CBN to release N200bn at 5% interest rate for low income housing

The Central Bank of Nigeria (CBN) on Tuesday said it would release a term loan intervention fund to the tune of N200 billion to Family Home Fund Limited (FHFL) for financing the construction of social housing units for people on low income.

Interest rate for the three years tenor fund from the day of disbursement, is put at 5% per annum (all inclusive).

This was contained in the framework for the implementation of family homes financing initiative released on Tuesday by the CBN.

Mass housing construction is among the key economic activities with potentials to create significant number of jobs rapidly. It is in the light of this that the Bank introduced the financing initiative to support the Federal Government’s Economic Sustainability programme to fast track the deployment of 300,000 homes in the 36 states of the federation and the Federal Capital Territory and to create up to up to 1.5m jobs in 5 years.

This initiative is to be implemented in collaboration with Family Homes Fund Limited as the lead developer.

The programme will aim at creating rapidly, up to 1.5 million direct construction sector jobs (at the rate of 5 jobs/home) particularly young people on low income. In addition, the programme has potential to create a further 1m jobs through its supply chain.

“Funds would be released to FHF on project basis subject to the cumulative maximum limit of N200 billion. A project is defined as cluster of homes in the same geographical location and covered with the same title documents and approvals,” the framework stated.

The CBN said it would appoint a technical advisor (TA) to, among others, appraise the requests for funding by FHFL, recommend for the release of funds and monitor the delivery of the programme and utilization of funds including quality of the portfolio.
Upon approval, the CBN shall release the approved sum to the dedicated account of the FHF. Work should begin at the site within 2 weeks of receipt of funds from CBN. FHF shall implement the housing projects subject to: use labour intensive system to maximum the use of labour from the project catchment area; exclusively use local materials (unless where it is not available). Allow the TA or any other CBN representative(s) access to the project site and information as deemed necessary for monitoring.