Dissecting FMBN’s plan for affordable mortgage

The Federal Mortgage Bank of Nigeria (FMBN) is one of the development finance institutions established to provide affordable housing through mortgage for Nigerians. Daily Trust analyses the plan of the new leadership of the bank in achieving this mandate. Access to affordable housing by ordinary Nigerians have been a perennial issue in the country owing […]

The Federal Mortgage Bank of Nigeria (FMBN) is one of the development finance institutions established to provide affordable housing through mortgage for Nigerians. Daily Trust analyses the plan of the new leadership of the bank in achieving this mandate.

Access to affordable housing by ordinary Nigerians have been a perennial issue in the country owing to high lending rates by commercial banks and other economic factors.

Already, a study by PWC, show that about 75 per cent of the 42 million housing units in Nigeria are substandard, which is about 31.6 million houses.

Also, available data show that Nigeria has an estimated 28 million housing deficit as of 2023, indicating that the country needs at least 28 million housing units to provide adequately for the population.

• NIGERIA DAILY: What To Expect From President Tinubu’s Independence Day Speech
• FG’s earning from crude oil sales drops by 79% in 2023

This means that an estimated sum of N21 trillion is required to provide housing units to fill the deficit, even as industry players say the investments may take longer.

These challenges underscore the need for a development finance institution that will guarantee affordable and accessible housing for Nigerians. Daily Trust assesses the plans of the bank to that regard.

Affordable housing for Nigerians

The FMBN in its strategic plans highlighted its resolve to provide housing to Nigerians across 36 states of the country through its Home Renovation Loan scheme

In May this year, the bank was in Kano State where the managing director handed over cheques worth a total of N236.9 million to 299 Kano State civil servants as Home Renovation Loan beneficiaries.

Also, checks by Daily Trust show that results released by the bank revealed that a total of N9.92 billion was disbursed as loans between January and March 2024, bringing the total loan amount so far disbursed by the bank to N435.794 billion.

Within the same quarter, a total of 12,915 beneficiaries who have retired from active service received their NHF Refunds totaling N4.428 billion, out of which nearly 50% (N2.024 billion for 6,528 retirees) was disbursed in March 2024 alone.

Subsequently, the bank, in support of the federal government’s Renewed Hope Cities and Estate Programme, is providing N100 billion in Off-taker guarantee for the project, as well as committing to provide mortgage loans and Rent-to-Own facilities to qualified contributors to access the homes.

Diaspora mortgage loan

Further analysis by Daily Trust show that the bank has commenced the Diaspora Mortgage Loan Product, an initiative of the current minister of Housing and Urban Development when he served as chief executive of FMBN, as it has mapped out modalities for its implementation in partnership with Nigeria in Diaspora Commission NiDCOM and the Central Bank of Nigeria.

The product is specifically designed for Nigerians living abroad to be a part of the National Housing Fund (NHF) Scheme. By contributing to the scheme consistently for a period of at least six months, a Diasporan subscriber qualifies for a mortgage loan of up to N50 million at a competitive interest rate of 9% per annum.

The Rental Assistance Loan

The Rental Assistance Loan Product is an innovative product created by the Osidi-led management to cater to the bulk of the Nigerian population who still live in rented apartments.

Daily Trust understand that the bank is introducing the Rental product to assist contributors to the scheme with payment of the rent to the tune of N2 million annually, depending on the income of the beneficiary. The product is specifically meant for members of the informal sector and repayment can be done monthly but must be completed within one year from disbursement.

Partnership with devt finance agencies

The FMBN also recently announced that the bank has commenced engagements with the Board and Management of Shelter Afrique Development Bank to fastrack affordable housing construction for Nigerians.

It also announced that recently, the Kano State government committed to the resumption of the National Housing Fund (NHF) Scheme after two decades of abandoning the scheme. This came about following strategic engagements by the bank’s new management and Kano State Advisory Committee on Participation of the state’s Civil Servants in the NHF Scheme.

Similarly, it added that it has commenced engagements with the Nigerians in Diaspora Commission (NiDCOM), which is aimed at providing housing opportunities for Nigerians outside the shores of the country

Task before FMBN achievable – Expert

Sharing his perspective on the current task before FMBN, Richard Imhoagene, housing analyst noted that the task before the FMBN led by Shehu Osidi is achievable with commitment adding that “The bank has already inaugurated the Housing Institutions Reform Task Team and the Multi-Agency Project Delivery Task Team, two of the four (4) Reform Task Teams set up by the Federal Government to help develop frameworks for the implementation of the broad plans of the Ministry of Housing and Urban Development Ministry.

Speaking on the 7-point agenda of the new management team; he said “The items, which include Deepening Process Automation, Promoting Cost Efficiency, Enhancing Credit Quality/ Reducing Non-Performing Loans, Effective Project Management, Expanding Strategic Partnerships, Enthroning a Robust Organisational/Employee Performance Management System and Standardised Capacity Building/Talent Management is targeted at streamlining processes and enhance the delivery of housing solutions to Nigerians,”

He however noted that the agenda can achieved “With commitment to innovation and collaboration with both public and private sector players”