By Akanimo Sampson
The Rent-To-Own Housing Scheme of the Federal Mortgage Bank of Nigeria (FMBN), Nigeria’s apex mortgage institution that manages the National Housing Fund (NHF) scheme for the Federal Government, is eliminating the burden of equity contributions by workers for housing loans. It is also complementing the existing products of the bank by widening the home ownership bracket, increasing housing stock, and helping the bank to utilise abandoned estates that are being transferred to the scheme.
FMBN’s Board approved the Rent-To-Own Housing Scheme in a strategic bid to make homeownership more accessible and affordable for Nigerian workers. It is an innovative affordable housing product, which provides an easy and convenient payment plan towards homeownership for workers.
The scheme allows workers to move into FMBN homes as tenants, pay for and own the properties through monthly or yearly rent payments spread over periods of up to 30- years. To further increase affordability, the properties will also attract a single digit interest rate of 9% on the price of the property on an annuity basis. The product will cover properties with the maximum value of N15million.
It targets Nigerian workers who are contributors to NHF and implemented in phases. The pilot phase started with about 3,000 houses. To deliver, FMBN is partnering with reputable estate developers for the construction of quality, cost-effective housing stock nationwide. Payments for the houses are domiciled with the Central Bank of Nigeria (CBN) through the Treasury Single Account (TSA).
Properties for the scheme are existing estates that are funded by FMBN nationwide and non-funded estates.
FMBN’s Managing Director/Chief Executive Officer, Ahmed Dangiwa, an architech, says the rent-to-own is yet another groundbreaking initiative of the bank that is targeted at increasing access to affordable housing by Nigerian workers who fall into the low- medium income brackets.
“The rent-to-own housing product is designed to make sure that any worker who collects a salary should be able to live in his own home and pay conveniently over periods as long as 30-years! This is a massive relief especially given how little workers earn. I am delighted that we have successfully added this product to the many other initiatives that we have made possible to make homeownership a lot easier for Nigerian workers”, he said.
Apart from the workers housing scheme, FMBN is battling to deliver 5,000 housing units from its Mini-City Housing Development Programme under the National Economic Sustainability Plan of the government.
According to Dangiwa, the 5,000-housing unit is in addition to the delivery of 2,500 units under the labour projects. The Bank has already delivered 1,400 units under the Nigerian Workers Affordable Housing Development Programme, pointing out that the bank is equally supporting other products like the FMBN Home Renovation Loans, NHF Individual Construction Loans, Cooperative Housing Development Loans and others.
Unarguably, a lot is changing for good at FMBN under Dangiwa, and its competent Board chaired by Dr. Adewale Adeeyo. Between April 2017 and January 2020, the bank made historic loan disbursements totaling N88.6 billion, averaging N29.5 billion per year. Some of the notable disbursements include home renovation loans worth N32.7 billion, NHF loans totaling N29.3 billion, estate development loans in the sum of N17.2 billion, cooperative housing development loans totaling N6.2 billion and N3.1billion financing of the Ministerial Pilot Housing Scheme (MPHS).
From easing accessibility and affordability of homeownership – through the review of equity requirement for NHF loans from 10 per cent to zero per cent for loans of up to N5 million; 20 per cent to 10 per cent for loans from N5 million to N10 million and 30 per cent to 10 per cent for loans of N10 to N15 million – to development of innovative home products such as individual construction loans of up to N15 million and the rent to own scheme that enables immediate access to houses under a rental arrangement, it has been a refreshing potpourri of commendable strides at the bank over these past three years. More than ever before, FMBN is playing the role of facilitating increased access to affordable housing as was conceived in the Act that established the bank decades ago.
There is the 154-housing unit Woodhill Estate in Kuje, Abuja, which FMBN financed under its Cooperative Housing Development Loan window for members of the Akacare Multipurpose Cooperative Society. The estate comprises 2-bedroom semi-detached and 3-bedroom detached bungalows at the selling price of N7.5 million and 3-bedroom detached bungalows at the selling price of N9.5 million respectively.
FMBN is playing a strong role as the provider of affordable housing estate construction finance to the Cooperatives through reputable developers under the bank’s Cooperative Housing Development Loan Portfolio. Members of the Cooperatives are expected to join the NHF Scheme and make monthly contributions of 2.5 per cent of their salaries. Upon completion of the housing estates, FMBN packages NHF Mortgage Loans of up to N15million to the members of the cooperatives at nine per cent interest rate per annum with tenors of up to 30 years depending on the age of the contributors through one of its primary mortgage institutions.
Three days after the commissioning of the Woodhill estate in Abuja, Works and Housing Minister, Babatunde Fashola, commissioned a 150-housing unit FMBN/Gombe State Investment & Property Development Company Housing Estate in Gombe. The estate comprises 82 units of 2-bedroom detached bungalows at N6.5 million and 68 units of 3-bedroom detached bungalows at N7.3 million.
The completion of the estate, the latest in the series of many others the bank has recorded over the past three years under the dynamic leadership of Dangiwa, is significant on many counts. It provides practical evidence FMBN is working and Nigerians are benefitting from its affordable portfolio of housing products. Consider the 154housing unit Woodhill Estate in Abuja for instance.
FMBN approved N997.9billion for its construction – inclusive of infrastructure and 1.2kilomer access road – under its Cooperative Housing Development Loan (CHDL) window. FMBN CHDL is a legacy FMBN housing construction loan for cooperative societies that have secured land to build houses for their members. Qualified Cooperative societies can access up to N500M using reputable developers. The loan is payable over a 24month period at 10 per cent interest rate.
There is a shift in the old narrative of uncompleted/abandoned housing projects nationwide. The past three years have witnessed a commendable timeliness in the completion of housing projects. FMBN management has disbursed unprecedented levels of funds towards the completion of old and abandoned projects nationwide. They have also commendably ensured that new housing projects are adequately funded to enable developers meet delivery timelines.
The National Affordable Housing Scheme for Workers is however, a collaborative housing programme in partnership with the Nigeria Labor Congress (NLC), Trade Union Congress (TUC) and the Nigeria Employers Consultative Association (NECA), to deliver affordable houses for workers.
As at last year, 52 housing projects comprising 4,624 housing units were scheduled for completion. Encouraged by the aggressive approach of FMBN to deliver affordable houses to the citizenry, Governor Udom Emmanuel of Akwa Ibom State has pledged to work with the management of the bank, to ensure that low and medium-income workers in the state own houses at retirement.
Represented by the Secretary to the State Government, Dr. Emmanuel Ekuwem, Udom spoke when the board and management of the bank paid him a courtesy call in Uyo, the state capital, noting that, the era where some workers in the state within the low-medium income retired without a home is over.
While he assured the bank and workers in the state that his administration was determined to partner with FMBN to construct affordable housing units for low -income workers in the three senatorial districts of the state, the governor reiterated his promise to workers during his campaigns, that he would explore every opportunity aimed at enhancing the welfare and the socio-economic life of the citizenry. He added that his contribution to the scheme is geared towards enabling Akwa Ibom workers to access a loan with ease to acquire affordable houses.
He commended the management of the bank for leaving above partisanship by spreading development across the country and called on the bank to put machinery in place for speedy access to loans by both Akwa Ibom and Nigerian workers.
“The governor and all of us in his administration are interested in transforming the industrial landscape of Akwa Ibom State. We are interested in making a difference in the lives of Akwa Ibom people and housing is part of that. We want to make sure that, people lives in affordable and comfortable houses”, he said.
Earlier, Dangiwa, solicited the cooperation of the governor towards the signing of the Mortgage Foreclosure Act into law to assist Akwa Ibom people in the procurement of the Certificate of Occupancy that would enable them access N15 million NHF loan to build their personal houses. “We are collaborating closely with the Head of Service of the state and the leadership of NLC and TUC in the state to deliver these houses after completion to workers”.
The problem of non-affordable housing became a big issue in the country when government stopped direct involvement in housing delivery, like the large scale developments: Shagari low cost housing at the federal level and the Jakande low cost housing in Lagos State.
There is no gainsaying the fact with Dangiwa, FMBN is assiduously increasing the country’s housing stock by eliminating the burden of equity contributions by workers for housing loans, complementing the existing products of the bank by widening the home ownership bracket, and helping to utilise abandoned estates that are being transferred.
