By Akanimo Sampson
Going by its current momentum, Family Homes Funds appears to be emerging very fast as a social housing tiger for low and medium income earners in Nigeria.
On its driving seat as Managing Director/CEO is Femi Adewole, a housing finance professional and chartered architect with over 25 years experience leading housing initiatives across sub-Saharan Africa and the United Kingdom.
Before landing at Family Homes Funds, he was the MD of Shelter Afrique, and also served in some of the largest housing companies around the globe such as First World Communities Ltd, Watford Community Housing Trust, Notting Hill Housing Group, and Lagos HABITAT 2011 Project.
Adewole is an alumnus of the Harvard Kennedy School and Warwick Business School. With him, it is as if Family Homes is wired by the guiding principles of Habitat for Humanity. This global nonprofit housing organisation is striving to reach billions of families.
Habitat strongly believes that market-based approaches can achieve large-scale impact because of the ability to self-replicate successful business models. The ambition to achieve large-scale change does not mean interventions themselves have to be large in terms of resources. Small test projects to determine if a product can be sustained are perfectly valid.
For Habitat, lasting solutions come from strengthening the abilities of every company and market actor we work with, ensuring the solution is aligned with market incentives. In other words, the business delivering the product is able to recover its costs and generate some profit on top, and the product is affordable.
‘’We take a positive attitude toward the role of the private sector in affordable housing, recognizing that the cement companies, contractors, equipment suppliers, banks and other actors play an important role, and that profits can drive the incentive to expand services’’, the group says.
Adding, it says, ‘’we favour the use of indirect subsidies that promote lasting solutions that will continue to benefit households after our intervention. Direct subsidies that cannot be depended upon or that the market might orient itself around are avoided because of the danger of distorting the housing market.
‘’Our role is to be catalytic, stimulating changes in a market system without becoming part of it. Our team provides advisory services and technical assistance to market actors and companies to support their abilities to help low-income households obtain affordable housing, while remaining external to the housing market.’’
At the conception of Family Homes Funds, however, sceptics were uncertain about the Federal Government plan to build at least 500, 000 homes and create up to 1.5 million jobs. The scepticism was based on flurry of failed attempts in Nigeria to address the country’s embarrassing housing deficit.
Surprisingly, it has been barely a year since Family Homes hit the ground running. So far, it has developed at least 4050 homes at different stages of completion. They have been able to create about 1400 jobs through these projects. Over 500 units have been completed in Nasarawa state, 750 in Kano, 650 in Delta and many more all over the country.
Given Nigeria’s housing deficit, these figures might appear like a drop in the ocean. But, if previous projects were consistent and result-oriented, the deficit which many say stands at least 17 – 20 million today would not have been.
With a population of 230 million people, Nigeria is unarguably, the most populous country in Africa, and the 7th in the world. In spite of this huge population, the country has been struggling for decades to come up with a sustainable action plan that will reduce its housing gap.
Governments in many countries take the responsibility for the provision of housing through a mortgage financing system that simplifies home ownership for employed citizens, and a social security system for the unemployed. And this is why China with a population of 1.3 billion people has a housing surplus yet Nigeria with a population of about 200 million has a housing deficit.
It is against this backdrop that the current administration under the leadership President Muhammadu Buhari and the Ministry of Works, Power and Housing, introduced new policy measures and initiatives to address the housing challenges in the country.
The Family Homes Fund Limited is one of such new initiatives. The Fund is a partnership between the Federal Ministry of Finance and the Nigerian Sovereign Investment Authority as founding shareholders.
The Fund is the largest affordable housing-focused fund in Sub-Sahara Africa, leveraging its significant capital (in excess of N500 billion by 2023) to facilitate access to affordable housing for millions of Nigerians on low to medium income groups.
Through strategic partnerships with various players in the sector and some of the world’s main Development Finance Institutions, the Fund has an ambitious commitment to facilitate and supply 500,000 homes and 1.5million jobs for the low income earners by 2023.
Through its Rental Housing and Help-to-Buy Schemes, beneficiaries of the project enjoy a deferred loan for up to 40% of the cost of their home.
For the first five years of the loan, no payments need to be made. From the 6th year, monthly payments will be made to start repaying both interest and capital to assist the purchaser. The amount paid starts low and increases each year in gradual steps (average 6.5% per annum) in order for the Help-To-Buy loan to be fully repaid by the 20th year, the same year the mortgage is expected to be fully repaid.
To qualify, households will have earnings between N600,000 to N1.2million per annum and the Fund ensures that one bedroom unit should not be more than N3.00 million; two bedroom unit should not be more than N4.5 million, and 3 bedroom should not be more than N6.5 million.
An exception is made in Abuja, Lagos, Port Harcourt and Kano where the cost of a new home can be as high as N9.00 million. Households benefiting from Loan Assistance will not be owners of a suitable home and will include one income earner who is under 35 years of age and does not have to be one of the people applying for the scheme or the loan but must be available to help with repayments.
The Fund is in strategic partnership with housing stakeholders like the NMRC, with which it is currently working on affordable mortgages specifically through the Help-to-Own product where low income earners can enjoy the most affordable and flexible mortgage system in the country.
Family Homes Funds is most likely the only agency today in the country that is providing financing for affordable housing outside of the commercial banks where the interest rates, requirements, affordability and development costs are usually high. The fact that they are able to provide financing at no more than 10 percent per annum which is about one third of the market rate is a significant and novel intervention.
Most states that are in partnership with the Fund are now keying into the program to provide housing for their staff through the fund. In Borno state, the Fund is providing about 4700 homes, with 3000 of those being very low cost homes for Internally Displaced Persons (IDPs).
Having signed a Memorandum of Understanding (MoU) with Construction Skills Training and Empowerment Project Ltd/Gte C-STEMP, an organization with a vision to build a pool and database of certified artisans with the requisite skills to meet industry needs that translate to better quality of work and life for all stakeholders – Family Homes Funds has shown commitment to incorporate training, assessment and certification as a condition for beneficiaries to access its programmes and to ensure that only skilled labour are utilized on its projects.
Its laudable partnership with C-STEMP is to provide affordable and quality homes while creating jobs for highly qualified persons.
What makes Family Homes Funds stand out? The motivation behind the establishment of Family Homes Funds is based on the fact that it is not just enough to supply houses without taking care of the demand side. The Fund dedicates sufficient strategy to ensuring that the supply of houses meets the demand for it.
As calls for sustainable building rings loud in the air, Family Homes Funds already leads the way through its collaboration with other agencies in the development and application of building innovations that can be cost effective.
Family Homes Funds is working with bodies like MBRI to commercialise innovative building systems that rely very little on concrete and cement, which is a significant step in not only advancing local content, but ensuring sustainability.
As a testament to their hard-work, Family Homes Funds won the Affordable Housing Promoter of the Year Award at the 2019 Nigeria Housing Awards. The prestigious award is in recognition of ongoing affordable housing projects being financed by the fund for low and middle income earners across the country.
While the excellent progress of Family Homes Funds excites stakeholders, there is the need for government to ensure that the kind of bureaucracy and political interference that have prevented previous and ongoing housing initiatives in the country from achieving their set aims do not affect Family Homes Funds.
Its independence and all-round support from the government ought to be uninterrupted if set goals are to be reached in the allotted timeframe of delivering the 500, 000 homes.
