FG, Private Sector Begin My Own Home Scheme Housing Finance
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 t
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.