Time to build, buy houses as NHF loan facility jumps 70%

For some Nigerians, especially those that are of the working class, time has come for them to build or buy their own homes as the federal mortgage bank of Nigeria (FMBN) has raised the loan limit of the National Housing Fund (NHF) by 70 percent to N50 million, up from N15 million.

But this is only for contributors to the NHF, a mortgage scheme that demands not more than 33 percent contribution of their monthly income to the fund, thereby qualifying them for housing loan facility at 6 percent interest rate.

The action, which has been commended by many industry stakeholders, is part of the apex mortgage bank’s efforts to meet the financial needs of higher and medium income earners as well as address the challenges of rising construction cost.

Shehu Osidi, managing director of the bank, who disclosed this in Abuja recently, called on Nigerians to take advantage of the new window and key into the nation’s housing programmes, adding that the current management of FMBN, which he leads, has achieved an operational surplus of N4.9billion in the first half of the year through their deliberate strategy and financial re-engineering.

The managing director called for a review of the NHF Act, disclosing that the major challenges of the Bank were the shortage of funding and high volume of non-performing loans (NPLs).

He, however, revealed that the Bank has set up loan recovery task teams that were aggressively improving the Bank’s loan portfolio as well as reducing NPLs.

The managing director added that estate development loans has sadly, over the years, been the highest in terms of non-performing loans and revealed that, over 12 years ago, there was a ministerial embargo placed on that category of loans to reduce the NPLs portfolio.

In a related development, the Mortgage Banking Association of Nigeria (MBAN), an umbrella body for mortgage banking institutions in Nigeria, is seeking partnership with the federal government for effective implementation of the newly approved N250 billion Mortgage and Real Estate Investment Fund (MREIF).

Ebilate Mac-Yoroki, the associations president, and its Executive Secretary, Adedeji Ajadi, who expressed this interest in Abuja at the weekend, explained that MBAN said its members in mortgage banks and brokerage firms were ready to ensure that the benefits reached the targeted Nigerians.

MREIF is an initiative designed to provide sustainable financing for affordable housing, with a focus on low-cost mortgages. It blends private sector investments from pension funds and insurance companies with government-provided low-cost seed funding.

Housing sector stakeholders have described it as an innovative financing model that will provide mortgages at interest rates hovering around single digits, with repayment tenors of up to 20 years.

“This development underscores the importance of public-private collaboration in addressing critical national challenges such as affordable housing. MBAN remains committed to working closely with the federal government and other stakeholders to achieve sustainable housing solutions for Nigerians,” Mac-Yoroki said, describing it as a transformative step towards making affordable housing a reality for low- and middle-income earners.