Towards providing mortgages at single-digit interest rate, the Kaduna State Government has launched a N5billion fund with Sterling Bank to facilitate home ownership.
Under the scheme, the parties would each contribute 50per cent of the mortgage fund, which is billed to reach N5 billion for onward lending to aspiring homeowners. The fund will require beneficiaries to make security deposits of between 15 to 30per cent of the value of the houses while all mortgages must be liquidated within 10 years.
About 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 20per cent will be used to support home purchases above N30 million up to a limit of N60 million. Successful bidders in the sale of government houses programme can apply for the mortgage facility to help pay for the houses.
This was made known through representatives of the state government and Sterling Bank at a press briefing in the States’ capital.
Speaking on behalf of the government, the Special Adviser on Economic Matters to the governor of Kaduna State; Umma Aboki, said that the state is facilitating investments in the provision of mass housing.
He said: “To encourage more people to own homes, we also have to support the demand side through mortgage financing.”
Also speaking, the Group Head of Non-Interest Banking of Sterling Bank, Garba Mohammed said the bank has executed a Memorandum of Understanding (MoU) to provide the mortgages at 9.5 per cent per annum.
Mohammed disclosed that government is sacrificing the interest on its own part of the deposit, to achieves the single-digit interest rate on the mortgage product.