No down payment for people seeking mortgages for up to N5m — Fashola

Babatunde Raji Fashola, the Minister of Works and Housing, has said that there would be no need to provide a down payment for people seeking mortgages for up to N5 million from the Federal Mortgage Bank.

Fashola reinstated this fact during his interview on Thursday on Arise Television, when he said the Federal Mortgage Bank (FMB) under the President Muhammadu Buhari administration has reduced the threshold conditionality for eligibility for people seeking mortgages for up to N5 million by removing the down payment requirement.

“In terms of access to finance, the Federal Mortgage Bank under this administration has reduced the threshold conditionality for eligibility for people seeking mortgages for up to N5 million by removing the down payment requirement—the equity contribution of 10 percent—to zero. So you don’t have to need an equity contribution to access that kind of loan,” Fashola said.

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He also added that for those seeking N5 million and above from the FMB, the conditionality threshold, which used to be 15 percent, has been reduced to 10 percent. All these are to encourage Nigerians to access funding to build houses and reduce the housing deficit in the country.

The minister also added that a rental scheme has been built into all the housing estates that are managed by the federal government.

“For those seeking to go N5 million and above, we have lowered it from 15 percent to 10 percent. We have also built in a rental scheme into all the housing estates we have built,” he said.

He added that as part of the Buhari administration’s drive to address the housing shortage in the country, the FMB has delivered over 6,000 houses to date, while the Federal Housing Authority has about 7,000 houses across the nation.

“As I speak, the Federal Mortgage Bank has delivered over 6,000 houses, the FHA about 7,000, and the national housing programme that I spoke about across 35 states has delivered 5,000 to 6,000 units, but that is not the Nigerian picture; it is a Federal Government picture so far under this administration, and then you have to look at the private sector and the states,” he explained.

Meanwhile, the minister faulted the figure presented in the public space, quoting the national housing deficit as being around 28 million people without a house. He recalled that at the time he was appointed Minister of Works and Housing in 2015, the housing deficit was around 17 million, a figure that the National Bureau of Statistics (NBS), the World Bank, and the African Development Bank had refuted at the time.

A deeper investigation revealed that the figure, which ended up being false, speculative, and fabricated from time to time, only ended up misguiding most Nigerians, especially policymakers and those involved in closing the housing deficit in the country.

He said, “Let me start first with the figure of 28 million people that you quote and attribute to the NBS, and I would be surprised if the NBS claimed that figure because when I took office I was saddled with a publicly touted 17 million housing deficit, and I said to myself that I think it is important before you embark on this journey to understand how those figures were arrived at because if the nation have 17 million housing deficit—it supposes that you have to build 17 million houses and that is the cure to a proper diagnosis.

“Nobody could provide an answer on how that figure was arrived at. But I was determined. They first told me that it was the World Bank; the World Bank denied it; they then told me it was the African Development Bank; the African Development Bank disclaimed it. I asked the NBS—Dr. Kale said no, it wasn’t their figure. He even had doubts about the authenticity of the figure. I finally found the figure; it was from a housing policy from this ministry in 2012, three years before my appointment.

“It was in the forward of the minister; when I called her, she said she just didn’t pay attention; she was under pressure when she signed. So that figure has no basis; it has evolved from 17 million to 28 million. I saw that on your programme yesterday morning, and I think we should disown this figure as a responsible nation; it has no authenticity. Is there a deficit now? There are.”

He said that to address the problem of false data, the National Population Commission (NPC) has been advised to assist with providing accurate data on the housing deficit in the next national census exercise.

“And my argument is that the deficit is more prevalent in the urban centres, and I have challenged the national population commission to help us collect the data in this next census exercise.

“But the rental side, which is where there is more damage, is not being addressed, and the federal government has no responsibility there. The FG has fiscal responsibility for the cost of foreign exchange and all of those things because they impact the cost of supply. So this is my response.”