The Kaduna State Government and Sterling Bank have agreed to jointly fund a N5 billion mortgage scheme to allow more persons own homes in the state.
The fund will provide mortgages at single-digit interest rate.
Representatives of the Kaduna State Government and Sterling Bank announced the new mortgage initiative at a press briefing in Kaduna on Wednesday.
Umma Aboki, the Special Adviser on Economic Matters to the governor of Kaduna State, Nasir El-Rufai, who represented the state government at the occasion said that the state is facilitating investments in the provision of mass housing.
“To encourage more people to own homes, we also have to support the demand side through mortgage financing. I am happy to announce that Kaduna State is partnering with Sterling Bank to deliver an affordable, single-digit interest mortgage facility.”
Mr Aboki added that successful bidders in the sale of government houses programme can apply for the mortgage facility to help pay for the houses.
Commenting on the project, the Group Head of Non-Interest Banking of Sterling Bank, Garba Mohammed said that the bank has executed a Memorandum of Understanding with Kaduna State to provide the mortgages at 9.5 per cent per annum. He explained that the two parties will each contribute 50 per cent of the mortgage fund which is billed to reach N5 billion for onward lending to aspiring home owners.
Mr Mohammed disclosed that the single-digit interest rate on the mortgage product is achieved by Kaduna State sacrificing the interest on its own part of the deposit.
He said that 50 per cent of the mortgages will be used to support house purchases below N20 million, while home purchases valued up to N30 million will get 30 per cent of the funding. The balance of 20 per cent will support home purchases above N30 million up to a limit of N60 million.
The mortgages will require beneficiaries to make security deposits of between 15 to 30 per cent of the value of the houses they intend to purchase, but all mortgages must be liquidated within 10 years.