FMBN and the Strides for Affordable Housing

In a conscious effort to bridge Nigeria’s huge housing deficit which is currently put at about 17 million, the Federal Government had, among other thing,  established the Federal Mortgage Bank of Nigeria (FMBN) to provide quality and affordable housing to Nigerians.  James Emejo examines its impact on the mortgage sector

It is estimated that it would require a minimum of N60 trillion to address the current housing deficit of which about 80 per cent of Nigerians live in indecent informal housing structures with no basic amenities and in deplorable conditions.
Yet, the vision of the current administration under the Vision 2020 aspiration is to provide decent shelter for all Nigerians by 2020.
Although this appears to be a daunting task for government to realize given the present economic realities and the country’s dependence on oil as major source of revenue, efforts have been put in place by government, notwithstanding, to actualise the target through innovative financing instruments involving both the public and private sectors of the economy.

Specifically, the National Housing Fund (NHF) created by government to address the problem of housing is intended to mobilise funds for the provision of affordable residential houses for Nigerians as well as give loans to Nigerians for erecting, purchasing or renovating houses among other things.
Administered by the FMBN, the fund enhances housing financing among low and medium income earners and equally services the non - salaried informal sector, providing long-term loans to Mortgage Institutions for lending to contributors of the fund.

Housing Units for Police
One of the several positive outcomes of the activities of the NHF was the recent commissioning of 1000 housing units for the rank and file and officers of the Nigeria Police Force in Dakwa in Abuja by President Goodluck Jonathan.
The 1000 housing estate, named after former police boss Sunday Adewusi consists of three, two and one bedroom housing units.
Jonathan, who was represented by Vice President Namadi Sambo, had disclosed that since the past two years, the Police Force had so far commissioned 2000 housing units.

He described the occasion as “significant because it shows the commitment of the police authorities towards the overall welfare and the provision of affordable houses on owner occupier bases. “It is instructive and commendable to note that these 1000 units of three, two and one bedroom houses at Dakwa, Abuja, were developed through public private partnership between a reputable developer and the police cooperative limited which financed the project.
According to the president, the success of providing affordable housing for the force was made possible through the NHF loans which had been accessed by the police from the FMBN.

Jonathan, who commended the initiative of the Nigerian police in collaboration with the FMBN to provide affordable housing for its officers, also reiterated the commitment of his administration to provide affordable housing to Nigerians.
He said: “Let me reinstate that both the public private partnership development model and attention to practical model through financing initiatives are key pillars in the transformation agenda of this administration. Today, these houses have been delivered at the lowest cost, which is made possible through equity contribution to relevant stakeholders.
“I am proud to say that the present leadership of the police force has been focused on the balance development of all aspect of policing. It is encouraging that the Nigeria Police Force has built 2000 housing units just in the last two years.
A similar facility was recently commissioned by the president in one of the first modern police housing estates named after him in Lagos.

The Triumph of Public Private Partnership
The estate, named “Goodluck Ebele Jonathan Police Housing Estate,” was built under a Public-Private Partnership (PPP) scheme being financed by Aso Housing and Loans and developed by Remax developers and comprises 200 units of 3-bedroom flats.
Speaking during the commissioning ceremony, an elated President Jonathan said it was the first time the Nigeria Police would achieve such a laudable venture, adding that the federal government was committed to improving the standard of living of all police officers in the country, irrespective of their rank or status.
According to him, the PPP initiative was the only way the government could achieve many of its goals in providing the much needed infrastructural amenities.

He commended the leadership of the Nigeria Police for “taking the initiative to develop an estate for its members. Not only is this commendable, it is remarkable because it goes a long way in complementing the efforts of the Federal Government in providing low cost housing for the citizenry.”
“This government places huge emphasis on housing, because the housing sector has the potential of increasing the productivity of every person. A viable housing sector creates jobs and enhances employment opportunities,” he said.
He said one of the ways in which government aimed at improving the standard of living of police officers in the country was embarking on massive transformation of all barracks in the country.

“This will cost the government a lot of money to achieve, but at the end it will be worth it,” he said.
The Inspector General of Police (IGP), Mr. Mohammed Abubakar, said the housing units, which would be made available for different cadres of police officers was completed over a period of eight months.
Though he did not disclose the cost of building the estate, he noted each flat would be given out to interested police officers at N8 million adding that each buyer would be expected to repay through a mortgage scheme made available by the Federal Mortgage Bank of Nigeria (FMBN).

He pointed out that similar estates were currently being built in other parts of the country including Abuja, Kaduna and Kano.
The police boss however admitted that lack of housing constituted one of the challenges faced by police officers and their families all over the country and urged the federal government to help construct more barracks across the country and help rehabilitate the existing ones.
“It is only with the aggression of the federal government that acute housing shortage of the police can be tackled,” he said.
Only recently, President Jonathan also launched National Housing Fund (NHF) e-Card and commissioned the FMBN-financed ‘Aviation Village’ Housing Estate.

The commissioning ceremony which took place at the premises of the estate along airport road, Abuja was attended by some members of the Federal Executive Council, National Assembly members, business men and women as well as actors in the real estate business.
The ‘FMBN Aviation Village’ Housing Estate was developed by Suntrust Real Estate Investment Limited, a private developer, based on funding for both construction and infrastructure financing provided by FMBN to the tune of N2.4 billion.
The estate which covers a land mass of 11.9 hectares comprises a total of 270 housing units of 144 units of 2 bedroom flats, 50 units of 3 bedroom semi-detached bungalows and 76 units of 3 bedroom detached bungalows.
Jonathan who described the housing sector as critical to the economy of any country, expressed joy at the number of practical steps the present administration had taken in resolving the housing problems in the country since the Presidential Retreat that was held in December 2012.

President Jonathan said he expects a strong collaboration between the newly established Nigerian Mortgage Refinancing Company (NMRC) and the FMBN will stimulate affordable mortgage financing to reduce the cost of housing in Nigeria.
He said: “We are moving forward as a nation in our quest to reduce the housing deficit in Nigeria and I wish to commend FMBN for successfully delivering this project through the Estate Development Loan granted Sun Trust Investments.
“Our economic programme as a government is to provide the enabling environment for the private sector to drive the economy and not to play a monopoly.

“What make changes are the little things we do that makes a big difference. Our policies should be workable and sustainable and our ability to recreate and replicate them across the country is what makes the difference.”
Meanwhile, in his remarks, Managing Director, FMBN, Kimba Ya’u Kumo, commended the President on his commitment in ensuring that the current housing deficit which now stands at 17million is reduced drastically in the nearest possible time.
Kumo said since the introduction of the NHF, total collection to the fund had improved by more than 500 per cent and had assisted to ensure transparency and accountability.

NHF e-Card
He said: “The NHF e-Card being launched today is a huge step forward in delivering the advantages of speed, accuracy, transparency, accountability and superior customer experiences to NHF contributors. Mr. President would be pleased to know that we have begun to harvest the benefits of the NHF e-Collection Platform, especially in the volume of NHF collections. For instance, the rate of NHF collections rose significantly from about N700 million to over N2.2 billion per month. We estimate a further 100 per cent increase in monthly collections to achieve about N4 billion per month before the end of Year 2014.”

According to him, the bank in June 2013 launched the NHF e-Collection Platform to ensure proper record-keeping, transparency and accountability for NHF collections. The platform prevented the flagrant violation of the NHF Act and unlawful practices by employers, who fail to effect statutory deductions, remit deductions to the FMBN or provide remittance schedules by which contributors’ monies are easily misappropriated.
Kumo also said the FMBN was advancing concessionary mortgages to NHF contributors at six per cent interest rate in line with government’s directive for a single-digit interest rate regime under Mr. President’s programme of easy access and cheap housing finance to low-income earners.

Concessionary Mortgages
He said: “As a further step, FMBN is advancing concessionary mortgages to NHF contributors at 6 per cent interest rate in line with government’s directive for a single-digit interest rate regime under Mr. President’s programme of easy access and cheap housing finance to low-income earners. Regarding this estate, FMBN has approved mortgage loans to 171 NHF contributors to the tune of N1.4 billion, out of which about 20 beneficiaries are occupying their houses as we speak. Mortgage loans for the remaining 99 units are being processed and would be concluded shortly.”

Kumo expressed delight that the NHF e-Card being launched was a huge step forward in delivering the advantages of speed, accuracy, transparency, accountability and superior customer experiences to NHF contributors.
The NHF e-Card serves dual purposes. Firstly, it serves as an Identification Card (ID) as it carries the name, participation number and passport photograph of every registered contributor. Secondly, it enables a contributor access record of his/her contributions using any of the IT channels such as ATMs, Point-of-Sale (POS) terminals and the internet.
By using the NHF e-Collection Platform web portal, a contributor can review his/her record of contributions online and print out a statement of account at a computer workstation from anywhere in the world.

In addition, contributors can use the NHF e-Card as an e-Purse that can be loaded with extra cash to make purchases via POS terminals or online. The portion of funds being NHF contributions will however not be available for spending.
“Regarding this estate, FMBN has approved mortgage loans to 171 NHF contributors to the tune of N1.4 billion, out of which about 20 beneficiaries are occupying their houses as we speak. Mortgage loans for the remaining 99 units are being processed and would be concluded shortly,” he added.

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