Stakeholders identify obstacles to mortgage refinancing

In attendance were members of the Real Estate Developers Association of Nigeria (REDAN), professional bodies, property lawyers, state governors and officials of partnering ministries and agencies.   Dr. Ngozi Okonjo-Iweala, Coordinating Minister for the Economy/Minister of Finance who supervised the meeting, described the stakeholders’ meeting as a milestone in this administration’s efforts to ensure affordable housing […]

In attendance were members of the Real Estate Developers Association of Nigeria (REDAN), professional bodies, property lawyers, state governors and officials of partnering ministries and agencies.   
Dr. Ngozi Okonjo-Iweala, Coordinating Minister for the Economy/Minister of Finance who supervised the meeting, described the stakeholders’ meeting as a milestone in this administration’s efforts to ensure affordable housing for all Nigerians, adding that housing sector has important multiplier effects, creating mass employment in the construction and building industry in addition to increased employment in other related industries.
“I want us to leave here today having pledged to jump start the program with at least 10,000 new house owners or mortgage beneficiaries by the end of the year.  With the ratio of 5 direct and 2.5 indirect jobs created per house, this should enable us to create at least 75,000 jobs as a start. Today, we should hear from different stakeholders – the states, the developers, the primary mortgage institutions on how we can make this happen.
 “In a bid to ensure that all Nigerians own or have access to decent, safe and sanitary housing in healthy environments with infrastructural services at affordable cost with secure tenure, the federal government is also looking to ways and means of more strategic partnership with the private sector to develop mass housing. This scheme seeks to improve the living standards of Nigerians while unlocking benefits to the economy in wealth creation and employment.”
Also speaking, Minister of Lands, Housing and Urban Development, Mrs Akon Eyakenyi expressed optimism that effective take-off of NMRC later in the year will broaden access to housing finance and will improve the rate of home ownership in Nigeria.
She urged the governors of the 14 pilot states to strive to enhance the operations of the company in their respective states by fulfilling their obligations within the frame work of shared responsibilities proposed at the kick-off meeting held in August, 2013.
She said government cannot achieve the aim of broadening access to housing finance if land titling, property registration and transfers and several other issues on land administration and management are not effectively addressed.

Stakeholders’ reactions
In the course of meeting, a real estate developer complained bitterly of various charges that run into millions of naira usually charged by different departments of government before they could have their buildings approved. He said this is a major impediment to affordable housing. He argued that developers can only sell at the rate they build.
A female developer also complained of land allocation in some states. She said sometimes, land allocated is far from infrastructure hence they remain unoccupied even after being developed.
A civil servant called for provision of housing loans to civil servants without involving any estate developer. “As a civil servant, if you give me N3 million now, I can build myself a house and then deductions can be done through my salary. My salary can serve as collateral, it’s as simple as that,” he said.  “If government can subsidize fuel, why not housing? Because housing is one of the primary needs of man,” he stated.
 
Expectations
Many spoke to Daily Trust on their expectations on the NMRC scheme. Harry Akoje, an estate consultant said, “Basically, I think this is an important event. There is much more improvement from what we used to have. I hope   stakeholders will be able to discuss and then come up with a very reliable solution to reduce the 17 million housing deficit that we are talking about. We are hoping that at the end of today`s meeting, stakeholders should be able to give away forward in the provision of mortgage.
“The reason people cannot really have access to housing is we find it very difficult to tell who can afford what kind of house. In my own organization we profile people. We look at how much you earn based on the kind of job that you do and then we are able to certify based on the information we got. I think it is a doable thing.”      
 Bisi Ogunjobi – Chairman Federal Mortgage Bank said, “In all the states, if we don’t have a title to a property there is no way it can be turned into asset to refinance the bank. If you talk of mortgage it is an individual personal title related to a property.  So unless we have a system that allows each person, each house to have a title it becomes very difficult for the PMI and for the FMBN to be able to create a mortgage.  
“Once we cannot create a mortgage it means we cannot even refinance the mortgage. Today, only very few of them have the capacity to create mortgage. If you look at a lot of them, the portfolio which is on mortgage is very limited. Once that is done every other aspect can be easily handled, particularly with the reform that is going on in the FMBN in terms of computerization,  in terms of the e-platform  which  have been introduced whereby if you are a contributor of NHF you can access your account and know exactly what you are contributing.
“At a stage when your contributions come to the account then you have an alert. But some of the problems in the past still exist, in that some people paid and they are not remitted to the FMBN. So the FMBN is not in position to identify who and who have actually made that list. At the end of the day, there is confusion and people believe that they are not getting value for their money. It is not the number of the mortgage banks that matters but the effectiveness and capacity of these mortgage banks to deliver in providing mortgage.”
Kabir Yari was UN Habitat representative. He said, “Government has now started to go into mortgage financing and there is a company that has been launched so they want to now listen to stakeholders particularly the state governments, the developers and those who are really involved to understand the processes and to agree on the way forward.
“Mortgage is only one component. Housing has about seven components: talking of building materials, land, infrastructure, there are so many of them that are part of the building industry. If they cannot access land, how will they build houses? If you are allocating land for housing, locate it near jobs, because housing is not in isolation in itself. Housing is related to so many other economic activities. It is related to school, place of work, place of worship etc.”
Fourteen pilot states have been earmarked for the program. Governors of the states had agreed to provide and fast-track land titles, foreclosure arrangements and service plots.
 The company will help to create more than 200,000 mortgages in the next five years at affordable interest rates. Okonjo-Iweal said that the World Bank had already bought into the emerging refinance institution with a soft loan of $300 million under the bank’s International Development Association (IDA) concessionary lending window.