwasestablishedtoconductreviewbyexternalexpertsregardingthevalidityofthebusinessmanagementandbyaneutralpositioninaccordancewiththeBasicPolicyonReformofIncor-poratedAdministrativeAgencies(CabinetdecisiononDecember24,2013). SinceitsfirstmeetingheldinMay2014,theCouncilhasmadetoJHFsuggestionsthatwouldleadtotheimprovementoftheproductfeaturesofJHFloansandoperationsofitsbusiness.TheCouncilissuedareportcompilingthesugges-tionsinMarch2018.JHFwouldliketheCounciltocontinuedeliberatingontheappropriatenessofitsbusinessopera-tionsandwilltakeintoaccounttheresultsofthedeliberationsforitsfuturebusinessoperations.

〈Business Management Deliberative Council Members〉As of August 1st, 2020

○Sayuri Kawamura Chief Economist, Economic Department, The Japan Research Institute, Limited

Toru Kurahashi Dean, Faculty of Economics, Dokkyo University

Hiroko Saito Professor, School of International Liberal Arts, Yokohama City University　　

Tadashi Mizushima Chief Executive, Consulting One

◎Takaaki Wakasugi Co-director, Mitsui Life Financial Research Center,University of Michigan Ross School of Business

(◎: Chairman, ○: Deputy Chairman) (Honorific titles omitted)

JHF

Review of evaluation results

Evaluation/Business Improvement order

Commission

Expression of opinions

Appointment Inspection Selection

Inspection

Financial audit

Inspection

Delegation

Business ManagementDeliberative Council

Minister of Land, Infrastructure,Transport and Tourism and Minister of Finance

Committee on the System of Evaluating Incorporated Administrative Agencies

Accounting auditors

Board of Auditof Japan

Financial ServicesAgency

President Auditor Generals

etc.Credit Risk Management Committee Information Security CommitteeALM Risk Management Committee CS CommitteeBusiness Management Committee

Board of Directors (Overall risk management) Compliance Committee

Audit Internal AuditingDepartment

Audit

Auditor Generals

JHF’s Corporate Governance

JHF’s internal governance system

RecognizingitsbasicmissionandsocialresponsibilityasanIncorporatedAdministrativeAgency,JHFacknowledgesstrengtheningofcorporategovernanceisanimportantbusinessissue,therefore,activelyimplementsactivitiestoensuresoundandproperconductofitsbusinesswithhighethicalstandardsandwisdomundertransparentandefficientman-agementbasedontheActonGeneralRulesforIncorporatedAdministrativeAgency. Moreover, inorder todevelop its internalgovernancesystemtoassureappropriatebusinessoperations,JHFhasestablishedtheBasicPolicyonInternalGovernanceandpromotesappropriateinternalgovernancebythePDCAcycleaswellasfurthersophisticationofinternalgovernancebyenhancingthegovernanceenvironment.

事業運営審議委員会報告書 ■はじめ【第１部融資の商品性や業務運営の見直しに繋がった提言】【民業補完の取組】提言１フラット35保証型の推進 ○委員からの提言も踏まえた機構の取組 ○機構の取組に対しての委員会評価

提言２民間の融資との役割分担の仕組み（ルール）づくり○委員からの提言も踏まえた機構の取組 ○機構の取組に対しての委員会評価

【政策実施機能としての取組】提言３住宅金融市場における先導的な取組の実施○委員からの提言も踏まえた機構の取組 ○機構の取組に対しての委員会評価

提言４コンパクトシティ化の促進○委員からの提言も踏まえた機構の取組 ○機構の取組に対しての委員会評価

提言５既存住宅市場の活性化等○委員からの提言も踏まえた機構の取組 ○機構の取組に対しての委員会評価

目　次

【内部統制等の取組】提言６トップからのメッセージの継続的な発信○委員からの提言も踏まえた機構の取組 ○機構の取組に対しての委員会評価

提言７職員のモチベーション向上 ○委員からの提言も踏まえた機構の取組○機構の取組に対しての委員会評価

提言８情報公開への取組○委員からの提言も踏まえた機構の取組 ○機構の取組に対しての委員会評価

【第２部今後の事業運営に関する課題】

課題１証券化市場の育成

課題２地域連携の取組について

課題３既存住宅市場の活性化等

課題４業態を超えたアライアンス

課題５職員のモチベーション向上

参考資料：第１回から第８回までの事業運営審議委員会について



Activities of JHFAbout JHF

ComplianceBusiness Management Deliberative CouncilGovernance Structure

Compliance

JHF distributed a pocket-size edition of compliance manual to all of the executives and employees, which serves as a guide to reconsider the activity of JHF business and to make decision in difficult times.

Report

Consultation/Report

Consultation/Report

Instruction

Check/Instruction

Report the consulted and informed matters

Check/Instruction

Department and offices

Officer to promote Compliance activities (assigned in each department)

Compliance committee (chairperson: President)

Legal Affairs and Compliance DepartmentIn-house and

external contacts

Conformity of compliance

Conformity of compliance

Inordertofulfillthecompliancerequirementswithoutfail,JHFestablishedtheComplianceCommitteechairedbyitspresidentandcomprisingalloftheexecutivesanddirectorsoftherelevantdepartments.Itstaskistodiscussandde-cideonmattersincludingpoliciesrelatedtocomplianceissues.Inaddition,JHFestablishedtheComplianceandLegalDepartment as the head departmentmanaging compliance and assigned officers to promote compliance activitieswithineachdepartment. Furthermore,inordertopreventcomplianceviolationswithinJHF,anin-housecontact(ComplianceHelpLine)andexternalcontactforexternalpersonswereestablished.

Compliance activities

JHFhasestablishedtheComplianceCharterasitsbasicprinciplesofcomplianceandissuedacompliancemanualthatstipulatesthelawsandregulations,rules,socialrequirements,andbusinessrelatedandconcernedmatterstocon-form,whichhasbeennotifiedtoalloftheexecutivesandemployees. Everyyear,JHFstipulatesandexecutestheComplianceProgramasanactiveplanforourcompliance. ConcreteactivitiesundertheComplianceProgramincludee-learningavailabletoalloftheexecutivesandemployees,compliancemeetingconductedbyeachbusinessunits(asmallgroupcasemethoddiscussionwillbeconducted),andcompliance-related informationsharingbyusingthe internalLAN,whicharededicatedtoenhance individualunder-standingofcomplianceandpromoteselfawarenessandactionbythemselves. Inaddition,JHFhassteadilypromotedcomplianceactivitiesconductingthePDCAcycleinaformofquarterlymoni-toringoftheComplianceProgrambytheComplianceCommitteeandmodificationsofComplianceProgrampolicies,ifnecessary.

The Compliance Charter (excerpts)

1. We comply with laws, rules and regulations as well as so-cial norms, and strive to undertake all tasks properly in ef-forts to ensure public confidence.

(1) Compliance with laws and regulations as well as so-cial norms

(2) Proactive and fair disclosure of information (3) Strict information management (4) Resistance against all anti-social parties 2. We thoroughly strive to pursue customer confidence and

satisfaction.

(1) Provide comprehensive housing loan services (2) Conduct appropriate and sufficient explanations (3) Respond sincerely to customer voices 3. We respect the personality of each executive and employ-

ee and endeavor to secure a pleasant working environ-ment.

(1) Respect the personality and character of individuals (2) pleasant working environment


Responses to Anti-social Forces Torejectanyrelationshipwithanti-social forcessuchasorganizedcrimesyndicates,JHFhasexplicitlystatedtheresistanceagainstallanti-socialpartiesinitscompliancecharterandestablishedtheBasicPolicyAgainstAnti-socialForces,whichisavailableonourwebsite.Inaddition,regulationsandmanualsfordealingwithsuchanti-socialforceshavebeenprepared.Throughtheseefforts,JHFhasestablishedaframeworkforreportingtoandconsultingimmediate-lyandproperlywithmanagementandtheLegalAffairsandComplianceDepartment,thedepartmentthatoverseesre-sponsestoanti-socialforces,incaseJHFidentifiesbusinessrelatedwithsuchanti-socialforcesorundueclaimfromsuchforces. JHFalsoconductstrainingandothersessionstoaddressundueclaimsincooperationwiththepoliceandotherrele-vantinstitutions. JHFstipulatesarticleonrejectionofanti-socialforcesinitsbusinesscontractsandeliminatesanyrelationshipnotonlywithorganizedcrimesyndicatesbutalsowithindividualscoexistingwithanti-socialforcestryingtoillegallyreceiveloansforthebenefitofanti-socialforcesrelatedwithorganizedcrimesyndicates. Asanorganization,JHFwillcontinueitscommitmenttowardsrejectingrelationshipwithanti-socialforces.

Information SecurityJHFhasbeendedicatedtoconductinginformationsecuritymeasures.InFY2019,JHFenhancedtheframeworktopromoteinformationsecuritymeasuresasfollows:・ JHFestablishedinformationsecuritymeasuresinaccordancewith“FY2018CommonStandardsforInformationSe-

curityMeasuresforGovernmentAgenciesandRelatedAgencies”establishedbyNISC(NationalCenterofIncidentReadinessandStrategyforCyber-security).

・ JHFimplementedinformationsecuritymeasurespursuanttoFY2019InformationSecurityMeasuresPromotionPlananddefinedFY2020InformationsecurityMeasuresPromotionPlantocontinueitseffortoninformationsecuritymea-sures.

・ JHFnotonlyconductstraininganddrillstopromoteandmaintainliteracyofJHF’smanagersandemployeesoninfor-mationsecuritymeasuresbutalsorevisethepracticepursuanttoself-assessmentandotherresultsregardingInfor-mationSecurityMeasuresPromotionPlan.

Basic Policy against Anti-social Forces

1. JHF commits to have no relationship with any anti-social forces, and the President, including the management and all employ-ees shall never compromise with such forces.

2. JHF commits to establish a framework to reject anti-social forces and distribute to all of the management and employees the manual describing how to deal with such forces.

3. JHF commits to ensure the safety of management and employees who deal with undue claims from anti-social forces. 4. JHF commits to cooperate closely with external institutions, such as the police, National Center for Removal of Criminal Or-

ganizations, and lawyers. 5. JHF commits to take both civil and criminal law related actions against undue claims from anti-social forces.6. JHF commits to never conduct “backstage deals” to conceal facts that undue claims from anti-social forces were made to JHF

due to misconduct of JHF’s business activities or its employees. 7. JHF commits to never provide funds to anti-social forces.




Risk Management Information SecurityResponses to Anti-social Forces

Risk Management

Risk management framework

JHFclassifiesrisksascreditrisk,guaranteerisk,insurancerisk,marketrisk,counterpartycredibilityrisk,liquidityrisk,andoperationalrisk.Intheeventofasignificantchangeineconomicsituation,JHFwillcorrespondinglyspecifythenewrisktobemanaged. JHFsustainstheframeworktoproperlymanagetheserisksinqualitativeandquantitativeaspectsbyappointinganexecutiveandadepartmentresponsibleformanagingeachrisks.Inparticular,the“CreditRiskManagementCommit-tee”wasestablishedtomanagecreditrisk,guaranteerisk,andinsurancerisk,andthe“ALMRiskManagementCom-mittee”wasestablishedtomanagemarketrisk,counterpartycredibilityrisk,andliquidityrisk.Thesecommitteesmoni-torthestatusofeachriskanddiscusstheriskarrangementplanningandproposals. Inaddition,JHFassignsanexecutiveandadepartmentresponsibleforcomprehensiveriskmanagementtoconductcomprehensiveriskmanagementoneachriskandmaintainstheframeworktotrackandevaluatethequantifiedresultandthemanagementstatusofeachriskandperiodicallyreporttheresultstotheBoardofDirectors.

InordertomaintainthehealthinessofJHF’sbusinessandgainunderstandingandtrustofthegeneralpublic,JHFsustainsanorganizationalstructuretoproperlymanagethevariousrisksassociatedwithitsday-to-dayoperations. Tobespecific,JHFhasestablishedriskmanagementregulations,suchas“RiskManagementBasicRules”thatstip-ulatethepurposeofriskmanagement,characteristicsanddefinitions ofindividualrisks,andmethodsandauditingofthestatusofriskmanagementimplementationandalso“CreditRiskManagementRules”thatstipulatesspecificriskmanagementmethodofindividualrisks.Basedontheserules,JHFimplementsriskmanagementincorporatingfeaturesofbusinesses,suchashousingloansandothers,andconductscomprehensiveriskmanagementbyunderstandingandvaluingtheindividualrisksasawholeconsideringJHF’sbusinessandcharacteristics.

Audit

Audit

President

Board of Directors (Comprehensive risk management)

Credit Risk ManagementCommittee

ALM Risk ManagementCommittee

監　事

AuditorGenerals

Internal AuditingDepartment

Comprehensiverisk management

Risk category Responsible departments

Operational risk

Administrative risk

System risk

Legal risk

Human risk

Tangible asset risk

RiskManagementDepartment

Credit riskGuarantee risk

Insurance underwriting risk

Market riskCounterparty credibility risk

Liquidity risk

Risk Management DepartmentCredit Policy Department

Loan Administration Department

Risk Management Department

Department of CS and AdministrationBusiness Administration Department

Information Systems DepartmentLegal Affairs &

Compliance Department

General Affairs andPersonnel Department

Corporate Strategy DepartmentReputation risk

Risk Management Department

Risk management framework


Risk categories

Credit risk CreditriskisdefinedastheriskofJHFsufferingfroma lossdue todeclineordisappearanceof asset valuecaused by deterioration of the creditworthiness of adebtor, which JHF holds as a loan receivable. SincehousingloansconstitutesmajorportionofJHF’sassets,JHFendeavorstoproperlyunderwritethecreditriskofthe loans JHF purchases or originates, and properlymanageandperformself-assessmentoftheloansthatJHFholds,andtrack,analyze,andmanagetheoverallcreditrisk.

Underwriting of purchasing and originated loans JHFdefinescriteriaandmethodsofunderwritingandproperly underwrites the credit risk of purchasing andoriginatedloans.

Self- assessment JHFproperlymanagesthecreditriskofretainedloanclaimsandconductsself-assessmentaccordingtoJHFdefinedself-assessmentcriteriainordertoproperlydis-closefinancial informationpursuanttothe“AccountingStandardsforIncorporatedAdministrativeAgencies.”Tobespecific,JHFcalculatesallowance forcredit lossesbyclassifyingJHF’sassets inaccordancewiththeun-collectibility and loss severity and thenmultiplying theexpected loss given default ratio calculated based onhistoricalperformanceofnon-performingloans.

Credit portfolio management Usingthecreditportfoliomanagementsystemforpe-riodicalmonitoring,JHFanalyzestheutilizationstatusofhousingloans,forecastsfuturelosses,andreviewsthenecessary credit risk premium in order to accuratelyevaluatetheoverallcreditriskofallthedebtsthatJHFholdsand the locationof risks.JHFalsoendeavors tofurtherimproveriskquantificationbyutilizingthecreditportfoliomanagement system to strengthencredit riskmanagement.

Guarantee risk GuaranteeriskisdefinedasriskofJHFsufferingfromalossduetoopposedfluctuationofaguaranteeincidentagainsttheestimatemadeatthetimeoftheguaranteefeecalculation.JHFguaranteesmortgage-backedsecu-rities (MBS) under the securitization support business(guaranteeprogram).JHFperformsproperunderwritingandendeavorstotrack,analyze,andmanagetheoverallguaranteerisk.

Insurance underwriting risk Insurance underwriting risk is defined as the risk ofJHFsufferingfromalossduetoopposedfluctuationofaninsuranceincidentagainsttheestimatesmadeatthetimeof the insurancepremiumcalculation.JHFunder-writesinsurancefornon-performinghousingloansorigi-nated by private financial institutions. JHF performsproper underwriting and endeavors to track, analyze,andmanagetheoverallinsuranceriskbymonitoringuti-lizing the credit portfolio management system and byverifyingwhethertheunusedpolicyreserveissufficientbyconductingfuturecashflowanalysis.

Market risk Marketriskisdefinedastheriskoffluctuationofperi-odicincomeandlossduetochangesintheriskfactors,suchastheinterestratesandothers.SincehousingloanconstitutesmajorportionofJHF’sasset,marketriskin-cludes prepayment risk, refinancing and reinvestmentrisks,andpipelineriskandothers.

Prepayment risk Prepaymentriskisdefinedastheriskofdeteriorationofperiodicincomeandlossduetolossofexpectedin-terestincomecausedbyanincreaseintheloanprepay-mentamounttriggeredbyadeclineintheinterestrate.JHF manages the risk by estimating the prepaymentamountusingtheprepaymentmodelandbysecuritizingthehousingloansandbyissuingbondsofvariousma-turities.

Refinancing and reinvestment risks Refinancingandreinvestmentrisksaredefinedastheriskfordeteriorationofperiodicincomeandlossduetoincreasedinterestpaymentcausedbyincreasedfundingcostorduetodecreasedinterestincomecausedbyde-creasedinterestoninvestmentunderthecircumstancesofrefinancingorreinvestment.JHFmanagestheriskbyutilizingtheinterestmodeltoestimatethecashflowofassetsanddebtsincorporatingfutureinterestratefluc-tuationsandforecastingperiodicalincomeandlossac-cordingtosuchcashflow,andbyperiodicallymonitor-ingtheriskindexes,suchasdurationandothers.

Pipeline risk Pipelineriskisdefinedastheriskoffluctuationofpe-riodicincomeandlossduetofluctuationofinterestratebetweensettlementofhousingloaninterestrateandde-termination of funding interest rate applicable to suchhousingloan.JHFmanagestheriskbyconductinginter-estrateswapsforhedgingpurpose.




Risk Management

Counterparty credibility risk Counterparty credibility risk isdefinedas the riskofJHFsuffering froma lossdue todeclineordisappear-anceofassetvaluescausedbyfinancialdeteriorationofbondissuerswhichJHFinvestsitssurplusfundsandofJHF’sinterestrateswaptransactioncounterparties.JHFdefines the counterparty credibility risk managementmethodsofbondissuersandinterestrateswaptransac-tioncounterpartiesandconductsmonitoring.

Liquidity risk Liquidity risk isdefinedas the riskof JHF forced tofundraisenecessarymoniesatcostsignificantlyhigherthannormalorJHFfallsintocashshortagebyfinancialdeteriorationandincurlossesundersuchsituations:ortheriskoftransactionunavailabilityinthemarketduetomarketturmoilortheriskofJHFforcedtoconducttrans-actionatadversepriceandincurlossesundersuchsit-uations. JHF sets theminimum retained amount of li-quidity assets as a management standard and as ameasure against liquidity risk,which JHF conforms tomaintain in daily operations, therefore, JHF conductsstablecashmanagementoperations.Inaddition,emer-gencycreditlineissettoachievesecuredfundingsourceandJHFsets liquiditymanagementclassifications (de-finedasnormal,cautious,andcrisissituations)accord-ingtotheurgencyoffundingneedsandsetsactionsofJHFunder“cautiousandcrisissituations.”Furthermore,JHFsustainsanorganizationalstructureanddefinesanactionplansocalledcontingencyfundingplantoenablepromptresponsewhenliquidityriskbecomeseminent.

Operational risk OperationalriskisdefinedastheriskofJHFsufferingfromalossduetoimproperoperationalprocesses,im-proper behavior of executives and employees, or im-properoperationofinformationsystems,oranexternalevent.Theriskincludesadministrativerisk,systemrisk,legalrisk,humanrisk,tangibleassetrisk,andreputationrisk. JHF is improving the organizational structure tomanagetheoperationalriskbytrackingtheoccurrenceof evident risks by collecting information, by definingmeasuresbasedoncausalityanalysis,byself-analyzingtheinternalriskofoperationsandthecontrolmethodofconstraining,andbyimplementingRCSA(Risk&ControlSelf-Assessment) to improve operations based on theresultsofselfanalysis.Thefollowingarethedefinitionsandcontrolmethodsofmainoperationalrisks.

Administrative risk AdministrativeriskisdefinedastheriskofJHFsuffer-

ing froma lossdue to inaccurateadministrationwork,accident, ormisconduct andothers by the executivesandemployees(includingothersexcludingJHF’sexecu-tivesandemployeesengagedinJHF’soperations),orbymisconductof thosenotengaged inJHF’soperations.JHFendeavorstoreduceadministrativeriskbyprepar-ingadministrationworkmanuals,byimprovingadminis-trativework,bycompletingcrosscheckingbetweenem-ployees, by providing instructions and training onadministrative work, by performing internal self-checkups,andbycollectingandanalyzinginformationonad-ministrative errors and taking preventive measuresagainstrecurrence.

System risk SystemriskisdefinedastheriskofJHFsufferingfroma lossdue to failure,malfunction,defect,ormisuseofinformationsystems.JHFendeavors to reducesystemriskbytakingmeasuresbasedonclassificationsaccord-ing to importanceand riskassessment,bydevelopingsystemswith functionalities, reliability, and informationsecurityconsidered,andbycollectingandanalyzingin-formationonsystemfailuresandtakingpreventivemea-suresagainstrecurrence.Inpreparationforseriousfail-ures, JHF prepared crisis management manual andendeavorstomaintainstableoperationsbytakingnec-essarymeasures,suchasduplexingsystems,establish-ingbackupcenters,andconductingemergencydrills.

Legal risk LegalriskisdefinedastheriskofJHFsufferingfromalossduetounlawfulacts,inappropriatecontracts,orun-certainty in legal matters related to business transac-tions.JHFendeavorstoreducelegalriskbyconductinglegalcheckofLegalAffairs&ComplianceDepartmentperformsbeforeestablishinginternalregulations,creat-ing contracts, and posting advertisements. JHF alsopreventsviolationsoflawsandregulationsbycollectinginformationonnewlegislation,amendmentsandothers,andbusinessrelatedlegalprecedents.

Others As ameasure for comprehensive riskmanagement,JHFconducts simulationof life-time future income formid-to-longterm. Basedoncashflowincorporatingfutureinterestratesfluctuation,thecross-sectionalrisksimulationcalculateswhetherlossesresultingfrombothcreditriskandmarketriskarecoveredbyinterestincome. Thesimulationalsoperformsstresstestsonthetworisks toverifyfinancialresilience.

　　　　住宅金融支援機構DL2020_H1-4_ 英文 _五林 .ai　2020.08.24　　　　

1. This booklet is a disclosure material prepared based on the “Law Concerning Access to Information Held by Incorporated Administrative Agencies.” (Law No. 140 of 2001). Moreover, this booklet is designed to enhance understanding on the part of a broad range of JHF’s stakeholders about the contents of its business operations and its efforts to address the creation of sustainable values. This is realized by providing financial and non-financial information as well as by referring to the “International Integrated Reporting Framework” presented in the International Integrated Reporting Council (the IIRC).

2. Figures in this booklet(1) Rounding of figures Amounts are rounded to the nearest unit. Percentages (%) are rounded off at the second decimal point in principle. Thus,

a figure in the total section may not equal the sum of the itemized amounts.(2)Indication method Items with values less than the unit are indicated as “0” while items with no

statistical figures are indicated as “—.”3. Information on Japan Housing Finance Agency (JHF), including that on this

booklet, is available on JHF’s website (https://www.jhf.go.jp).4. Fiscal year (FY) begins in April and ends in March, therefore, financial results

of FY are figures as of March end.5. If there is any material difference between Japanese original version and this

English translation, the Japanese original version shall prevail.August 2020

Issued by:Japan Housing Finance AgencyPublic Relations Group, Corporate Strategy Department 1-4-10 Koraku, Bunkyo-ku, Tokyo, Japan 112-8570TEL: +81-(0)3-5800-8019https://www.jhf.go.jp

This booklet is printed on 70% post-consumer recycled paper with vegetable oil ink.

Disclosure Booklet2020

Disclosure2020

Disclosure Booklet 2020JHFoduced intr “Flat 35S”, a lowered interest rate applied “Flat 35”...

Documents

Transcript of Disclosure Booklet 2020JHFoduced intr “Flat 35S”, a lowered interest rate applied “Flat 35”...