• Friday, December 01, 2023
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Providing roadmap for housing finance in coronavirus era


At a time when the entire world is contending with health challenge with terrible economic impact on individuals, households and organisations, very little consideration is given to housing, especially housing finance and/or mortgage.

With the lockdown and restriction of movement, economic activities, including construction, were put on hold, leading to a significant contraction and loss of income.

Only recently, the minister of finance, budget and economic planning, Zainab Ahmed, expressed fear of Nigeria relapsing into recession, once again. That, from the nation’s micro and macro-economic outlook, especially rising inflation, seems inevitable.

It was against this backdrop that leading housing financing institutions in the country, who spoke at an online conference hosted by Housing Development Advocacy Network (HDAN) in Abuja, were agreed on providing a clear roadmap for housing finance in the country during and post-Covid-19 era.

These institutions were Federal Mortgage Bank of Nigeria (FMBN); Family Home Funds (FHF); Nigeria Mortgage Refinance Company (NMRC);  and Central Bank of Nigeria (CBN), and Mortgage Bankers Association of Nigeria (MBAN) which is an umbrella association of mortgage banks in the country.

These institutions, which were represented by their chief executives and president respectively, were of the view that rejuvenating housing construction activities would help in creating jobs, generating income, opening up businesses, and promoting economic growth and development.

“The CBN is working on mortgage interest  drawback programme to reduce interest rate to single digit for mortgages not exceeding N5million apart from other interventions,” revealed Ade Adesemoye, a Deputy Director at CBN, who also doubles  as Director at  FMBN.

The apex bank has made interventions in the Nigerian housing sector, especially the launching of the Mortgage Guarantee  programme which seeks to improve mortgage access by low income earners through a third party that serves as a guarantor to the mortgagor.

Adesemoye affirmed that CBN was committed to creating an intervention fund for three critical areas of the housing sector, including the provision of construction finance for developers that can provide evidence of profiled off-takers with ability to repay.

Others are the provision of mortgage finance to avail funding for mortgage originator;  and working with state land administration agencies to process and issue titles promptly. The bank also plans to implement friendly foreclosure laws and reduce cost of land documentation.

“Considering the whole housing sector in itself, there is a lot of developmental approaches in terms of job creation, skill development and home ownership,” the deputy director noted.

Determined to implement its mandate of producing 500,000 houses and creating 1.5 million jobs by 2023, Femi Adewole, Managing Director of FHF, said the Fund’s Rental Housing initiative was  designed to enable people on the bottom of the housing ladder to enter a home of their choice and in the location of their choice with very minimal capital commitment.

FHF has some innovative products that are also meant to ease access to homeownership. One of such products, Adewole revealed, is the Help-to-Own and installment payment plans.

To realize full potential of these products, Adewole said the Fund has been working with agencies like the Nigerian Building and Road Research Institute (NBRRI) and other major manufacturers of building materials like cement  to look at what they  could do to ensure that by 2021, at least, 35 percent of building inputs are locally manufactured.

This, he said, would not only support the economy but significantly create jobs and ensure that FHF delivers homes at significantly lower prices than it’s currently doing. “What we need now, going forward, is bold leadership which creates outcomes and bold results which in turn change lives.

“Post-Coronavirus, we need to be doing a lot of changing of lives of the most vulnerable Nigerians and that requires bold leadership,” he assured.

To deliver on housing in a complex society like Nigeria, collaborative efforts are needed which explains why FMBN is collaborating with other institutions like the NMRC and FHF on many areas of advocacy, for the adoption of Model Mortgage Foreclosure Law by states.

Ahmed Dangiwa, FMBN’s managing director, said they were willing to provide NHF mortgages for houses delivered by FHF. “We are collaborating on real estate data collection management programme,” he said.

Dangiwa disclosed that beneficiaries of the FMBN Home Renovation Loans had increased from 2,579 in 2017 to over 25,000 by 2020, adding,  “we as a bank, within the past three  years, have  increased the number of loan beneficiaries by over 300 percent  from about 20,000 we met  to over 66,600.”

On its part, MBAN has also been working with the FMBN on Rent-to-Own, and the FHF on Rent-to-Buy. The Association’s president,  Adeniyi Akinlusi, said they have also been working with other stakeholders in order to take care of  people that are vulnerable or homeless.

“If housing access is there, and access to affordable mortgages is also there, it will stimulate supply. If you have the right stimulation for the demand side, you realize that developers will develop houses that are affordable,”  Akinlusi said.

He said it was through the involvement of the association with CBN and NMRC that they linked the capital market with the mortgage sector, “which is a more sustainable source of funding for mortgaging.”