Factoring the foreseable impacts of COVID-19 crisis on real estate sector, housing finance leadership is already hatching plans to stay afloat, while calling for more collaborations among stakeholders to provide housing and mortgage finance for low income and vulnerable Nigerians. Dayo Ayeyemi reports
To be forewarned is to be forearmed, so they say. Various leadership in housing finance are not taking the issue of COVID -19 lightly after weighing the impacts on global and Nigerian economies.
As a result of the pandemic, there has been restrictions on imports, commercial activities and inter-state travels.
These restrictions and lockdowns have led to reduction in revenue accruing to government at all levels following plunge in global oil prices.
As a matter of fact, Nigeria’s real estate sector is yet to come out of economic depression of 2016.
To make the matter worse, analysts have also predicted that the industry will face severe recession as a result of the challenge posed by the pandemic.
To combat the looming impacts of coronavirus pandemic, five chief executives of mortgage finance industry in Nigeria, Federal Mortgage Bank of Nigeria (FMBN); Family Home Funds(FHF); Nigeria Mortgage Refinance Company (NMRC); Mortgage Bankers Association of Nigeria (MBAN) and Central Bank of Nigeria (CBN), have disclosed plans, while pledging to collaborate on provisions of affordable housing and mortgage finance for low-income Nigerians to enhance easy access to their homes.
In doing so, they said that housing construction activities would help in creating jobs, enhance skills and businesses among Nigerians, while promoting economic growth and development.
Speaking on: “COVID 19 and Housing Finance Leadership,” CBN’s Deputy Director, who also doubles as Director of FMBN, Mr. Ade Adesemoye, said that CBN was working on mortgage interest drawback programme to reduce interest rate to single digit for mortgages not exceeding N5million apart from other interventions.
According to him, CBN is committed to creating an intervention fund for three critical areas of the housing sector .
These, Adesemoye said included the provision of construction finance for developers that can provide evidence of profiled off- takers with ability to repay; provision of mortgage finance to avail funding for mortgage originator; and working with state land administration agencies to process and issue titles promptly, “and 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,” Adesemoye said.
Managing Director of FHF, Mr. Femi Adewole, reeled out what his organisation has been doing to implement its mandate of producing 500,000 houses by 2023.
The FHF boss said the organisation’s social rental housing fund was designed to enable people on the bottom parts of the housing ladder to enter a home of their choice in the location of their choice with very minimal capital commitment.
Some of the innovations in place, he said, included rent-to-buy, help-to-own and instalment payment plans.
Adewole disclosed that FHF had 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 per cent of building inputs are locally manufactured.
This, he said, would not only support the economy but significantly create jobs and ensure that FHF deliver homes at significantly lower prices than it’s currently doing.
Adewole said: “What we need now going forward is bold leadership. Bold leadership creates outcomes, bold outcomes create bold results, bold results 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.”
Managing Director, FMBN, Ahmed Dangiwa, said his organisation was collaborating with other institutions like the NMRC and FHF on many areas of advocacy, for adoption of Model Mortgage Foreclosure Law by states.
Besides, he said that FMBN was willing to provide NHF mortgages for houses delivered by family homes funds.
“We are collaborating on real estate data collection management programme,” he said.
Dangiwa hinted that beneficiaries for the FMBN Home Renovation Loans had increased from 2,579 in 2017 to over 25,000 by 2020.
“We as a bank within the past three years have increased the number of loan beneficiaries by over 300 per cent from about 20,000 we met to over 66,600,” Dangiwa said.
President of Housing Development Advocacy Network, Mr Festus Adebayo, said there was need for FHF and NMRC to have a desk at FMBN office for ease of collaboration, transactions and administration.
In dealing with effects of the pandemic on the housing sector, Adebayo said the webinar would be holding quarterly with CEOs to know the extent they have gone in implementing various commitments made to Nigerians.
NMRC’s Managing Director, Mr. Kehinde Ogundimu, said the next mandate of the company was to develop the primary and secondary mortgage market in Nigeria.
“There is a market but it needs to be developed, to be made more functional and more efficient,” he said.
This, he said, had commenced through collaboration with CBN, MBAN and FMBN to develop uniform underwriting standard.
He said the company had put in place Mortgage Market System and Mortgage Market Information Portal linked to by all institutions and banks being refinanced
President of MBAN, Adeniyi Akinlusi, said the association had been working with the FMBN on rent-to-own, the FHF on rent-to-buy, and also 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, it will stimulate the 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 came up to link the capital market with the mortgage sector, ‘which is a more sustainable source of funding for mortgaging.’
Last line
Collaborations among Nigeria’s housing finance leadership will go a long way to reduce impacts of coronavirus crisis on the sector.
