FG APPROVES ZERO PERCENT EQUITY FOR HOUSING LOANS BELOW N5M
Nigerians who wish to buy houses below N5 million using mortgage loans from the Federal Mortgage Bank of Nigeria (FMBN) will no longer have to come up with any equity deposits to the FMBN, the federal government on Thursday disclosed.
It also said that for housing loans costing between N6 and N15 million, it has approved for the FMBN to allow Nigerians deposit only 10 per cent equity to it to be able to access the loan.
The Minister of Power, Works and Housing, Mr. Babatunde Fashola, disclosed this at the seventh edition of the National Housing Council on Lands, Housing and Urban Development which held in Gombe.
Fashola’s speech which he delivered at the meeting was sent to THISDAY in Abuja by his senior special assistant on communications, Mr. Hakeem Bello.
In it, Fashola said the FMBN has been mandated to take zero percent equity for loans not exceeding N5 million, adding that the government also reduced equity contributions to housing loans up to N6 and 15 million from 20 to 10 per cent.
Additionally, he noted that the government planned to re-capitalise and open the National Housing Fund (NHF) to workers that are not within its payroll, that is private sector employees, adding that between May 2015 and July 10, 2018, the FMBN has issued 3,862 mortgages to Nigerians to acquire their own homes.
“It seems to me that whether it is to buy or to rent, affordability will always be an issue. But we must start by making clear to our people that not everyone can afford to buy or own a house, but it is ideal to at least seek to shelter everybody who has a job, by rental which is affordable.
“The question therefore is that after we have provided work for these vulnerable people, which pays them weekly or monthly in arrears, is it affordable for them when they seek to rent houses, and we ask them to pay one or two years rent in advance,” said Fashola.
“As for those who wish to buy houses, mortgages are the solution and we must issue more. The Federal Mortgage Bank is mandated to do so, not only by re-capitalisation but also by granting the following exemptions: 0% equity for loans not exceeding N5 million. Reduction of equity from 20% to 10% for loans up to N6 to 15 million.
“This is in addition to a planned re-capitalisation and the opening of the National Housing Fund (NHF) to non-government
The minister subsequently asked that landlords in the country be made to collect rentals on their houses in arrears as against forward payments.
According to him: “This is not government, this is us, the landlords, and we can change this by accepting monthly rent in arrears secured with their employer’s guarantee.
“If this happens, we will see how housing will catalyse our economy. When my rent is matched to my income, you and I will be witnesses to a release and relief of millions of people who seek help to pay their rent even though they have a job.”
He disclosed that his ministry was working with that of the petroleum ministry to develop standards that will enable gas lines to be connected to Nigerian homes with domestic gas supplies for cooking and heating.
“The oil and gas sector can also benefit enormously from housing if we all commit to implementing the gas master plan. At the moment we are under utilising our gas resources especially in the area of domestic use for cooking and heating.
“In order to take the benefit of this gift of nature, our ministry is working with the ministry of petroleum resources to develop standards for pipes and installations that will facilitate domestic use of gas for cooking and heating,” Fashola explained.
Earlier and about two months back, the MINISTER had said that the present administration in the country will not abandon projects already started by the immediate past government of President Goodluck Jonathan, saying that change needs not be dysfunctional.
Speaking at the commissioning of 100 units of ministerial pilot housing scheme for lecturers of LAUTECH, Ogbomoso, financed by the Federal Mortgage Bank of Nigeria (FMBN), off Ogbomoso-Ilorin expressway at the weekend, Mr Fashola said that purpose of political power was to improve human dignity.
“I want to acknowledge that this housing estate project was started during the last administration in 2014. It’s important to do so. But I know that traditionally when administrations change, especially when political ideologies also change, people are apprehensive of what happened to uncompleted projects. People may have been worried what would happen to this estate. Gladly today, President Buhari has said that change does not have to be dysfunctional. And that there’s no politics about housing. It’s human dignity that’s most important. That’s purpose of political power.
“So, for those who ask what change means. It means change does not have to be dysfunctional and it’s all about service to people. Hundreds of families would live in this neighbourhood, and that’s change.
“Another thing that has changed is this. We have heard stories of money being hidden in all sorts of funny places. And this happened at a time of great prosperity, when the country was making lots of money. Many more of this would have been completed. Buhari administration is saying that instead of hiding your money inside garages, we would make your money work for you. And that’s change. Leadership and management in FMBN have also changed. And the evidence in many housing estates in different parts of the country bears that out. For the first time in 20 years, FMBN is returning a surplus of N2.7 billion in 2016”, he said.
The ministers, who commended the developer and the almost 1,000 artisans who built the estate, said that they had helped to build their country
He also said that more housing provision would be enabled when Nigerians that were already allocated houses pay up on their allocation, adding that it was a partnership that could make more housing possible.
Also speaking, the acting managing director of the FMBN, Mr. Richard Esin, said that the construction loan of N561.2 million was advanced by the bank to the developer to deliver the 100 housing units.
Esin, who said that the housing units comprised of 48 units of 3-bedroom semi detached bungalows, 40 units of 2-bedroon semi detached bungalows, added that it included 12 units of 1-bedroom terrace bungalows.
He said that Nigerian workers, on the basis of their contribution to the National Housing Fund (NHF) scheme became eligible for mortgage loans at a concessionary interest rate of 6 per cent per annum and repayable over a maximum period of 30 years.
He said that the FMBN had invested a total sum of N2.303 billion to finance construction of 624 housing units in Oyo state, adding that the bank had also funded 527 housing project units through different developers in Ibadan.