FMBN, REDAN Sign $2bn MoU to Provide Affordable Houses

The Federal Mortgage Bank of Nigeria (FMBN), Shelter Afrique and Real Estate Developers Association of Nigeria (REDAN), have signed a $2 billion Memorandum of  Understanding to provide affordable housing for Nigerians.

New Telegraph reports that Mr. Richard Esin, the Acting Managing Director of FMBN, said the  MoU was the first critical journey aimed at providing affordable housing for Nigerians. The managing director added that the move was in line with the Federal Government’s agenda to encourage home ownership in the sector.

Signing the MoU yesterday in Abuja, Esin said the bank had been able to create 734 mortgages using about N5.4 billion. He said that the FMBN, Shelter Afrique and REDAN met to explore the opportunity that would come with the launch of the National Housing Model.

“In the meeting, we agreed that we needed to bring in Shelter Afrique to work in partnership with the Real Estate De-velopers Association of Nigeria to make available some funds over the next 10 years to give impetus to the national housing model; by providing other members with the necessary construction finance that will be required to drive the national housing model,” he said.

The acting director said that the FCMB has agreed on the housing design and pricing, adding that it would be their responsibility to give confidence, by committing to providing the mortgage financing required.

He said that they have the understanding that the Nigerian market would not require anything less than $200 million annually over the next 10 years for this purpose. “With $200 million annually into construction finance, I am sure we can generate up to 8,000 to 10,000 housing units annually,” he said. Esin said that this scheme would create job opportunities, adding that at least 150 jobs would be generated in the activity.

According to New Telegraph, the President, REDAN, Mr. Ugochukwu Chime, said that one of the covenant of the MoU was an opportunity to get the stock market and regular format that would enable the use of naira instead of dollar “One of the covenant of the MoU being signed was an opportunity to get the stock market and regular format that will enable us to have a naira denominated facility Shelter Afrique rather than the dollar facility,” he said.

He said that the MoU would promote team work, adding that it was impossible for them in REDAN to move forward without considering the skills of all those involved in housing sector. Chime said that they have met with many artisans to see how they could contribute their quota in the delivery of affordable housing, adding that many artisans were currently undergoing training.

He called for the total recapitalisation of the FMBN, adding that over the years, FMBN has been limited in their ability to deliver in their mandate because of poor capitalisation. Also speaking, the Managing Director, Company for Habitat and Housing in Africa (Shelter Afrique), Mr. James Mugerwa, said that the MoU would herald a new chapter in Nigeria’s housing sector.

He said that the MoU also heralds provision of end-to-end solutions to the housing demand and supply challenges currently facing the country. He said that the MoU paves the way for Shelter Afrique to renew its support to members of REDAN on the supply side of the housing chain.

According to him, with a supply backlog estimated at over 17 million housing units, Nigeria, like other African countries, requires significant investments in the housing sector.

“With more than three decades of involvement in the housing sector across Africa, Shelter Afrique is uniquely positioned to partner with REDAN and FMBN in designing and providing housing and construction finance solutions to support provision of decent and affordable housing to a wider crosssection of the Nigerian population,” he said.

He said that it was the aspiration of Shelter Afrique that all the parties involved would commit and dedicate all their expertise and resources to ensure that good quality housing and affordability remains two key considerations in all collaboration opportunity.

Source: New Telegraph