FMBN Seeks Stronger Partnership with States on Affordable Housing

January 28, 2020

In a bid to deepen the impact of its affordable housing delivery programs to a greater number of Nigerian workers within the low and medium-income bracket nationwide, the Federal Mortgage Bank of Nigeria (FMBN) has solicited for a more robust collaboration with state governments.

This includes stronger support and participation of states in the National Housing Fund (NHF) Scheme, provision of unencumbered land for the execution of strategic FMBN affordable collaborative housing schemes as well as support for the elimination of high costs and systemic bottlenecks to title perfection and governors’ consent to mortgage transactions at the state level amongst others.

A statement signed by the Group Head, Corporate Communications, FMBN, Ahmed Abubakar, quoted the Managing Director/Chief Executive Officer, FMBN, Arc. Ahmed Dangiwa, to have made the case for improved affordable housing partnership with state governors during his briefing to the Nigerian Governors Forum (NGF) on the activities, programs of the bank in Abuja recently.

Dangiwa stated that FMBN was 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.

He said these include the NHF housing loan of up to N15 million payable over a 30-year period at best market interest rate of six per cent per annum; and NHF individual construction loan at nine per cent interest rate per annum with a 15-year tenor.

Other convenient housing loan products include rent-to-own scheme which allows beneficiaries to move into FMBN owned houses and payback in monthly instalments over a 15-year period at single-digit interest rates with no equity requirement and the home renovation loans where up to N1M is given to NHF contributors who already own their homes to carry out necessary improvements and payback over five years.

“Additional unique FMBN partnership advantages include the provision for zero equity contributions for housing loans below N5 million and a maximum of 10 per cent for loans from N5 million to N15 million,” he added.

The FMBN boss also said the partnership would enable state governments to better take advantage of its strategic financing windows for real estate construction and decades-old institutional experience in social housing provisioning.

Some of the affordable real estate financing windows Dangiwa listed included Estate Development Loans and the Cooperative Housing Development Loans both available at rates of 10 per cent interest rates and the Off-taker Guarantee Scheme at 0.5 per cent per annum.

The FMBN MD/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, they have recorded major milestones with the notable ones being: increased public sensitisation that has led to a spike in registered contributors to the National Housing Fund (NHF) Scheme to 5,026,777; increased NHF collections totalling N134 billion to bring the cumulative collections on NHF since inception 26 years ago to N366 billion. The three-year performance represents 36 per cent of total collections in the 26-year life span of the scheme, he said.

In addition, he listed others to include increased NHF refunds to retired contributors to the scheme totalling N21 billion within three years to bring the cumulative since inception to N32 billion, representing a 66 per cent increase in refunds within three-years.

Others are increased number of housing units by 7,740, increased number of mortgage loans provisioned to 3,749, and home renovations for 39,458 beneficiaries.

The MD further solicited that state governments reduce title perfection fees, which currently range from five per cent to 10 per cent, to the flat rate of 0.5 per cent for mortgage affordability and expeditious treatment of consent to mortgage transactions by governors to improve turnaround time.

In his response, the Chairman of the Nigerian Governors Forum (NGF) and Executive Governor of Ekiti State, Kayode Fayemi thanked the FMBN MD for his presentation. He noted that Dangiwa made a convincing case for the collaboration, adding that the governors were keen to engage further with FMBN as a strategic affordable housing partner.

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