• Wednesday, 15th May, 2024

FG, Private Sector Begin My Own Home Scheme Housing Finance

Business | 7 years ago
 
The Federal Government has started its ‘My Own Home Scheme, a private sector–driven housing finance that is designed to give every Nigerian access to home ownership. The mortgage system is unique to the country and the required long-term finance is from the Central Bank with regulation by the Nigeria Mortgage Refinance Company (NMRC). Both play a key catalytic role that is intended to spur a sustainable housing finance market that is owned by the private sector through pre-qualified Primary Mortgage Banks and Microfinance Institutions. Bennett Oghiforeports
 
The My Own Home Scheme is designed to be simple and accessible by every Nigerian who desires to own a home and, because it is private sector-driven, it is expected to outlive political administrations.
The point is that it is not like previous housing finance initiatives of government, since the government’s role is limited to the provision of long-term funding through the Central Bank of Nigeria and by the regulation/support system that the Nigeria Mortgage Refinance Company (NMRC) would provide to ensure that the Primary Mortgage Banks remained liquid, when they are low on cash, so that they can finance more loan requests.
Nigeria Housing Finance Programme…
The ‘My Own Home’ scheme is part of the Nigeria Housing Finance Programme (NHFP). But, unlike previous housing initiatives of government, “the NHFP is not designed to solve the housing problem by giving you homes. So, there is no supply of houses waiting anywhere; there are no houses being built to sell to people anywhere,” said Mrs. Adenike Fasanya – Osilaja, Housing/Mortgage Finance Consultant, Nigeria Housing Finance Programme, (NHFP), Central Bank of Nigeria, during a press briefing in Lagos, recently.
She explained that it was a catalytic programme to jump-start the housing market and that it would be taken over by the banks once it began. The CBN would give the banks capacity to disburse loans to home seekers. “Once we start and we assist the banks with getting the programme set up, it is going to be handed over to them; it is already handed over to them,” she said, noting the presence of the President of the Mortgage Bankers Association of Nigeria, Mr. Adeniyi Akinlusi and microfinance institutions, at the press conference, held at Tejuosho ultra-modern Market in Yaba, Lagos.
How it works…
Whoever can pay the rent for his living accommodation, can buy a home under the ‘My Own Home Scheme’, said Mrs. Adenike Fasanya – Osilaja. “Anybody over the age of 21, which is the age that you can sign a legal contract is entitled, not necessarily to a home, but knowledge about whether they can get a loan or not and what they can get. We do not dictate where they must live or what they must buy. All we are saying is cut your coat according to your cloth.”
The industry, she said would drive the programme, “because when industry is not part of a programme, it may work but it will not be sustainable, because you cannot give money for ever, it will run out one day.
“But when the industry is involved, and they are revolving that money- that is the job of the Nigeria Mortgage Refinance Company- So, when, for instance, Trust Bond Mortgage has N100 million to spend, when they spend N70 million and they get a little worried about the rest of their money, they would go to NMRC and say we have N70 million in loan and we want you to buy it and give us that N70 million back so we can put it in the market to go back to our N100 million base to give out more loans.”
The Nigeria Housing Finance Programme, she said has four components- Refinance products, which is banker to the bank; mortgage guarantee insurance product- loan seekers are, prior to this programme, expected to deposit 20 per cent as their own equity to buy a house, but this product helps the borrower to deposit as low as 5 per cent. “The guaranty insurance will give insurance to your bank that if you default on your loan, they will pay that 15 per cent that you didn’t give them. They are not going to pay the 100 per cent or 95 per cent, but the 15 per cent of equity you did not give, because they covered for you.”
The third component of the programme is Microfinance product for people, who, by the nature of their job, income or amount of their income, do not qualify for a mortgage loan. This product allows incremental development. The fourth component is technical assistant to support the people in the industry with training, among others to capacitate them to get the job done.
According to her, they would take the campaign across the nation. “It is not a scheme to take people’s money; it is a scheme to tell every Nigerian that needs a home to at least know what mortgage is; to at least know that it is okay and not be afraid to find out more about it; to go to their bank and ask the necessary questions. They should know that it is okay to know how much they can buy so that you don’t go and look for the house first and then be turned down by the bank because of insufficient fund. Go to the bank and microfinance company first, tell them who you are, what you do. They are trained to help you through this process and they will tell you if you can buy or not. If you can buy, they will tell you how much you can buy. They will give you a pre-approval letter, telling you that and you can take the letter to any builder, any seller, any developer and tell them this is what I am qualified for, what can you give me.
“So, if you go to the lender (Bank or Microfinance Institution) and they say you are qualified for N5 million, then you have a choice; if you go to a developer in Egbeda, Lagos, he can show you a 3-bedroom house for N5 million or you can go to a developer in Lekki and he can show you a one-bedroom house for N5 million, but they would be able to tell you what your money can buy. Knowledge is power and it would enable you make the needed transition.
“Otherwise, if you want to live in Lekki but you want a 3-bedroom house, you can say maybe the time is not right; let me wait for that promotion on my job and then I will come back. But you will be doing everything you are doing from a position of power because you have knowledge.”
Mrs. Adenike Fasanya – Osilaja’s message was reinforced by officials of the Nigeria Housing Finance Programme, Central Bank of Nigeria, Messrs Jackson Imandi and Gyang Badung; President, Mortgage Banking Association of Nigeria, Mr. Adeniyi Akinlusi, who is the Managing Director of TrustBond Mortgage Bank Plc.; Head, Risk Management, Nigeria Mortgage Refinance Company, Phyllis Uzoma; and the Managing Director, NPF Microfinance Bank Plc.
“We consider it as duty to notify every Nigerian that they have a right to find out if they can own a home; if they can own one, then how much can they buy it. One of the problems that we have noticed is that there seem to be a fear of housing finance,” she said.
This is not strange because, culturally, Nigerians do not like to take a loan, she noted but that the programme teaches the advantages of taking a housing finance loan. “Instead of building block by block for 15 years, get financing today, get a home product today, let your housing product start working for you today so that in 15 years you can sell that product and actually making money, instead of finally moving into a deteriorated home that you built for 15 years.”
Mortgage Banks…
The mortgage banks welcome the Nigeria Mortgage Finance Programme, said the President, Mortgage Banking Association of Nigeria, Mr. Adeniyi Akinlusi, who is the Managing Director of TrustBond Mortgage Bank Plc.
Akinlusi said, “The first step is go to the bank but go with open hands- who must come to equity must come with clean hands- open up, state your source of  income, because the bank is interested in the fact that you are able to repay the loan you are given.”
He said some of the banks, like Trust Bond Plc., have invested in the NMRC and that they were confident that the system would work.
 

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