The African Development Bank (AfDB) has approved a US$ 15-million senior loan to GHL Bank PLC, which focuses on mortgage finance, to enhance its mortgage loan portfolio and help develop an effective affordable mortgage industry in Ghana.
It said in a release to the Ghana News Agency that Ghana’s lower-middle and middle-income earners will now have greater access to long-term affordable mortgage finance.
GHL Bank PLC, formerly, Ghana Home Loans Limited was previously the only specialized mortgage finance institution in Ghana, helping to address the national housing shortage by providing long-term finance to lower-middle and middle-income new homebuyers.
It has disbursed over US$ 191 million in mortgage loans, benefiting more than 3,000 households, serving the majority of Ghana’s urban and suburban centres.
The senior loan will have multiplier effects on housing sector industries and employment in the mortgage value chain.
It will complement the government’s efforts to develop a self-sustaining long-term affordable mortgage market and encourage orderly urban development for providing basic utilities such as water, sanitation, roads and electricity.
The intervention is in line with the Bank’s High 5 agenda and specifically ‘Improving the quality of life for the people of Africa.’
It complements the Bank’s current initiatives to support affordable housing and development of mortgage finance institutions in Africa.
The Bank supports investments that help widen and deepen financial systems in Africa, and that enable the private sector to mobilize and access long-term local currency funding from local financial and debt markets.
Know the rules of your loan, or else it will cost you a pretty penny. Q: I recently took out a mortgage to purchase my first home. It’s a condo. I went with a nontraditional lender that offered a loan about 1 percent higher than the market rate, as this was the only lender who would fund a loan on a condominium with open litigation.
The association was suing the builder for construction defects. Within days of closing, the lender immediately sold my loan to a different loan servicer. About a month after the sale to the new servicer, I received notification from Fannie Mae that they had acquired my loan.
By February 2018 the litigation was settled, and I qualified for a standard loan with a traditional lender (“Bank”). A couple of weeks after successfully refinancing, I received notification from Lender A that Service had “hit” them with an EPO (early pay off) penalty, and I was incurring a prepayment penalty of approximately $10,000.
Given Fannie Mae was the owner of my loan at the time I refinanced, is this prepayment penalty enforceable? When I combed through my mortgage packet there is specific language in the Note and Deed of Trust saying I shall not be charged a prepayment penalty. However, sure enough, there was a supplemental “rider” included in my packet that stated I “may be charged a prepayment” penalty.
Does one document take legal precedent over the other? Am I still liable for the penalty?
A: A couple of years ago, the federal government enacted new rules governing disclosures when it comes to home loans. One of the important changes was the requirement that a lender delivers to you a closing disclosure. If you can go back to your file, you should see if you received this closing disclosure. We would be very surprised if you did not.
One of the main points of this closing disclosure document was to prominently display the basic terms of your loan. In large print and boxes, the disclosure will tell you the following: the loan amount, the interest rate, your monthly principal and interest owed, whether the loan has a prepayment penalty and whether the loan has a balloon payment.
It is not unusual for a lender to create a loan package and use the standard forms for residential notes and mortgages and then attach a rider with the prepayment penalty language. Having said that, it would be quite strange to us if the lender did not use the closing disclosure form. If the closing disclosure form indicated you had a prepayment penalty and that prepayment penalty was reflected in the note, it would appear you agreed to it.
Back in the boom days of the real estate market, pre-Great Recession, we would see quite a number of loans with no money down, loans with prepayment penalties and loans with negative amortization. We are aware some condominium developments do not fit into the nice categories Fannie Mae and Freddie Mac have for them, and that might lead you to use a different lender who offers unique or less than desirable loan terms.
When we have come across these types of deals, we usually see a higher interest rate. But, we have not seen prepayment penalty loans in quite some time; and we are pretty surprised your relatively recently closed loan had one.
You need to check all of your documentation. We have to assume that if the lender did not disclose the prepayment penalty to you as may have been required, the prepayment penalty may not be valid or, if it is valid, could give you a right to fight the lender on this charge. After you look at your documents, you will have a better idea of where you stand.
Once you have more information, you can address the issue with the lender or hire an attorney to go over the documents in detail and determine how to proceed.
To our other readers: You must read all of your documentation carefully so you know exactly what kind of mortgage terms you have agreed to and do not get surprised by an unwelcome, and very expensive, fee.
Vice President Yemi Osinbajo Thursday afternoon arrived in Benin, the Edo State capital, for a two-day official visit to the state.
The News Agency of Nigeria (NAN) reports that the presidential aircraft that conveyed the nation’s number-two man landed at the airport at exactly 2:29 p.m.
Mr Osinbajo, who is expected to inaugurate some projects in the state was received at the airport by Governor Godwin Obaseki, top government officials and leaders of the All Progressives Congress (APC).
The state cultural troupe was also at the airport to welcome the vice president to the ancient city.
NAN reports that the airport and the road leading to the city were adorned with posters and banners, welcoming the vice president.
Mr Osinbajo thereafter headed to Edaiken Market at Iselin, where he inaugurated a pilot phase of a solar power project under the Energising Economy Programme of the Federal Government.
He would also inaugurate the Benin Technical Innovation Hub that is expected to host over 25 ICT companies geared towards training young and old people on various ICT-based skills.
NAN reports that the two-day visit would also see him perform the foundation laying ceremony for the construction of 1800 housing units.
The housing unit is a joint venture project of the government of Edo and a private sector organisation.
Also in his itinerary, Mr Osinbajo would also visit the 480 mega watts Edo-Azura power project and also attend a town-hall meeting with beneficiaries of the Social Investment Programme (SIP) of the Federal Government.
The vice president would later meet with the Micro, Small and Medium Enterprises (MSMEs) community in the state, as part of the Federal Government’s efforts at deepening the sector to boost economic growth.
THE APPOINTMENT On November 11th 2015, Babatunde Raji Fashola (SAN) was appointed the Minister of Power, Works and Housing. His appointment then was greeted with mixed reactions. Some claimed the weight of handling three key ministries will be too much for him to bear while others believed he is a ‘superman’ who is equal to the herculean task. Perhaps after listening to a wide range of public opinion, President Muhammadu Buhari decided to appoint two ministers of state for the Ministry to assist him. Baba Shehuri and Suleiman Hassan were appointed to assist in ensuring the delivery of good governance to Nigerians from the Ministry.
FASHOLA’S AGENDA FOR HOUSING Speaking for the first time in December 2015 as the new Minister for Power, Works and Housing, Babatunde Fashola outlined his plans to reform the ministry.
In his inaugural media briefing with the theme, “Setting Agenda for Delivering Change”, Fashola picked his bearing from the huge expectations of the Nigerian public who voted for the All Progressive Congress (APC) message of Change and elected President Muhammadu Buhari to office having promised to address the challenges of security, corruption and dwindling economic fortunes of the country, Fashola noted that the cooperation of Nigerians was needed in order to achieve the realization of the expectation with the Ministry playing its expected role in the process.
In analyzing the current situation, the Minister blamed the economic downturn which has led to massive loss of jobs in the country, to the anomaly in budgetary expenditures over the years. He said in order to achieve the needed change in the economy of the country; the ratio of Capital Expenditure to Recurrent Expenditure must change in the 2016 Budget adding that this had been the bane of budget implementations in the past.
“The first thing that must change is the Capital to Recurrent ratio of the budget, and our colleagues in the Ministries of Finance and Budget and Planning are working on this and they will address you at their own time on the changes they have made and what citizens must do to enable them achieve that plan. As I have had cause to say before, the budget is the article of faith of every serious nation and government and our resolve to do more capital spending with less resources must be indicative of our seriousness to reflate this economy”, the Minister said.
On the issue of housing, Fashola noted that “if we complete our ongoing projects and we get land from the governors in all states and the Federal Capital Territory (FCT) to start using the LagosHOMS model, we should begin providing 40 blocks of housing in each state and the FCT.” He also stated that “we see this leading to the potential delivery of 12 flats per block and 480 flats per state, subsequently providing 17,760 flats nationwide, for a start.”
“The Federal Government of Nigeria plan introducing mortgage schemes and we plan adopting the Lagos state model, specifically Lagos Home Ownership Mortgage Scheme (LagosHOMS), to achieve this. The LagosHOMS project, has given about 400 people keys to their apartments in Lagos, since it was introduced in March 2014. This scheme was introduced to battle increasing over-population in Lagos state and the corresponding increase in rent in Lagos state. The scheme appears to be a success, attracting more customers every day. Nigeria would also benefit from the housing scheme, with projections indicating the country will be the fourth most populated country in the world by 2050.”
According to him, “This will translate into a minimum of 4 doors and 2 windows very conservatively per home; a demand for 71,040 Doors and 35,520 Windows nationwide in year one, which we will encourage to be made in Nigeria. The demand for those who will make and fix the doors and window, the hinges, the wood polish and the paint and tiles suggest the onset of jobs and change for our artisans and workers who are the real builders of every economy”.
4 KEY POINTS OF NIGERIA’S NATIONAL HOUSING POLICY UNDER FASHOLA The Ministry of Power, Works and Housing in 2017 unveiled a National Housing Policy that focuses on, among other things creating and expanding economic opportunity for Nigerian artisans, builders and tradesmen. According to the minister in charge of the ministry, Babatunde Fashola, the policy is founded on the following considerations: 1. National Acceptability: A national housing program must have national acceptability in terms of diversity of design in response to cultural and climatic diversities. We have finalized and settled on 6 (six) designs, classified into 2 (two) broad sets of designs: Bungalows in the North and Blocks of flats in the South. All of these were achieved by local architects in the ministry with a voluntary contribution from outside the ministry, but with all of it totally home grown. 2. Standardization of Design and Input: The next step is to standardize these designs, windows and fittings and all of these have been done – again by local capacity. 3. Efficiency of Construction: The third step is to build industrially and reduce construction time. We are using local capacity to leverage international capacity to achieve this. 4. Local Content: We have resolved to use only the following made in Nigeria items; Doors, Windows, Tiles, Ceilings, Plumbing accessories, Cables, Paint and Ironmongery
THE EARLY DAYS To kick start action in the Ministry, the Federal Government in 2016 set out targeting the provision of mortgages at single digit interest rates and long tenor as it plans to unveil a new housing finance initiative. Minister of Finance, Kemi Adeosun, revealed this at the 32nd Annual Conference and General Meeting of the African Union for Housing Finance (AUHF) which was held in Abuja.
She said the initiative to finance housing projects is aimed at the construction of over 300,000 affordable houses through mortgage financing and creation of 700,000 new jobs across the housing development value chain. The minister explained that government was also contemplating putting in place foreclosure law and that would expedite legal processes for dispute resolution that is needed to support the development and growth of mortgage institutions in the country.
She emphasised the need to put in place monetary policies that would support low interest rates by finance institutions “as a means of boosting activities in the mortgage industry”, adding that federal government is committed to bringing down the current high interest rate.
Represented by Mr. Seye Senfuye, the minister said: “We are committed to fundamentally addressing historical challenges to housing. This requires innovative financial solutions that will stimulate housing development, related industries, create jobs across the nation and satisfy yearning for security through home ownership. Nigerians deserves to acquire affordable homes, built to a standard of good quality, located in well serviced estates that will create ideal environments in which they can raise their families, instead of being saddled with the challenges and risks of trying to build their homes organically. Due to the current high rates of interest, we believe that government intervention to bring down rates and enhance affordability is needed and we are committed to doing this.”
Also speaking at the event, Minister of Power, Works and Housing, Mr. Babatunde Fashola unveiled plan by the federal government to de-risk lending to property developers and provide guarantees and credit enhancement to stimulate growth in the housing sector. Fashola who was represented by Mrs. Eucharia Alozie, Director, Public Private Partnership (PPP) in the ministry, said government recognises that provision of leverage and guarantees are critical to attracting private sector funds to the industry, thereby creating thousands of affordable houses yearly and generating employment and commercial activities.
“From the inception of government’s initiative in organised housing finance system (in Nigeria) to date, only meager sum have so far been injected into the system. This accounts for less than 0.5 per cent of the GDP compared to other climes, like the United Kingdom and South Africa. This is due to the inability of financial systems to provide low cost finance that meets the need of low and medium income earners,” he stated.
FASHOLA AT AIHS 2017, LISTS MAJOR CHALLENGES IN THE HOUSING SECTOR Everything in life comes with its own challenges and Government’s intervention in housing is not an exception. At the 2017 Abuja International Housing Show, The Minister, Mr Babatunde Fashola, said the major challenges of housing development in the country are financing, affordability and acceptability.
According to him, majority of the estates are not occupied due to inadequate infrastructure, which discourages people who are interested in owning property. “As we discuss housing finance, let also understand that financing is not only the problem, there are many others, there is the issue of affordability and also that of acceptability. “ We have empty houses in many states of the federation, why are they not occupied, can people afford them; if they can afford them, do they like the way they were built? “It is a problem, we must connect and build to the taste of the home taker, I think the financing and infrastructure problem will remain with us as long as we live.’’
He said that the ministry had in the past one year designed a national housing model in response to the climatic and cultural diversities of Nigerians. Fashola said that the size of the problem in the housing sector should not affect the enthusiasm of Nigerians to find solutions to the present housing deficit. “Let us focus more on what we can contribute, what we can do; rather than how big the problem is. “It is indisputable that housing is a problem globally; so let us focus less on how big it is and focus more on what we can do’’ he said.
THE LAUNCH OF THE NIGERIA HOUSING FUND PROGRAMME Determined to make housing finance easy and affordable, the Federal Government on August 29, 2017 initiated the Nigeria Housing Fund Programme (NHFP) which is under the Social Investment Fund of the Federal Government in which N100 billion has been set aside for its take off.
The Nigeria Housing Fund Programme was a Federal Government scheme that is being coordinated by the Central Bank of Nigeria, CBN, to ensure access to housing finance by prospective home owners. The scheme which has the World Bank and AFDB as contributors to the fund affords real estate developers who develop for social housing the opportunity to borrow 80 per cent of cost of project and source the remaining 20 per cent.
Specifically, the government has under the NHFP launched My Own Home Scheme to enlighten those seeking to own houses of theirs across the country on how to key into the scheme and become beneficiaries.
Unveiling the scheme in Lagos in 2017, stakeholders who were in attendance such as mortgage finance operators, Central Bank of Nigeria and NPF Micro Finance Bank lauded the scheme.
Mrs. Adenike Fasanya-Osilaja, Housing/Mortgage Finance consultant to the CBN on the My Own Home Scheme, said the initiative was in collaboration with the federal government, World Bank and Mortgage Banks Association of Nigeria (MBAN), with other relevant stakeholders to ensure that challenges in housing finance are tackled.
Fasanya-Osilaja explained that civil servants and prospective home owners in the private sector needed to be properly guided on the best approach to accessing mortgage loans, hence the launch, adding that the NHFP would create the enabling environment for strengthening the Nigerian housing sector by setting up sustainable framework for mortgage originators.
She said those mortgage originators range from financial institutions that provide housing finance to access long-term refinancing, pointing out that the framework will lead to setting up of mortgage guarantee/insurance as well as a housing micro finance scheme for strengthening of Nigeria’s housing micro finance sector. She noted that intending house owners are advised to shop around to compare rates before taking a mortgage or housing finance loan.
Fasanya-Osilaja further stated that the NHFP intervention would include a mass literacy campaign on consumer education, protection and responsibility with regards to housing finance in Nigeria, insisting that the campaign is aimed at educating every Nigerian on the right to own a home, the cost implications, advantages of taking loans to finance a home and to ultimately serve as a catalytic program to jumpstart the housing market in Nigeria.
Deputy Director, Other Financial Institutions Supervision (OFIS) at CBN and a Director in NHFP, Adesemoye Adedeji , disclosed that to ensure its accessibility and effectiveness, nine Micro finance banks (MFBs), would be participating in the scheme, which is funded with $300 million, adding that the arrangement would capitalise on mortgage guarantee and insurance with $15 million for the pilot housing micro finance.
According to him, the money was with the CBN for proper monitoring and execution to avoid disbursing it to wrong channels that can’t handle housing projects.
President of the Mortgage Bankers Association of Nigeria, and Managing Director, Trustbank Mortgage Ltd, Mr. Niyi Akinlusi, said the scheme was a departure from other housing schemes in Nigeria, noting that NHFP has set up a framework that would revamp the housing finance sector by making access to finance a lot easier through its four major components, which include the Nigerian Mortgage Refinance Company, whose task is to provide long-term refinancing of mortgages and standardizing mortgage procedures,
Mortgage Guarantee/Insurance Scheme, which is responsible for providing borrowers with initial down payment with mortgage for home ownership. “The Housing Micro finance Scheme is meant to stimulate increased lending to low-income earners in the formal and informal sectors in Nigeria through Micro finance banks for incremental housing construction or housing improvement, while the technical assistance for the scheme shall ensure the protection of all the parties involved in the scheme”, Akinlusi said.
MORE PROMISES AS AT END OF 2017 With two years gone in the life span of the administration, it was more promises galore. Babatunde Raji Fashola, the Minister of Power, Works and Housing disclosed that the Federal Government is committed to growing the housing sector and harnessing its vast potentials for sustainable national development, stating that housing has been a driver of economic growth throughout the world and that there is no reason why Nigeria cannot achieve same.
In his keynote address delivered at the 2017 World Habitat and World Cities Day commemoration in Abuja, the Minister, represented by the Minister of State II in the Ministry, Surv. Suleiman Hassan Zarma, said that the dual theme of the 2017 celebration : ‘ Housing Policies: Affordable Homes’ and ‘Innovative Governance, Open Cities, is a “reflection of a strong attempt to follow up on Agenda 2030 and the New Urban Agenda adopted in Quito, Ecuador in 2016”.
He added that it will afford policy makers in Nigeria the opportunity to review and evaluate past housing policies and assess their impact as well as strategize for the future. He said that government has put in place the necessary machinery to jump- start a housing revolution through the innovative nationwide National Housing Programme.
According to him, “the pilot implementation stage has already created opportunities for 634 contractors, created 13,689 direct jobs and 41,000 indirect jobs’’. He noted that if the Programme could be replicated on a yearly basis and also successfully implement the housing cooperatives, leverage private sector capacity, strengthen FHA and FMBN to play their roles, we will be creating an affordable housing economy that will fortify and transform our nation in the nearest future.
The Minister stated that, “to complement these efforts, we have activated the Road map for Nigeria’s Housing and Urban development Sector, and are in the process of producing a strategic National Physical Development Plan to integrate physical planning with economic development,” adding that the National Building Code was also being revised to curb incessant building collapse in the county and to ensure proper alignment with the International Building Code.
In his welcome remarks, the Minister of State I for Power, Works and Housing, Hon Mustapha Baba Shehuri, reminded stakeholders in the housing sector of their duties to develop policies capable of providing basic infrastructures and social services that could be lacking due to rapid urbanization of cities. He said, “We are therefore duty bound to generate responsive policies which are capable of turning around the current poor state of our cities and guarantee efficient delivery of infrastructure and basic social services.”
WE ARE COMMITTED TO AFFORDABLE HOUSING POLICY- FASHOLA Earlier this year, the Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola, warned government agencies in the housing sector that the provision of affordable housing policy of the Muhammadu Buhari administration must be delivered to the people. Mr. Fashola gave the charge at the inauguration of the Governing Boards of the Federal Housing Authority, FHA, and the Federal Mortgage Bank of Nigeria, FMBN, in Abuja. He said the agencies must be repositioned in order to deliver service to Nigerians.
The minister recalled that “Since the FHA and FMBN were set up, they have experienced their fair share of challenges while they have also become well-known brands within the country.”
According to him, “This is now your responsibility to reposition these brands and utilise them, by providing the guidance for the managing directors and management teams of FHA and FMBN to enable them deliver service to Nigerians. “For the avoidance of doubt, let me state that the policy of government is to deliver affordable housing, acceptable to Nigerians and these agencies, whose brands you will now administer are the implementing arms of government for housing delivery (FHA) and housing financing (FMBN).
“The managing directors and their management teams have the executive responsibility for carrying these out, subject to your Boards’ oversight, approvals and advice, while the ministry plays a supervisory role. “Therefore, we expect to see harmony, respect, teamwork and a healthy working co-operation between boards and management. On the part of the ministry, I assure you that we will supervise but we will not interfere. For your information, we are piloting a housing programme and currently constructing in 33 states of Nigeria.
“We do this to validate and test what type of housing design responds to Nigeria’s diverse cultural, climatic and religious needs, so as to ascertain what is acceptable and affordable. “We are at different stages of construction in different states, and we have recommended these designs to FHA, without imposing them. Our decision is informed by the evidence of previous housing initiatives that people did not take up and empty houses that still abound in almost every state of Nigeria.
“These houses that are not taken and the deficit of housing, suggests to us that the houses not taken are either unacceptable or unaffordable or both. We see housing as a product, and we take the view that before they can be delivered to market, we must know what the people want and what they can afford. When our pilot is fully completed, these answers will become self-evident and this is when we can mass produce.
“There is certainly nothing that stops FHA from undertaking other designs of housing if it can find a market for them, and it can deploy the income to cross-subsidize and make mass housing more affordable. As for the financing side, this is critical to affordability and it is as much the function of FHA in cost management and delivery as it is that of FMBN in delivering mortgages of affordable tenures and costs.
“Since May 2015 to date, FMBN has issued 2,724 mortgages worth N20.237 billion to assist Nigerians buy their own homes under the National Housing Fund NHF”
THE ACHIEVEMENTS SO FAR The effort of the Federal Government in the housing sector through the implementation of the National Housing Programme has so far yielded about 64,000 jobs. The government apart from addressing housing deficit in the country by injecting over 2000 housing units, the present administration has succeeded to some extent in reducing unemployment across the nation. This has become possible because of the multiplier effect that housing construction has on the economy. For instance, all categories of workers in the construction industry has benefitted from the Programme.
It is on record that in the few places where the NHP projects are being executed presently, artisans, farmers and suppliers in the country are getting more empowered through the National Housing Programme aimed at providing affordable houses in Nigeria. Under the National Housing Programme, each State Government provides land while the Federal Government through the Ministry of Power, Works and Housing provides physical housing units in the 36 states.
As at today, the Federal Government is carrying out construction of housing units in 33 states of the Federation where land has been made available for workers under its National Housing Programme. Under the programme, 653 contractors were engaged in the pilot scheme to deliver 2,736 units, while a total of 54,680 people were employed in the process.
EXPERTS ASSESSMENT OF THE HOUSING SECTOR IN THREE YEARS On May 29th this year, some experts in the industry had their say on the three years of the Administration so far in terms of providing affordable housing for Nigerians. According to Abioye Oke, the CEO of Lifestyle Asset Hub Ltd “as we reflect over the past 3 years of this Administration and how it affects the housing sector…. As you might all agree, the current traditional real estate acquisition options in Nigeria are not working for the majority…. Hence, the over 17m units housing deficit… I classify these options into 4. How many Nigerians can afford to buy a small 2 bedroom flat with 15m-20m? Not to talk of a Terrace Duplex Apartment. How many Nigerians benefit from our Mortgage System? Those that have access how many can afford the 30% equity funding? Most go to the bank to borrow their 30% and end up having shelter without Lifestyle.
He added that “how many Nigerians can boast of receiving a house as a gift from their late parents? Then talk of selling properties and saving up your commission. Or Sell 20 properties and get 1 free. Very smart options I will say. But how many people achieve this? Very few. Currently, Nigeria has over 17 Million housing deficit and it could take over 20 year to cure this”
Another expert, Joshua Egbagbe said “Manifestos are laudable, but are quickly forgotten when the realities of their implementation are realized. Unless there is a grassroots advocacy by the various associations, more of the same will continue. I would have thought that a deficit of 17 million housing units would be a catalyst for the political class, whether they be APC or PDP, to act. Put in perspective, 17 million units roughly equates to the populations of the 17 African counties with the smallest population. Is this not a clear example for Nigeria to grow its GDP?. If the political class doesn’t act as the catalyst, then someone like Julius Malema will”
For Mr Raymond Lebona “if the load is too big for Your Head, Shouldn’t your good neighbour offer you help”? Jokes apart, it’s truly our common responsibility to enforce accountability! Where have we all been, with our various “powerful” Associations and Professional Bodies in the built environment; without holding up for scrutinizing the Government’s self-arranged load, without stepping forward from Day 1 to hold serious, self-less and pragmatic “Load-Related” conversations with our friends and leaders in this matter?
REDAN’S POSITION ON THE SECTOR: Undefined Operating Environment Hurting Housing Sector Taking a position on the happenings in the housing sector for the last three years, the Real Estate Developers Association of Nigeria (REDAN) expressed concern that the current undefined operating environment in housing sector has yielded too many casualties for the association to ignore. The President of the association, Rev. Ugochukwu Chime noted that the challenges hindering a seamless interface of and smooth transaction on the housing value chain had been identified and would be dealt with progressively.
He said: “Issues of data, finance, land administration, monitoring and compliance with the extant laws and best practices e top of our priority list.
“In doing so, we call on government arms- the executive and legislature to give us support in our course to bring succour to the Nigeria’s real estate sphere. The structure and enabling environment that will govern the interface and relationships among players must be clearly defined.
“The current undefined and uncharted leap of faith operating environment has yielded too many casualties for us to ignore,” Chime said.
“We shall further the work we initiated with Federal Mortgage Bank of Nigeria (FMBN), Nigerian Mortgage Refinance Corporation (NMRC) and other stakeholders to ensure ease of doing real estate business and make home ownership accessible and affordable, while expecting cooperation from policy makers and other agencies,” Chime said.
IMPACT OF FMBN AND NMRC IN THE LAST THREE YEARS Among the numerous impacts of the Federal Mortgage Bank of Nigeria (FMBN) in the last three years is its boosting of housing in seven states with 1,500 units. This was done amid concerns that a yearly rural-urban migration of over 5 per cent requires 720,000 housing units annually to fill the nation’s housing deficit.
The units developed by the bank in seven states; namely, Taraba, Kwara, Enugu, Ebonyi, Imo, Nassarawa and Niger were commissioned in 2017. For instance, in Jalingo, 202 housing units, made up of 88 three-bedroom semi-detached bungalows, 90 two-bedroom semi-detached bungalows and 24 one-bedroom terrace flats were completed.
FMBN has also funded a number of estates in Taraba State with a total investment of about N1.4 billion in the development of a total of 378 housing units. The housing Estates being developed by FMBN across the country are financed from the resources of the National Housing Fund (NHF) Scheme. The NHF is a contributory scheme into which Nigerian workers in both the public and private sectors earning a minimum of N3, 000 per annum contribute 2.5per cent of their monthly income.
On the basis of their consistent and continuous contributions to the NHF scheme, Nigerian workers become eligible for mortgage loans at a concessionary interest rate of 6 per cent yearly and repayable over a maximum period of 30 years to ensure affordable home ownership among Nigerians.
The effect of these concessions reduces upfront homeownership costs by at least 20 per cent. By making homeownership more inclusive, FMBN is refocusing its business to make mortgages more affordable to a wider segment of the market, which now includes the mass and middle income segments of the population. The targeted average price per unit of a house to meet these customers is estimated at between five million to seven million naira per unit.
With these developments, FMBN is achieving its mandate in terms of cost management, resource optimization and waste reduction. For the 2016 financial year, the Bank posted an Operating Surplus (profit) of N2.7 billion – the first such impressive performance in two decades which is 50 per cent above the budgeted N1.8 billion for 2016.
Within the time period, the FMBN also delivered 72 housing units to the Ebonyi State Government for the use of its civil servants. The houses are located at Ezzambgo, Ohaukwu Council area of Ebonyi State. The housing units consist of 5 units of 3-bedroom fully detached bungalows, 30 units of 3-bedroom semi-detached bungalows and 12 units of 2-bedroom terrace. It also consists of 20 units of 2-bedroom semi-detached bungalows and 5 units of 1-bedroom terrace,” he said.
The Nigeria Mortgage Refinance Company (NMRC) has equally been active in the last three years. In 2017, in an historic move to deepen mortgage penetration and widen access to affordable housing, the NMRC in conjunction with the Central Bank of Nigeria (CBN), the Mortgage Banking Association of Nigeria (MBAN), the Federal Mortgage Bank of Nigeria (FMBN) and the Nigeria Deposit Insurance Corporation (NDIC) launched Uniform Mortgage Underwriting Standards for the informal sector.
The new standards will for the first time attempt to bring the operators in this sector, which constitute about 67.54 million of Nigeria’s 81.15 million workforces into the mortgage and housing net. The informal sector is estimated to account for over 60% of the country’s GDP.
The NMRC also signed a landmark partnership deal with Kohath Housing Corporation to provide over 15,000 housing nationwide to low income earners. The partnership would help bridge housing gap in Africa, especially in Nigeria.
Another deal was also struck with Modern Shelter Systems and Services Limited. In line with its market development mandate, NMRC signed a memorandum of Understanding with Modern Shelter Systems and Services Limited as part of efforts to remove systemic barriers to home ownership for off takers. Key areas of focus for the partnership include resolving equity contribution constraints, improving access to mortgage loans and enhancing delivery of quality and affordable housing.
The partnership aims to facilitate access to alternative finance investors and improve Modern Shelter’s ongoing engagement with Sterling Bank and Jaiz Bank using non-interest mortgage banking structures. It will support Modern Shelter’s plans to deliver over 5000 housing units over a 5 year period across key states in Nigeria.
HOUSING DEVELOPMENT ADVOCACY NETWORK EFFORTS IN THE HOUSING SECTOR A housing expert, Mr Festus Adebayo, who has been at the forefront of advocating for affordable housing in the last 15 years appealed to the Federal Government to show more commitment and exercise strong political will in ensuring speedy growth in the housing sector.
Adebayo who is also the convener of the annual Abuja International Housing Show said “For the betterment of the housing sector, the Federal Government should show strong commitment by exercising the political will to make the housing sector grow.” The expert commended the efforts of Fashola but said the present government can do better.
According to CoreLogic’s monthly Loan Performance Insights Report, 4.3 percent of U.S. residential mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in March 2018, representing a 0.1 percentage point decline in the overall delinquency rate, compared with March 2017 when it was 4.4 percent.
As of March 2018, the foreclosure inventory rate – which measures the share of mortgages in some stage of the foreclosure process – was 0.6 percent, down 0.2 percentage points from 0.8 percent in March 2017. Since August 2017, the foreclosure inventory rate has been steady at 0.6 percent, the lowest level since June 2007, when it was also 0.6 percent. The March 2018 foreclosure inventory rate was the lowest for that month in 11 years; it was also 0.6 percent in March 2007.
Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. To monitor mortgage performance comprehensively, CoreLogic examines all stages of delinquency, as well as transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next.
The rate for early-stage delinquencies – defined as 30 to 59 days past due – was 1.7 percent in March 2018, unchanged from March 2017. The share of mortgages that were 60 to 89 days past due in March 2018 was 0.6 percent, also unchanged from March 2017. The serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – was 1.9 percent in March 2018, down from 2.1 percent in March 2017. The March 2018 serious delinquency rate was the lowest for that month since 2007 when it was 1.5 percent.
“Unemployment and lack of home equity are two factors that can lead to borrowers defaulting on their mortgages,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Unemployment is at the lowest level in 18 years, and for the first quarter, the CoreLogic Equity Report revealed record levels of home equity growth with equity per owner up $16,300 on average for the year ending March 2018.”
Since early-stage delinquencies can be volatile, CoreLogic also analyzes transition rates. The share of mortgages that transitioned from current to 30 days past due was 0.7 percent in March 2018, up from 0.6 percent in March 2017. By comparison, in January 2007, just before the start of the financial crisis, the current- to 30-day transition rate was 1.2 percent, while it peaked in November 2008 at 2 percent.
“As we enter the summer, the risk of hurricane and wildfire damage to homes increases as does the risk of damage-related loan default,” said Frank Martell, president and CEO of CoreLogic. “Last year’s hurricanes and wildfires continue to affect today’s default rates. Serious delinquency rates are more than double what they were before last autumn’s hurricanes in Houston, Texas, and Naples, Florida. The serious delinquency rates have also quadrupled in Puerto Rico.”
As part of the slum upgrade program of the Liberian government, delegates from the Liberia National Housing Authority (NHA) comprising of the managing director, Duannah Siryon and the technical assistant, Kollie Bombo, recently paid a 2-day working visit to the Fuller office in Nigeria.
The reason for the visit was to discuss a collaborative partnership between the Liberian government and the Millard Fuller Foundation. Attending the meeting were the management team of MFF Housing, and the Shelter Afrique Resident Regional Representative & Regional Business Manager – Anglophone West Africa, Zachary Kenyatta Munene.
Sam Odia, the CEO of Millard Fuller Foundation made a presentation of the MFF housing model, its aims, objectives, vision, and projects. During his presentation, Odia said: “If the houses you are building are not affordable to 50 percent of the population in that area, then you are not building affordable houses.
“In Nigeria, we have a deficit of 17 million houses; this is a challenge in itself as 40 percent of the population earns less than US$40 per month. At the Millard Fuller Foundation, we are not just builders and developers; we are advocates of affordable housing. Our projects, over the years, have also provided a source of livelihood to many as we have created thousands of jobs since our inception. All our materials are locally sourced; we do not import anything and we are hopeful that jobs will be created for Liberians through our methods.”
In his presentation, Mr. Siryon said that though the Liberia NHA was created in 1962, it had built less than 2,000 houses. “President George Weah has been made to understand that housing is fast becoming a national security issue, which is why he introduced the Rural Affordable Housing Project with the aim of taking affordable housing to the rural areas. If people don’t have somewhere to stay, they become vulnerable to crime.
“Our strategic goal, therefore, is to make sure we build 30,000 affordable homes yearly, 60-70 percent of which will be located in the rural areas to encourage the movement of people to the rural communities, as Monrovia is already choked up with about 113 slum communities.”
He further said that though the unemployment rate in Liberia is 80 percent, while the youth population is 62 percent, the Millard Fuller Foundation will make a difference if it will put the climatic conditions into consideration by taking advantage of durable local materials and components that can build a decent house.”
After the meeting, the delegates went on a tour of the various Fuller Housing projects to get a first-hand assessment. Visibly impressed, Siryon commended the Millard Fuller Foundation for providing affordable homes to Nigerians and hoped that same will be replicated in Liberia.
The Liberia NHA was created in 1962 and is tasked with the mission of providing decent, adequate and affordable housing to low-income families, and to ensure the provision of community facilities, utilities and access to social services and economic opportunities.
Mr Olusola Kayode, former Representative of Nigeria to UNIDO-France, has called for introduction of high tax regimes for vacant houses to check the proliferation of empty houses in urban centres.
Kayode made the call in Abuja in an interview with the News Agency of Nigeria (NAN).
He expressed concern about the existence of empty houses in many neighbourhoods in major towns in the country whilst many people remained homeless or lived in squalor.
“There have been worrisome trends of empty houses in many neighbourhoods in Abuja in spite of the prevailing high housing deficit.
“When you look around there are so many houses locked up and here are people in satellite towns and slums looking for houses to live in.
“This, therefore, requires that policies stipulating punitive measures such as high tax regimes for vacant houses should be promulgated to check the proliferation of empty houses that tend to create artificial scarcity and high rental values.
“There should be punitive measures for people who lock up buildings and are not letting out; invariably that should be a deterrent to future practice.
“There should be legislation to that effect and erring people must be sanctioned,” Kayode said.
He further urged the Federal Government to embark on mass housing scheme in order to provide adequate accommodate for civil servants and people who were dislodged by the insurgency.
According to him, shelter is one of the most important things needed by man and when a human being is well-sheltered, any other thing can follow.
“Insurgency has ravaged this country in the last few years and there has been mass migration from places where people lived all their lives to new environment.
“How do we address the issue of housing them because presently most Internally Displaced Persons (IDPs) camps are make-shift ones?
“The hygiene is poor and when people live in zones that are not habitable, the threat of diseases emerging becomes obvious.
“So government must use local materials to accelerate mass housing scheme because the cost of housing is prohibitive.
“It is not only a housing scheme for the IDPs but also for civil servants,” he added.
Nigerian Engineers have expressed their concern over the inability of the private sector to drive housing delivery in the country, instead, governments both at the federal and state levels taking the lead, a situation considered inappropriate.
Besides, the group urged government to look into how Ajaokuta Rolling Mill and others could be resuscitated so that the dream of local production of building materials, especially, steels be quickly realised.
Speaking on the backdrop of President Muhammadu Buhari’s three years in office and his comments on infrastructure drive by his administration, President of the Nigerian Society of Engineers (NSE), Mr Kunle Mokuolu, has called on the Federal and State governments to provide proper framework that would ensure better housing delivery for Nigerians.
Mokuolu, while assessing infrastructure growth under Buhari’s administration in the last three years, scored the government high on road and power infrastructure, but expressed reservations about the housing sector.
He was of the view that governments at the two tier, would succeed better in mass housing drive if more private sector participation is facilitated, stating that housing delivery in advanced countries fared better because they are been driving by the private sector.
“While one can commend government’s efforts on provision of road and power, my advice to the current administration is to create the enabling environment for private sector initiative in the housing sector.
“I am satisfied with level of road infrastructure delivery but I want government to pay more attention to Nigerian content in the delivery of this infrastructure.
“If we are spending our sovereign wealth fund, then, we should be spending it for the sole benefit of Nigerians and for building of intellectual capacity, because the most important thing is the intellectual capacity of those projects, and not solely the physical ones that somebody need to carry bags of cement, or load of sands.
“Although we need people to carry the cement, but firstly, we need people to design the different infrastructure that would be for our domestic use,’’ he said.
However, to the NSE President, housing should be off the hands of government, and should be totally privatised, with government duty-bound to provide the policy and laws that would back housing delivery. “With that, bridging housing deficit will be properly addressed and pursued”, said Makuolu, who enjoined government to concern itself with social housing for those who cannot pay rent because they were either out of job or had other financial handicap.
“Social housing should be handled by the local government with financial support from the federal and state governments, so that when such economically disadvantaged citizens found their financial footing, they could start to pay rent or buy homes.
“Federal government is to provide the framework to ease the delivery of housing. I am not really satisfied with the housing delivery, some things must be in place to achieve this”, he said.
Among those things that need to be in place is the local production of building materials, especially, producing of steel, which is the backbone of housing project.
Mokuolu said that Ajaokuta Steel Rolling Mill could substantially reduce the housing deficit in Nigeria, noting that steel accounted for about 25 per cent of the cost of construction of houses.
“We need to revitalise Ajaokuta Steel Rolling Mill. This is very important. Whatever it takes to produce steel in this country, government should just do it, because steel component was important in building high rise buildings as the nation’s population was growing geometrically. It’s high-rise buildings that’s capable of accommodating more people. High-rise buildings occupy less spaces or land, but take care of more population”.
On power, he commended government efforts in adopting measures to get eligible consumers for the excess of 2,000 megawatts of electricity not being utilised.
He said that it was good that government was also working on its distribution and exploring alternative sources of energy.
The NSE President lauded the success recorded in tackling insurgency, stating that inadequate security would had made nonsense of all infrastructure development of the government if not effectively tackled.
“The major variable is security, so I am appealing to Nigerians to be more law abiding and obey the laws of the country and seek appropriate legal ways of addressing grievances,’’ he said.
Former Chairman, Presidential Technical Committee on Land Reform, Prof Akin Mabogunje has revealed that without land reforms, land assets are dead capital adding that the survey process could be accelerated with sophisticated technology.
He stated this in Abuja during a four-day national stakeholders dialogue on land reform in Nigeria, organised by the Presidential Technical Committee on Land Reform (PTCLR), Office of the Secretary to the Government of the Federation (OSGF) with the theme, “Land Reform: Creating Strategic Pathway to National Economic Development and Wealth Creation”.
The housing expert maintained that though it took United States 35 years to complete their land reform that with the advent of technology, that Nigeria’s land reform could be achieved easily. He pointed out that the land use act of 1978 empowered governors as custodians of lands in their states which increased rural land manipulation.
Mabogunje who was also the former board chairman of Federal Mortgage Bank of Nigeria (FMBN) disclosed that the bonanza from oil may not be sustainable even in the medium term as some states are already feeling the impact of sharp drop in the price of oil.
He regretted that land reform is the greatest problem standing in the way of rapid economic development in Africa saying that many African countries are optimistic that land rationalisation would promote rapid economic development.
In his address, the Professor of Land Economics, Obafemi Awolowo University, Ile-Ife, Prof Ezekiel Olukayode Idowu noted that its possible for Nigeria to become one of the top twenty economies in the world through proper use of land resources.
He tasked individual’s, groups and states on the need to use their powers in ensuring efficient utilisation of the country’s land resources, thereby engendering the prosperity of Nigeria.
On his part, the chairman, presidential technical committee on land reform, Prof. Peter Adeniyi pointed out that based on the committee’s findings that not more than 3 percent of the nation’s land has been properly surveyed and registered adding that land administration is largely opaque and centralised.
He stated that programmes on critical issues of governance such as agriculture, housing, infrastructure development, urban and rural planning, poverty reduction, internal security and among others cannot be achieved at local, state and federal government levels without fundamental overhaul of land governance system in the country.
The Abuja International Housing Show (AIHS) has become one of the largest housing conferences within the real estate fields of Affordable Housing, Mortgage Banking, Property Development, Construction Finance, and Infrastructure Development. We are committed to ensuring safe, decent and affordable housing for all Nigerians.
The yearly AIHS has also proven to be a true forum where policy makers, academics as well as practitioners from all around the world exchange their knowledge and experiences and thereby built a ‘Abuja International Housing Show Community’. Through this forum, we have discussed and shared our research and experiences in order to be able to draw a more accurate picture of Nigeria’s housing needs and affordable housing realities, thus improving the diagnosing capabilities of current problems and improvement opportunities.
Our confirmed special guests, speakers and panelists for the 12th Abuja International Housing Show include:
– Professor Yemi Osinbajo SAN, GCON
– Babatunde Raji Fashola SAN
– Hon Freda Prempeh, Deputy Minister of Works/Housing Ghana
– Mr. Godwin Obaseki, Executive Governor of Edo State
– Alh. Abubakar Sani Bello, Executive Governor of Niger State.
– Mallam Mohammodu Bello, FCT Minister
– Dr. Xing Quan Zhang, Senior Advisor at UN-HABITAT
– Mallam Ibrahim Aliyu Chairman Urban Shelter Limited
– Agnes Tokunbo-Martins, Director OFISD CBN
– Abubakar Suleiman, MD Sterling Bank Plcc
– Ahmed Dangiwa, MD/CEO Federal Mortgage Bank of Nigeria
– Femi Adewole, MD Shelter Afrique
– Kecia Rust, ED & Founder Center For Affordable Housing
On behalf of my colleagues and our major sponsors, I look forward to welcoming YOU (financiers, regulators, investors, developers, syndicators and other affordable housing professionals to the 12th Abuja International Housing Show.
By Kunle Faleti – Ambassador Plenipotentiary Abuja International Housing Show