Capital Estate’s trouble with NHF subscribers

Managing Director, Abuja Property Development Company (APDC) Ltd. Arc Bashir Haiba said his company’s estate desired to help medium income earners using the NHF but his interactions with those who attempted to do this showed it is not an easy thing to do. The hard conditions for accessing NHF loans has led to drastic reduction […]

Managing Director, Abuja Property Development Company (APDC) Ltd. Arc Bashir Haiba said his company’s estate desired to help medium income earners using the NHF but his interactions with those who attempted to do this showed it is not an easy thing to do. The hard conditions for accessing NHF loans has led to drastic reduction in the number of up-takers earlier intended for the project.
 “We would have loved to have many NHF subscribers but we couldn’t because conditions for Federal Mortgage Bank [FMBN] loans are difficult to meet,” Haiba told Daily Trust while on tour of his site in Abuja recently.
“NHF is contributors’ money. That limits the price you can sell the house. That automatically pegs our production cost. The price they want us to sell completely wipes our entire profit particularly [for] the quality we want to do, the standard we want to do. Our philosophy is APDC is associated with quality. People who come to us get value for money,” Haiba explained.
“At the very beginning, we thought we could get rush of NHF subscribers. But the situation as we have now, NHF subscribers don’t constitute up to one-third of our customers. Why? The procedure of accessing NHF…the developer goes through so many hurdles of conditionalities before the loan is approved.
“Even when the loan is approved, to get the money into your hands is a different story. What they say in theory is different from what’s practised from our experience,” he said.
The Managing Director is not comfortable with numerous factors that limit a subscriber’s chances of accessing FMBN loan. Among these considerations are a subscriber’s affordability range, how many more years have they before they retire and how many more years to service the loan. Those who have spent a lot of years in service are regarded as risky customers because they don’t have many years to service the loan.
Apart from these, government gives a maximum of N15 million for a house. That obviously has to be a flat or a bungalow whereas, many developers are with inclination to build high end houses like duplex.
Of course, the Primary Mortgage Institutions (PMIs) that play middleman role in the scheme are also a problem just as many other factors. Haiba said,  “Quite a number of PMIs they go through need to be up and doing – they need to midwife, package these loans and help the uptaker to access them at the Federal Mortgage Bank and the developer to exit the facility that they have got, I think much needs be done.
“Then the conditionalities. The uptaker has to pay certain equity which amounts to certain percentage of the loan that they’re going to get. The cost of the house might not be equivalent to what the Federal Mortgage Bank is going to give.   
“Documentation is a big problem. The Federal Mortgage Bank itself suffers huge limitation. It is the only source of mortgage loan apart from the mortgage refinance scheme launched last year,” said Haiba.
Another developer, Ugochukwu Chime told Daily Trust that effort that could have been made to improve the policies/laws, processes and funding for the FMBN have been neglected by successive governments in Nigeria because NHF is seen as the poor man’s housing problem.
Conversely, FMBN Managing Director, Mr Gimba Ya’u Kumo insisted that notwithstanding its limitations, the apex mortgage bank has delivered about 53,000 houses through the NHF. He argued that the bank has launched a housing scheme for the informal sector. This and other initiatives, have set the industry on a new pedestal.
About APDC Capital Estate
The project started in 2012 with acquisition of land. In 2013 Phase I started with design for 600 houses. Construction of the estate sitting on 50.2 hectares of land started in 2013. Site is close to Idu-Kubwa railway and only 100 metres away from the 10-lane Kubwa expressway.
Haiba explained the initial challenges: “It was a daunting task. First, we had this big problem of compensation. We were simply asked to go commercial. Nobody gave us one damn cent for the take off of this project. We had to raise funds to pay for compensation and you know the cashew phenomenon. We had to pay compensation for the entire 50.2 hectares. We had to pay for land clearance. We had to pay the consultants to do the designs. For the building plan approval, we had to pay N35 million. But the development control was kind enough to allow us to pay in installments.”
But why would government give a developer an encumbered land? Haiba said because the amount of money needed to pay compensation was heavy and government’s resettlement process is tardy, any developer who waits might wait for too long. “The fact of the matter on ground is that developers usually liaise with the Department of Resettlement and Compensation, go through that department, pay compensation and then send bills to government for necessary action. It makes sense to liaise with the Department of Resettlement and Compensation, pay so that your project takes off otherwise it will take much longer period and you know time is money,” he explained.
Facilities
The Phase 1 of the estate has internal roads network of 1.5km. All concrete and drainage works are done. What is left is laying of asphalt on the roads. The road width is in line with standard specified by the engineering department of the Federal Capital Development Authority (FCDA). Electricity tapped from the public source is already in use. Water is constant.
American steel doors are fixed. All bedrooms are ensuite. The living room has convenience. The two-bedroom block has kitchen, a small store and service staircase. For each of the flats, there are at least two-car-park dedicated parking plot.
The one-bedroom is in a block of flats comprising three floors on 105sqm. There are 28 units per block. It sells for N5.9 million. The two-bedroom is two types: Type A is N10.7 million. Type B sells for N11.8 million. Three-bedroom goes for N14.85 million.
The terrace is for medium cost. There is three-bedroom terrace without boys’ quarters that is sold for N22.9 million. There is three-bedroom terrace with boys’ quarters. Each has dedicated car parking lot for four vehicles.
Haiba said in the estate, the space between one building and another is much, the tiles and doors are great, ventilation is assured and the width of the road is standard and drainage is high quality.
Bungalows are not constructed in this phase. According the head of design unit of APDC, Mrs Felicia Baba, this is in order to maximize space for infrastructure. Buildings are well spaced – 12 metres minimum.
Payment process
Acquisition process starts with filling of forms. On submission of forms, one is given offer letter in case of NHF subscribers to approach a PMI. Upon getting the loan, those who opt for a house which value is higher than what the bank paid for, the uptaker pays the difference.
Those who want to pay directly can do so. There is also the self-developer category. Associations, unions come as group. They are given the buildings at DPC level to complete with strict supervision. The Nigeria Medical Association (NMA) has bought four blocks at substructure level. They have built and roofed them. The advantage here is the uptaker has freedom to add aesthetic as they want.
There is the option of taking carcass for those who want to do the finishing of inside to their taste. Here, the building with roof is plastered outside, with outside windows and doors, electrical cables and left for the uptaker to do the internal works. Payment can run for a year or year-and-a-half. Allocation letters are issued.
It is said that those promised houses by President Goodluck Jonathan during the national honours award ceremony in Abuja last year may be given houses in this estate.