Governance

The governance of the SGFGAS was devised to get both the State as well as the banks involved in operating the body and in defining the products for which the body is responsible.

Legal structure of a business company

SGFGAS is organized as a business company (of type "société anonyme"), and credit institutions taking part in the various property-purchase programs must hold shares in SGFGAS. Although the State owns none of its capital, it nevertheless plays an essential role in that it has two Government representatives (one from the Treasury and one from the Ministry for Housing, and they can veto any decisions relating to SGFGAS's financial activities.

SGFGAS is comprised of 7 companies or shareholder groupings. 

In addition to the Chairman, the SGFGAS Board of Directors consists of 10 Directors. Since 9 February 2010, when Banque Postale joined, the Board has 5 members representing commercial banks (BNP Paribas, LCL, Société Générale, Crédit Foncier de France, La Banque Postale), and 4 members representing cooperate¹ banks (Banques Populaires & Caisses d'Epargne (BPCE), Crédit Agricole, Crédit Immobilier, Crédit Mutuel). In its capacity as a founder member, the National Federation of Crédit Agricole also has a seat.

Mr was appointed as new Chairman of the Board on 29 November 2013, following prior consultation with the Board of Directors in November 2013. The same Board meeting decided to renew the tenure of the Managing Director, Mr .

Apart from Board meetings, SGFGAS organizes, at least every quarter, themed consultation meetings (technical committees) with the lending establishments, where each type of special mortgage is discussed.

A framework of contractual relationships

The State defines the principles of the programs entrusted to SGFGAS, doing mainly so by means of legal text incorporated to the French Building and Housing Code. This led to SGFGAS being appointed by the State of France to manage the FGAS program in all its successive forms, and in particular to compensate lenders according to default declarations made by them (see "Mortgage guarantee scheme" for more details). Likewise, various legal texts (see below) have been enacted to entrust SGFGAS with its missions relative to the PTZ and the Home Savings program.

The exact implementation is specified by means of agreements defining the respective roles and responsibilities of the State, SGFGAS and the lending institutions in the distribution of these special mortgages. Such agreements have been signed for Affordable Housing loans, Zero-Interest Loans and Eco-loans, as well as the Home Savings program. The purpose of this system is to get the banks involved with the implementation and evolution of procedures.

A highly automated operation

The functioning of SGFGAS is based on automating information exchanges with the lenders. Specifically, the latter upload an "information file" with details for each eligible mortgage. SGFGAS makes an initial examination of the information so transmitted, following which the loan applications can be set for processing. SGFGAS also has a team of inspectors empowered to carry out after-the-fact checks, from their office on the basis of documents, or by physically calling out, in order to verify the conformity of the declared data with the documents presented in the mortgage dossier.

At the appropriate time, SGFGAS will either pay the lending institution the necessary sum to cover a default (for a guaranteed mortgage) or pay them the subsidy to which they are entitled (1995 to 2005 for 0% mortgages) or confirm their Tax Credit entitlement (a form which, since February 2005, covers government assistance accompanying the 0% Mortgage). Thanks to a high level of IT integration, SGFGAS is able to cope with a constant increase in the number of incoming applications without increasing costs nor the workforce (constant at about 30 staff).

The main legal texts

The founding texts are the Finances Bill of 30 December 1992 (article 126); the Finances bill of 30 December 2005 (article 94) and the amended Finances Bill of 30 December 2006 (article 143) which provided for the granting of the State guarantee as part of the FGAS, as well as the entrusting of the management of this guarantee to a company in which the lending institutions would be shareholders, and whose bylaws would be approved by decree, and whose chairman (of the board of directors) would be appointed by official order: SGFGAS.

The 0% mortgage ("PTZ") was established by a regulation (decree) of 29 September 1995, was subsequently amended on several occasions, and then inserted via articles R 317-1 and following in the Building and Housing Code (CCH).

The New 0% mortgage ("NPTZ") was established by the 2005 Finances Bill of 30 December 2004, was appended by a decree issued 31 January 2005 which was formalized via articles R 318-1 and following of the Building and Housing Code.

The PTZ+ (a revamped version of the standard PTZ mortgage) was established by the 2011 Finances Bill, was modified on a number of occasions, most recently in October 2014 and on 1 January 2015, and is formalized by articles L 31-10-5 and R 31-10-1 and following of the Building and Housing Code.

Lastly, the 0% Eco Loan, created by the 2009 Finances Bill, and appended by decrees (the first of which were issued on 30 March 2009) is formalized by articles R 319-1 and following of the Building and Housing Code. The collective 0% Eco Loan (aimed at jointly owned properties such as condominiums) arose from article 103 of the law n° 2012-387 of 22 March 2012 relative to the simplification of the law and the reduction in the number of administrative procedures (the "Warsmann" law).

The initial Finances Bill for 2013 entrusted SGFGAS with the monitoring and verification of Home Savings Plans and Home Savings Accounts (article L 315-5-1 of the Building and Housing Code).

¹ known in France as "banques mutualistes"