Why FMBN seeks state govts’ collaboration on affordable housing
For reasons bordering on stronger support and participation of states in the National Housing Fund (NHF) Scheme, provision of unencumbered land, the Federal Mortgage Bank of Nigeria (FMBN) is seeking collaboration with state governments.
This, the authorities of the apex mortgage bank explain, is to enable them to deepen the impact of the bank’s affordable housing delivery programmes to a greater number of Nigerian workers within the low and medium-income bracket nationwide.
The collaboration also seeks support from the states for the elimination of high costs and systemic bottlenecks in title perfection and governor’s consent to mortgage transactions at the state level amongst others.
Ahmed Dangiwa, MD/CEO of FMBN, made this plea when he briefed the Nigerian Governors Forum (NGF) on the activities, programmes of the bank in Abuja.
“FMBN is strategically positioned to energise state governments’ efforts to deliver affordable housing to their citizens in a sustainable and cost-effective manner on the back of its wide portfolio of affordable housing products.
“This includes the NHF housing loan of up to N15million payable over a 30-year period at best market interest rate of 6 percent per annum; and NHF individual construction loan at 9 percent interest rate per annum with a 15-year tenor,” Dangiwa assured.
The bank has, in the past three years, under the leadership of Dangiwa, sustained a trajectory of impressive performance, notching several milestones in a renewed drive to turnaround the country’s foremost mortgage institution and position it on the path of efficiency and greater impact.
Some of the bank’s footprints include the launch of the FMBN Digital Mobile Platforms which now provide real-time access to information by contributors to the National Housing Fund (NHF) and the massive downward reduction of equity for accessing NHF loans from 10 to zero percent for N5 million and below and 10 percent for loans of between N5 million and N15 million.
Others are the introduction of the individual NHF construction loan product, under which contributors to the NHF can access up to N15million and pay back over a 15-year period at single digit interest rate of 7 percent and the collaboration with labour unions to deliver decent, affordable and quality housing to Nigerian workers under the National Affordable Housing Delivery Programme (NAHDEP).
FMBN has many housing loan products, including rent-to-own scheme which allows beneficiaries to move into FMBN-owned houses and payback in monthly installments over a 15-year period at single-digit interest rates with no equity requirement and the home renovation loans where up to N1 million is given to NHF contributors who already own their homes to carry out necessary improvements and payback over five years.
Dangiwa told the governors that partnering with the bank has advantages which include zero equity contributions for housing loans below N5 million and a maximum of 10 percent for loans from N5 million to N15 million.
“This partnership will enable state governments to take advantage of its strategic financing windows for real estate construction and decades-old institutional experience in social housing provision.
Some of the affordable real estate financing windows which Dangiwa listed are Estate Development Loans and the Cooperative Housing Development Loans both available at best market rates of 10 percent interest rates and the Off-taker Guarantee Scheme at 0.5 percent interest rate per annum.
The CEO, in soliciting the support and partnership of the state governors, informed them that the current executive management has set the FMBN on a new path of reform, innovation, accountability, efficiency and high performance.
He noted that within the last three years of the current management – April 2017 to date – they had recorded major milestones with the notable ones including increased public sensitisation that has led to a spike in registered contributors to the NHF Scheme to 5,026,777; increased NHF collections totaling N134bn to bring the cumulative collections on NHF since inception 26 years ago to N366bn. The three-year performance represents 36 percent of total collections in the 26-year life span of the scheme.
Other milestones include increased NHF refunds to retired contributors to the scheme totaling N21 billion within three years to bring the cumulative since inception to N32 billion, representing a-66 percent increase in refunds within three-years.
There are also other milestones such as increased number of housing units by 7,740; increased number of mortgage loans to 3,749, and home renovation loans for 39,458 beneficiaries.
Dangiwa solicited that state governments should reduce title perfection fees from the current 5-10 percent to a flat rate of 0.5 percent for mortgage affordability and expeditious treatment of consent to mortgage transactions by governors to improve turnaround time.
Kayode Fayemi, chairman of NGF and governor of Ekiti State, thanked Dangiwa for his insightful presentation, noting that he had made a convincing case for the collaboration. He said that the governors were keen to engage further with FMBN as a strategic affordable housing partner.