Applications received for the first 10,000 mortgages under the new mortgage refinance scheme reached some 66,402 just within 33 days, a situation stakeholders said on Thursday establishes the huge housing challenge in Nigeria.
The application process for the 10,000 mortgages which only targeted first time home owners was opened on August 4, 2014 by the Federal Government and closed on September 5.
Ngozi Okonjo-Iweala, coordinating minister for the economy and minister of finance, gave the numbers in Abuja as she briefed on progress of the exercise so far, saying more applications were still coming even though it had closed officially.
She announced that the Federal Government has therefore okayed the pre-qualification of all the 66,402 applications received, disclosing that processing will take about 8 weeks.
“We got 66,402 applications. That is more than 6 times oversubscription of our initial 10,000 pilot. It means people are exceedingly interested and more are still coming but we had a closing date for the first wave of applications, and so, we have closed it,” she stated.
Nigeria’s housing deficit is arguably at 17 million units, with additional one million housing units to that number yearly. It is also estimated that bridging the housing gap would require up to N56 trillion.
But the new mortgage refinance scheme saw the establishment of the Nigerian Mortgage Refinance Company (NMRC), a private sector-led initiative to drive government’s aspirations of affordable houses, targets to create about 200,000 mortgages annually.
The coordinating minister for the economy said that government was extremely pleased with the outcome of the process so far as applications were received from across the 36 states including FCT.
Okonjo-Iweala said due to the over six times subscription, a decision has been taken to give all applicants to the lending members of NMRC to share on a pro-rata basis. Lending members of NMRC are expected to have the refinancing window of up to 20 years.
She said 92 percent of applicants are in stable employed positions, whilst only 8 percent were self-employed.
She explained that they will sift the applications, then analyse and pre-qualify all applicants culminating in the amounts each lender is willing to advance to the applicant. This lets the applicant know value of property he/she can afford.
The minister also disclosed that members of NMRC have promised to complete this exercise within 6 – 8 weeks from receipt of the list, saying that once qualified or notified, each applicant can then begin to look for a home that is within their borrowing range.
She disclosed that 63 percent of applicants were male with 37 percent female. Almost 60 percent of applicants were in the 31-40 years age bracket, 15 percent in the 21-30 years bracket – that is a healthy 75 percent of young people willing to buy homes and can easily have tenors of up to 20 years for their mortgages.