As more developers, embrace the Federal Government initiative of providing affordable housing to low-income earners through the Family Homes Funds, the question on the lips of developers is how can they access financing from Family Homes Funds.
To answer the question, the Managing Director of Family Homes Funds, Mr Femi Adewole,in a chat with Housing News,shed more light on how financing can be assessed.
He said, ‘’we are currently providing capital for developers, whether private or public, but the key requirements are these; we only finance developers, who are building homes that fall within our target cost indicators, and they are challenging, that means that more slots exist for the one bedroom houses.
In terms of transfer cost; transfer cost been the price to the occupier, of no more than N2.5 to 3million . The two-bed being 4, to N4.5million, and the three-bed being N5.5 to N6million’’.
Speaking further he said ‘’we are basically financing 100% of the construction cost, and 15% advance payment to get you started, and in some cases we are also giving you an off take guarantee to de-risk the project for you. So it’s an extremely attractive package, because the intent is to bring supply at the level of the market for mortgage origination’’.
On the documents required by Family Homes Fund, he said,
‘’at this stage we are only looking for 3 or 4 sets of documents, number one, we need a very brief information on who you are, because you need to know who you are giving money to, how they are organized and how they handle money. And of course their experience and track record.
The second set is about the technical information, obviously your typical drawings, architecture, civil and all of that.
The third information that we need is the financial appraisal and assessment, and to make that easy for you, we have developed a fairly simple template, which we will e-mail to you and you can fill, and it basically tells you what is happening with regards to the cash flow and the viability of the project.
The fourth document is some statements around your marketing strategy, we want to understand what your strategy and your plan is for linking the production of the houses, to the buyers, that is an area that is of interest to us. So it’s basically as simple as that’’.
He added that interested developers can check the Family Homes Fund website to see the guidelines to developers for accessing financing from the Family Homes Funds.