The Federal Mortgage Bank of Nigeria, FMBN said there are measures already in placed being employed by the Bank to ensure easier access to home ownership are available for Nigerians as a strategy for closing the housing deficit.
The Bank, however decried the glaring fact that about 79.6% cannot own a house except through low scheme initiatives of the federal Government.
Ahmed Musa Dangiwa, the Managing director of the FMBN said the bank is more determined that to achieve its targets of making affordable home ownership of the low and Medium Income (LMI) Market segment through some of its housing products.
Speaking at the 2018 edition of the BusinessDay Real Estate Roundtable and Exhibition, Dangiwa said income distribution of Nigerians makes it difficult for lower middle income and low income category of Nigerians to afford home ownership except through concessionary mortgage.
These constraints Dangiwa said has prompted the Federal Mortgage Bank of Nigeria to initiate products that captures these people, most of whom could not afford home ownership except through concessionary mortgage.
Dangiwa who also gave a breakdown on the income distribution of Nigeria’s population said only 1.7% can afford outright cash for a property valued at N2.5million.Further, he also said that only 4.9% can afford mortgages at market-determined rates to own a 2.5mion house.
He further pointed out that only 13.8 % of the lower middle income earners can afford a concessionary mortgage.
While listing some of the products the bank is currently working on through National Housing Fund (NHF), products and services, he said, “There are Ministerial Pilot Housing Scheme, Cooperative Development Loan, Estate Development Loan, Rent to own which is currently being developed, and National Mortgage Loan.”
On key partnerships the bank is embarking on, he said, “There is currently a Minister Pilot Housing Scheme in the federal Ministry of Power, Works and Housing, which consist of Public Private Partnership housing construction program to boost housing supply, in addition to 32 mass housing projected, and has delivered about 3000 housing units nationwide”
Dangiwa further listed Federal Integration staff housing Scheme of the Head of the Service of the federation, which is part of an inter-agency homeownership program for Federal Public servants in Nigeria. The Banks specific role in this project is to provide mortgage loans and support developers’ access to construction finance.
He also listed workers housing program in collaboration with the Trade Union Congress, Nigeria Employment Consultative Agency, and the Nigeria Labour Congress which is focused on delivering affordable homes to Nigerian workers.
Other partnerships consist of cooperative development loan and Housing cooperatives, which is a revamped initiative to deliver homeownership by leveraging on cross-guarantees of members and cooperate guarantee of the society to secure the facility.
Also, the Bank has announced plans to increase the share capital to N500billion, which is geared towards repositioning FMBN to effectively attract sustainable funding into the Housing/Mortgage sector from local and foreign markets.
Remarking on increasing the capital base of the Bank, Ugochukwu Chime, the President of the Real Estate Developers Association of Nigeria, REDAN told BusinessDay that the federal government must discuss further with the states to address concerns of infrastructure deficit and high cost of land ownerships in the respective states.
According to the REDAN President, “The federal Government must look at incentives to encourage home ownerships. The federal government must have a defined structure on engaging the states to ensure that issue of land is addressed holistically. If the Ministry of land administration and land titles are not brought into the picture, it would hamper federal government’s affordability plan.
Government must at all levels must ensure that infrastructure is provided to improve accessibility and affordability” he said.
He further enjoined the federal government to speed up the process of the recapitalization of the bank, to give strong support to real estate stakeholders who are willing to invest in the various value chains of the scheme.
Echezona Okonkwo, a real estate expert also suggested to the federal government to intensify efforts on incentivising the sector through providing primary infrastructure to enable developers open up key areas of interest for the sector.
