The History of the Norwegian State Housing Bank

The Norwegian State Housing Bank was established by the Parliament on 1 March 1946.

The housing situation was precarious in the districts and towns at both the turn of the previous century and the inter-war period. There was an overwhelming lack of housing at the end of Second World War, and in northern Norway a part of the country had been razed to the ground and had to be rebuilt. As long as there was also a lack of private credit, it was natural to establish a state-owned housing bank.

The Norwegian State Housing Bank was established by the Parliament on 1 March 1946 "to provide central and local government support for reconstruction and new building.” Since its foundation, NSHB has remained the Norwegian government’s most important tool to implement its housing policy and has played a key role in the development of the Norwegian welfare state.

1946–1953: Reconstruction and New Building

The purpose of NSHB was to finance housing at a modest but good standard at a reasonable cost. A considerable effort was done, especially in particularly war damaged areas but it took time to gain momentum due to a lack of building materials. Home construction did not take off on a large scale until the 1950’s but by the end of this initial period, NSHB had financed the construction of a total of 110 000 buildings.

1954–1964: Credit allocations and control

From 1954 the budget set out binding framework for NSHB's activities. Housing purposes, through NSHB, was a priority area for channelling credit. Access to building materials improved, and there was a boost of activity during this period in which NSHB played a vital role and financed 170 000 homes during this 10-year. 

1965–1970: Rationalization of Home Building

Home building increased, in part, due to the utilization of industrial production methods. The private sector grew stronger; peoples’ income and preferences changed and the demand for access to private credit sources increased. As the private investments in the housing sector increased some of NSHB’s loans remained unused. In spite of this NSHB financed the construction of 146 000 homes in six years.

1971-1980 Years of Expansion

The 1970s were expansionary, but full of challenges. High inflation resulted in significant increases in building and site costs and many people struggled with housing costs. NSHB gradually directed its initiatives towards rehabilitation of the existing housing stock. Norwegian home building peaked in 1973, when nearly 45 000 homes were completed. Around 70 percent of these homes were financed through NSHB, which financed a total of nearly 300 000 homes during this period.

1981–1988 Deregulation of the Housing Market

NSHB introduced loans with interest steps which became the dominating loan scheme all the way until 1996, but the loans were no longer issued on as favourable terms as previously. Around 130 000 homes were financed in the period, of which 5 000 were older buildings. NSHB expanded its range of operations and also made a major contribution to the planned urban regeneration measures implemented during this period.

1989–1995: Debt Crisis and Readjustment

The 1990’s started with an economic downturn and the collapse of the private banking system. Many customers were beset by financial problems, and the banks suffered large losses. Again NSHB was used to counteract the business cycle and financed nearly all home building.

1996–2013: From Housing Bank to Welfare Institution and Center of Expertise

NSHB is moving its business away from the financing of new homes towards helping the disadvantaged in the housing market. Loans are issued without subsidies, while grant schemes and housing allowance are aimed at specific groups.

The basic loan scheme replaced the construction loan and the improvement loan in 2005, and has a greater focus on universal design and the environment. The Housing Bank helps meet the requirements of the government's plan for the elderly by financing nearly 40 000 homes for the elderly in local authorities and nearly 3 500 homes organized under the guidance of psychiatric authorities.

The start-up loan was developed together with the local authorities and the private banking industry and launched in 2003. It provides young people and the disadvantaged with an opportunity to establish themselves in their own homes.

2014-present: Executing the Housing for Welfare strategy

The national Housing for Welfare strategy 2014-2020 gives direction our work on affordable and social housing between now and 2020. The Housing Bank usually achieves results by working in partnership with municipalities. The Housing Bank builds the partnership and ensures that housing policies are implemented effectively through our municipal programme. The municipal programme provides the framework for our implementation of the government’s  Housing for welfare strategy. The Housing Bank is leading and coordinating six welfare directorates to help secure that the government provide users with a joined up service.

From 2014 on The Government wanted The Start-up loan to go to people with long-term difficulties, rather than first time byers who could obtain loans from private banks. The result is that the number of loans has been falling after that. In the same time a growing number of loans covering the full purchase price.

From 2016 national responsibility for quality of housing was transferred to The Norwegian Building Authority. The Housing Bank is following up the promotion of universal design and environmentally friendly solutions in the housing and building sectors.