FG to Review Housing Fund, Recapitalise FMBN to Boost Mortgage

The Federal Government is to review the National Housing Fund (NHF) and also recapitalise the Federal Mortgage Bank of Nigeria (FMBN) in order to boost access to mortgage for Nigerians.

Minister of Power, Housing and Urban Development, Babatunde Fashola, disclosed this in Abuja at the National Summit on Affordable Housing.

He said that government plans to embrace new technologies, by developing quicker methods of building, adding that government would adopt the use of foam-work technology which allows blocks of flat in eight weeks and bungalows in about four weeks.

Also, the Federal Government has reformed the Pension Laws to allow off-takers use part of their pension to secure mortgages

He noted that these measures would help in reducing the deficit in the country, which is put at over 17 million.

Fashola observed that the ministry has reviewed methods for implementing the national housing policy, such as initiatives by the Federal Housing Authority and our PPP initiatives, through Development Lease Agreements (DLAs).

The minister noted that while the ministry may retain the initiatives with modifications, it must develop something new and different that is useful for reducing our housing deficit.

“This will help to diversify our economy, grow our SME and local capacity, evolve into something that is sustainable in the sense that the majority of Nigerians can benefit from, by getting them on the housing ladder, and also benefit any of them employed in the process.

He stated that internal reappraisal reveals that since inception, FHA has built about 40,000 housing units in approximately 40 years adding that DLAs and PPPs over a decade, under the Construction Finance Initiative, targets delivery of 21,008 housing units with a current delivery of 2,750 completed units so far.

Fashola further observed that the ministry’s appraisal shows different designs of houses originated by different contractors that do not necessarily meet the market needs and are therefore not attractive or affordable by the off-taking public.

He noted that with land under the control of states, the Federal Government can only do so much and would evolve design, approve the concept, support SMEs to produce materials locally and provide incentives that will enable the private sector play more actively through the capital market and other funding sources.

Fashola emphasized that our housing must be tied to our income, which must be tied to our jobs adding that this is the way to create credit that our housing industry desperately needs.

According to him, “We cannot speak of national transparency if a large number of our people pay one or two years advance rent, when they receive salaries in arrears monthly. This is one of the reasons why many houses are empty, because of the advanced payment, and not only because of the huge rate of rent”.