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Tag: FMBN

  • Nigeria’s real estate market value hits N59tr, says FMBN chief

    Nigeria’s real estate market value hits N59tr, says FMBN chief

    The real estate market in Nigeria is growing substantially with a current value put at N59 trillion, which is potentially six times bigger than the local stock market now valued at N12 trillion, the Managing Director/Chief Executive Officer, Federal Mortgage Bank of Nigeria (FMBN), Mr. Gimba Ya’u Kumo, has said.

    Kumo, who spoke to The Nation, said despite growth in the real estate sector, the mortgage industry is not growing as expected, contributing less than one per cent to the nation’s Gross Domestic Product (GDP). To drive the growth of the mortgage industry, Kumo said FMBN’s management is working on strategies to boost it.

    According to him,  out  of 170 million people, less than one per cent contributes to the National Housing Fund (NHF), which is targeted at deepening the mortgage industry.

    The development, he said, is not good enough  hence, FMBN’s management desire to grow the industry’s contribution to GDP to 15 per cent by reaching the other segments of the population.

    He said: “The total value of the real estate market in Nigeria is put at N59trillion and that is potentially six times bigger than the local stock market, which is now valued at N12 trillion. On this basis, the sector cannot be ignored.”

    According to him, the figure was arrived at by multiplying the housing deficit in the country, which is estimated to be 17 million units; and N3.5 million, which is the estimated cost of a single housing unit. He expressed  optimism that the deficit would be addressed.

    “I am, however, optimistic that with the coming on stream of the Mortgage Utility Refinancing Company, the housing sector would experience a revival that would attract investments to the sector and boost the economy,” he added.

    Kumo said FMBN is working out modalities to roll out a Diaspora product to assist Nigerians living abroad to own homes in the country. “The product has become necessary given the large number of Nigerians in Diaspora who wish to own homes back home and also as a means of reducing the housing deficit in the country,” he added.

    He continued: “We realised that about 17million Nigerians are living outside the country and most of them have plans to have houses and they have not been able to do so. We understand that over the years, people have been remitting money for building or buying of a house and they have not been getting good results.

    “What we are trying to do is that by the time we develop the Diaspora mortgage model, it will be a model whereby Nigerians living abroad, who want to buy houses can resort to FMBN and at the end of the day if they do not take the mortgage, they can get refund of their money with interest. The reason the bank has chosen the United States as takeoff point is because out of the 17million Nigerians all over the world, America has about 58 per cent. We will do our case study here and in the UK. If it works well, we will try to replicate it in Asia and other parts of the world.”

    The move, he said, “would also lead to the inflow of finance from the Diaspora to Nigeria, which would further assist to reduce the housing needs in the country. The target of Diaspora is because the inflow of Diaspora money to Nigeria is about $10billion.”

    “If the housing sector takes about 25 per cent of that inflow, we are expecting that about $2.5billion will come to us in form of inflow from Diapora people who would need houses and investments in the housing sector.

    “That would translate to about N4billion and with that we can fund mortgages and build about 30,000 units and that would be an opportunity for those who would want to have houses in Nigeria. That is within the envelope that we are allowed to operate, which is N15million or $90,000.”

  • FMBN boosts housing delivery in Enugu

    FMBN boosts housing delivery in Enugu

    The desire to tackle headlong, the challenge of an estimated 17 million housing deficit currently facing the country appears to be the new driving force behind the renewed vigour of mortgage institutions, federal and state governments across the country. From the LagosHOMS scheme, a housing initiative of the Lagos State government, to the Home Charter initiative of the Ogun State government and several others across the country, the frenzy has assumed a higher pitch.

    For instance, the initiative of the Federal Government to set up the Nigerian Mortgage Refinance Commission (NMRC) has brought brighter hope of more housing opportunities for Nigerians. The Minister of Finance, Dr Ngozi Okonjo-Iweala, at a stakeholders meeting in Abuja earlier in the year, said 10,000 Nigerians would own houses in the year through the NMRC. This optimism is buoyed by the World Bank’s $25 million (N4.1 billion) support for this mass housing initiative.

    But even as Nigerians patiently await the commencement of the NMRC initiative meant to have taken off on June 30, the country’s primary mortgage financial institution, the Federal Mortgage Bank of Nigeria (FMBN), is leaving no stone unturned in ensuring that mass housing for all is achieved. The recent inauguration of a 324-housing unit in Elm estate, Enugu, is a further testimony to this. The Elim Estate project, though developed by NBP Projects Limited, a firm of private property developers, it was fully financed by the FMBN through a construction loan it granted the developer. The FMBN gets its funding through the contributions generated from the National Housing Fund (NHF) scheme, which comprises mainly  2.5 per cent contributions from the monthly income of workers.

    Elim estate comprises 128 units of one bedroom terrace units, and sells for N3.5 million each; 32 units of two-bedroom terrace units at the cost of N4.5million each; 89 units of two-bedroom blocks at the cost of N5.8million each; and 75 units of three bedroom bungalows costing N10million each. All the units are said to be delivered with good quality finishing, in addition to accompanying infrastructures of a good road network, electricity, sewage and other facilities to guarantee a comfortable and decent environment for its prospective occupant. The Estate equally has perimeter fencing, police post, tarred access roads, dedicated 500 KVA transformer, water reticulation, indoor sporting facilities and a shopping centre.

    Vice President Namadi Sambo, at the inauguration of the Elim Estate, which is the latest effort of the FMBN, reiterated govern-ment’s commitment to the housing sector. He noted that the housing sector is vital to the socio economic development of any nation because it constitutes an important element of job and wealth creation. Sambo, obviously impressed by the composition of houses in the estate, praised the FMBN and the developer for ensuring that the scheme catered for affordability issues of individuals with its offering of one bedroom, two bedroom, three bedroom units, and at affordable prices to both low and medium income earners.

    “This inauguration signifies the usefulness of synergy and corporation between government and the private sector. It underscores the effectiveness of the NHF as a veritable source of long term funding and justifies the need to strengthen the scheme through the recapitalisation of FMBN,” Sambo said, even as he expressed confidence that the NMRC which was launched last year, will bridge the cost of residential mortgages, stimulate availability of good houses to Nigerians and reduce affordability and gaps to finance.

    The Managing Director of FMBN, Gimba Ya’u Kumo, also used the occasion to assure Nigerians of a better tomorrow concerning their housing needs. He said that the FMBN, in line with its mandate to provide affordable housing to Nigerians, has started the process of ensuring that participants on the NHF scheme had access to mortgage loans across the country.

    Specifically, he said NHF participants and applicants to the scheme in Enugu are to be supported to buy houses in the Elim Estate scheme and others that would be developed.

    He assured that low and medium income earners who qualify to own houses based on being regular contributors to the NHF scheme will benefit from a six per cent interest mortgage loan, which is repayable over a 30-year period. This is in line with the mandate of the FMBN which includes ensuring that Nigerians have access to cheap funding to owning their own houses.

  • Why housing-for-all remains elusive, by FMBN chief

    Why housing-for-all remains elusive, by FMBN chief

    Affordable housing may remain elusive unless the Land Use Act and other impediments to housing, such as cost of property titles, are removed, the Chairman of Federal Mortgage Bank of Nigeria (FMBN), Chief Bisi Ogunjobi, has said.

    He explained that the mortgage institution may have tried its best, but has not met the yearnings of the majority due to certain constraints that are related to the economy and the mortgage system.

    Ogunjobi said obtaining ownership documents, such as the certificate of occupancy (C of O), remains a  problem which must be tackled. Besides, the cost of getting such titles is too high.

    “It takes quite a long time to get the title to a property like the C of O, which takes three to four years or more. In Lagos State, to have the governor’s consent, which is compulsory in all states, might cost you as much as 20-25 per cent of the cost of the land,” Ogunjobi said, adding that not only are these impediments to having a housing system, but also they make it imperative that there is a need to revise and update the Land Use Act to make it more user friendly.

    When this is accomplished, bottlenecks to people having access and title to land would have become a thing of the past.

    But this is not the only bane to affordable housing in the country. Stakeholders in the sector said  there is a need to have a mortgage system, which encourages a longer time period to buy and pay for houses, say for a 20-30-year tenor and at single digit interest rate. This is the practice in other developed countries. The FMBN chief agrees with this position, saying that long term funds is required for this type of regime to be put in place. But he regrets that this is not easily available because institutional investors such as the operators of the Pension Funds, have not really been very active in the mortgage or housing sector, blaming their seeming inactivity on the restriction of the amount of their resources which they can invest in such projects.

    The issue of foreclosure is another problem that needs to be addressed in the industry. Stakeholders are of the opinion that foreclosure in Nigeria is not favourable because of the delay in getting debts sorted out. “The attitude of Nigerian businessmen not paying back their loans is also a disservice to mortgage in the country. Somebody is owing you and you have no opportunity to take over possession of the property,”  Ogunjobi explained.

    Though the cost of building a house is still high, experts said it should not be so. Noting that a typical house has less than 40 per cent of local materials, they canvassed the use of local materials in the industry, which they reasoned is a key element to bringing down costs.

    Ogunjobi disclosed that the FMBN will soon look at its books, considering that the developers that are owing the mortgage institution are many, adding that this has led to a portfolio of non-performing loans – a development that has become a problem.

    He contended that these are some of the impediments that have impacted on the functions of the PMIs or the FMBN and their ability to function efficiently.

    However, all hope is not lost, he added. With increased capitalisation, the FMBN, through the PMIs, can take on bigger projects and the institutions will be stronger and more robust in fulfilling their mandate.

    They will also be in a position to assist more customers to achieve more; they will also be able to deploy more of their resources in developing the industry. To effectively achieve this will also require that more people are brought into the National Housing Fund (NHF) ambit as contributors, which will enable them to benefit from the FMBN and support the construction of houses for those who contribute to the NHF.

    “At the moment, we have been supporting the developers to be able to build houses, and if we have adequate recapitalisation then our ability to support those programmes becomes much more viable,” Ogunjobi he added.

  • FMBN to deliver on mandate

    The Federal Mortgage Bank of Nigeria, (FMBN) has assured Nigerians that it will endeavour to deliver on its mandate of providing quality and affordable housing to Nigerians so as to bridge the 16million units housing gap in the country.

    Its Chairman, Chief Bisi Ogunjobi, made the declaration at the conferment of  Award for Excellence in Leadership and Entrepreneurship on the managing Director of the bank, Gimba Ya’U Kumo by the Arewa Youth Forum (AYF) in Abuja, yesterday.

    Egunjobi said the board and management of the bank have been trying its best to change the perspective Nigerians have of the bank by putting actions and policies in place that have impacted on its ability to deliver on its mandate.

  • Housing fund hits N118.8b

    Housing fund hits N118.8b

    In those years, contributions to the National Housing Fund (NHF) rose by N66.8billion, bringing the total amount realised since its inception 21 years ago to N118.8 billion.

    The Board of the Federal Mortgage Bank of Nigeria (FMBN), shot up the contribution within three years of its inauguration in 2010. The funds’ monthly average collection also rose by 174 per cent from N730, 000 to over N2 million on the average.

    Explaining the leap in fortune of the fund, Dauda Yusuf, the Head, Corporate Affairs, said the management adopted measures to improve the operational efficiency and service delivery of the organisation, deploying strategies that were aimed at strengthening and putting check and control on the activities of the bank.

    He said the bank partnered critical stakeholders to achieve operational profitability.

    Giving further insight into the feat recorded so far, Yusuf disclosed that the FMBN has also re-financed mortgages to the tune of over N32 billion for 13,750 buyers of non-essential residential Federal Government houses sold in the FCT. This was done through a mortgage-backed bond it put in place in collaboration with the Federal Ministry of Finance for workers in Federal Capital Territory (FCT), which is aimed at making them house owners. Also, N28.3 billion and N19.7 billion were disbursed as estate development and mortgage loans in 34 months, an amount that translates to 45 per cent and 46 per cent of the cumulative loans of N64.2 billion and N45.1 billion.

    Only recently, FMBN began a housing cooperative scheme known as Cooperative Housing Finance to integrate workers in the informal sector to contribute to the NHF. The scheme is part of the government’s efforts to improve access to effective mortgage for middle and low income earners, particularly those not employed in the civil service or employed in the formal sector.

    Under the scheme, individual and professional cooperative societies can have access to the resources of the mortgage institution when they come together as a team. The cooperative will own the land, the estate, while the FMBN will provide the global title, then the individual titles will be provided by the cooperative members. With this, the bank hopes it would be promoting a more effective and efficient affordable housing delivery in the country.

    Players in the housing sector have recommended the enforcement of a law that would make contributions to the National Housing Fund (NHF) mandatory. The law, if implemented, would help to reposition the Federal Mortgage Bank of Nigeria (FMBN) to help deliver effective mortgage plans to workers, while also calling for the vigorous pursuit of the N200 billion Federal Government’s intervention fund for housing.

    Also, to enhance affordable housing in the country, a mortgage refinancing company was inaugurted last month to cater for mortgage needs of high income earners, and a “rent-to-own” project, which creates room for tenants to own a home after renting for some time is also underway.

    With this development, Mohammed Musa Sada, the supervising Minister of Lands, Housing and Urban Development, reckons that the engagement of the mortgage refinancing company would make the FMBN focus more on providing mortgage for low and middle income earners, including workers in the informal sector.

    “We are already working out the modalities and we hope that before the end of the year we would have worked it out properly,” he said.

    The National Housing Fund, which was established by Decree 3 of 1992 to facilitate the continuous flow of low-cost funds for long-term investment in housing for the benefit of workers has been plagued by some challenges, one of which is the non-remittance of contributions and also non- participation of some states in the scheme.

    Over the years, some states have stayed off the scheme, as only 28 states are contributors.

  • TUC, FMBN partner on 3.5m housing scheme

    The Trade Union Congress (TUC) has said it will partner and work with Federal Mortgage Bank of Nigeria (FMBN) on the National Housing Fund (NHF) for the provision of minimum of 3.5 million housing units of various ranges for workers in the next 15 years. This will also be in collaboration with the Nigeria Labour Congress (NLC). The housing scheme has the necessary infractructure.

    In a communiqué signed by the TUC National President, Comrade Bobboi Bala Kaigama, after its National Executive Council (NEC) in Kaduna, the Congress said good and affordable shelter is a critical issue of major interest to workers, adding that there was need to provide good shelter for every worker.

    The TUC decried the situation where many workers who religiously contributed to previous housing schemes of the Federal Government did not get the houses or any refund of their contributions. The Congress was particularly bitter by the fact that most records of such contributions were not properly kept by the project operators which include both the federal and state governments.

    TUC lamented the high-cost of the houses which made the houses to be essentially beyond the reach of the average worker.

    TUC said it will give the FMBN a trial period of one year to show substantial commitment to the project, threatening to back out of the project should the bank show any sign of unseriousness.

    “That the TUC and NLC must be fully carried along from start to finish of the project. That is, from conceptualisation to planning, costing, building supervision and allocation of the houses. To this end, the TUC insists that the labour centres must be duly represented in the boards of the FMBN, NHF and other relevant bodies involved in housing projects for workers.

    “FMBN must render monthly progress reports on the project to the two labour centres and ensure that all pre-existing, present and future records of NHF contributions made by workers are duly updated and made readily and easily accessible to the contributors,” the communique read in part.

    It added that full refund of contributions plus accrued interest thereon shall be immediately made to workers who were wrongfully denied the houses under previous schemes.

    The communique noted: “That relevant portions of the law be reviewed to compel employers to be more transparent and accountable to their workers on matters relating to remission of contributions to the NHF on behalf of the workers as and when due.”

  • Ekiti eyes N800m FMBN facility

    FOURTEEN years after it pulled out of the National Housing Fund (NHF), the Ekiti State Government has held talks with the Federal Mortgage Bank of Nigeria (FMBN) on how to return to the scheme.

    The FMBN management led by its Chairman, Chief Bisi Ogunjobi, has visited the Deputy Governor, Prof Modupe Adelabu in her office in Ado-Ekiti, the state capital to reopen negotiations.

    The delegation’s mission was to sensitise the government on the benefits its participation in the NHF would bring to the state, especially in housing development.

    Such benefits include access to a N800 million loan facility already approved by the bank for Ekiti State Housing Investment Corporation.

    The deputy governor said Governor Kayode Fayemi’s administration was doing its best to make the state first-choice destination for investors, saying that good road networks and rural development are being intensified to fast-track development.

    Mrs Adelabu said government would continue to explore and harness every available opportunity to achieve its agenda on infrastructural development, which according to her, includes provision of affordable houses and estates for civil servants and other residents.

    She reiterated the administration’s resolve to deliver dividends of democracy on its Eight-Point Agenda, listing as priority the provision of social infrastructure, stable electricity supply and portable water among others, for the comfort of residents and to attract investors.

    The deputy governor described the FMBN as a veritable financial body and assured that Ekiti State would not hesitate to explore the opportunity offered by the bank for the benefit of its workforce.

    She urged the bank officials to step up enlightenment programmes to sensitise labour leaders and workers about services offer.

    Stating the mission of his entourage, Ogunjobi said the body has been rebranded and expanded to accommodate many people.

    He confirmed that the bank, through the NHF, has earmarked N800 million for property development in the state, but insisted the state must rejoin the scheme to access the fund.

    Ogunjobi urged the government to facilitate its membership procedure to enable it to access the fund and use it to consolidate the ongoing infrastructural development agenda of the state.

  • Pensioners advised to serve as brokers

    Retired workers of the Federal Mortgage Bank of Nigeria (FMBN) have been advised not to sit back after retirement but to become players in the real estate sector as brokers, loan recovery agents and mortgage administrators, among others.

    The President, Real Estate Developers Association of Nigeria, Mr Olabode Afolayan, gave the advice while delivering a lecture at the Second Delegates Conference of the  pensioners in Ibadan, the Oyo State capital, yesterday.

    He said they are positioned to service the housing needs of the citizens in view of their rich experience.

    He said: “You are ready army of resource persons for housing finance sub-sector. This is apt if you all update your knowledge in tandem with modern dynamics in the housing delivery system.

    “You are ready tools of enlightenment on the activities of the institution to the teaming populace who are oblivious of the role of FMBN. Many do not know how to access National Housing Fund loan.

  • NLC urges FG to recapitalise FMBN

    NLC urges FG to recapitalise FMBN

    President of the Nigeria Labour Congress, Comrade Abdulwaheed Omar, has charged the Federal Government to recapitalise the Federal Mortgage Bank of Nigeria.

    Omar said this is necessary in order to address housing deficit in the country.

    He disclosed this at the groundbreaking ceremony of Goodluck Legacy Estate held in Abuja on Tuesday.

    Omar said: “I want to call on the government to recapitalise FMBN. I think we are tired of institutions that are notorious for catching thieves like the Economic and Financial Crimes Commission. I think we need the ones that are adding values critically.

    “The FMBN is one of them. I would say we have to recapitalise this bank so that we come for the next ground breaking which will be millions. We will know that it has been led by the FMBN.”

    Omar, who was represented by his deputy, Comrade Isa Aremu, commended Ecobank for supporting the project with 10 million naira.

    The soft loan is to be paid at an interest rate of 12 percent while the project is to be completed within 18 months.

    In her remarks, the Minister of Housing and Urban Development, Mrs. Amal Pepple, disclosed that the FG is transforming the sector, adding that recapitalisation of the FMBN will start soon.

    lwaheed

  • FMBN to deliver N1.86bn housing estate in May

    FMBN to deliver N1.86bn housing estate in May

    …Why social housing is delayed— Amma Pepple

     

    The Federal Mortgage Bank of Nigeria (FMBN) is set to unveil 700 units of houses in Abuja in May, it was learnt over the weekend.

    The Managing Director of FMBN, Gimba Ya’u Kumo, spoke in Abuja said the houses were being built at a cost of N1.860billion.

    Kumo said the estate popularly called Brick City along the Abuja-Kubwa Expressway was built in collaboration with Urban Shelter Limited.

    The FMBN boss said the estate was 80 per cent complete.

    Kumo said: “This is one of the few projects that we are partnering with private developers.

    “If you take the history of urban development, they are high end developers in this town but when we came in 2010 we asked them for a partnership and we are putting in like N1.860billion to deliver 700 units of housing here.

    “This place is less than one year when we started. So this is part of the efforts we are putting in place to deliver houses for Nigerians. The level of completion is lost 80per cent.”

    The Minister of Lands, Housing and Urban Development, Mrs Amma Pepple, inspected the project and described the quality of work as good.

    Pepple said the government hopes to increase the houses to 1000 units.

    She said the project was 100 per cent financed by the FMBN.

    Pepple said: “The quality of the work is good and the number, already so many, are taken up and we are hoping to have over 1000 units here because we want to provide accommodation for our people.

    “Those who bought the first phase were lucky. They were quite cheap. I think having a two-bedroom flat for N5million and then three-bedroom N7million I think is reasonable in an environment like this. We are the ones who funded it 100 per cent.”

    The Minister said social housing will only become reality in the country if the Social Housing Bill pending before the National Assembly is passed into law.

    Responding to a question, Pepple said: “I don’t have a social housing project. There is draft Social Housing Bill in the National Assembly which is sponsored by a Senator.

    “If you say you are doing Social Housing, it means government must subsidise the building of those houses and you give to those who are in need at a lower cost.

    “So the bill has not been passed. When it is passed then we will know where the money is going to come from to finance those houses. As long as the bill is not passed we are not doing social housing but we are also looking at other areas of financing since housing must be driven by the private sector.

    “When we had the presidential retreat on housing in November last year we talked about everything stifling financing and mortgaging. We talked about other areas maybe using pension funds and unclaimed dividends and the President was interested in those things.

    “The issue of where else we can get money to finance the housing sector because we know that there will always be off-takers for those houses but what we need to do to satisfy a majority of our people is to ensure that the houses are affordable to all the groups.

    “We are taking care of everybody. But in this country people tend to say what have you done? We have done a lot. If you go round you will see that a lot of projects are coming up.”

    Chairman of Urban Shelter Limited, Alhaji Ibrahim Aliyu, said there was more to do for the society in terms of housing.

    Aliyu said: “There is much to do for society, I think whoever can make the contribution to move this country forward should and therefore one should make his contributions.

    “I am a retired person and not tired one and I believe I can make a contribution. I therefore decided to found this company since I left the service.

    “On the whole we have done well. Maybe about 4000 houses in Abuja from about 1992 to the present we have built. We build houses with a value from N5million to about slightly over a $1million. One bedroom will come to slightly over N5million. Two bedrooms range from about N8million to N11million and then the three bedrooms range from about N14million – N15million.

    “But in phase three, we coming up with houses which will be as good as these but because of improved technology and possibilities regarding the elimination of unnecessary structures we are able to reduce the unit cost without sacrificing the quality and the size of the building.

    “And we believe that the price will be more competitive even than is one. It is not often that that happens but we think that we can do it.”