The Federal Government on Thursday approved new equity requirements for Nigerians who wish to buy houses below N5 million and above using mortgage loans from the Federal Mortgage Bank of Nigeria (FMBN).
By the latest requirement, applicants for mortgage loans below N5 million will no longer have to provide any equity deposit to the FMBN. This is even as loan seekers costing between N6 and N15 million are required to deposit only 10 per cent equity to the mortgage bank to access the loan.
The Minister of Power, Works and Housing, Mr. Babatunde Fashola, made this disclosure at the seventh edition of the National Housing Council on Lands, Housing and Urban Development which held in Gombe.
Fashola, in his speech at the event said that government had mandated the FMBN to ensure compliance with the new approved mortgage requirements in order to boost the housing sector.
The minister also hinted that the government was planning to re-capitalise and open the National Housing Fund (NHF) to private sector employees.
According to him, the FMBN has between May 2015 and July 10, 2018, issued 3,862 mortgages to Nigerians.
Fashola explained: “It seems to me that whether it is to buy or to rent, affordability will always be an issue. But we must start by making clear to our people that not everyone can afford to buy or own a house, but it is ideal to at least seek to shelter everybody who has a job, by rental which is affordable.
“The question therefore is that after we have provided work for these vulnerable people, which pays them weekly or monthly in arrears, is it affordable for them when they seek to rent houses, and we ask them to pay one or two years rent in advance,” said Fashola.
“As for those who wish to buy houses, mortgages are the solution and we must issue more. The Federal Mortgage Bank is mandated to do so, not only by re-capitalisation but also by granting the following exemptions: 0% equity for loans not exceeding N5 million. Reduction of equity from 20% to 10% for loans up to N6 to 15 million.
“This is in addition to a planned re-capitalisation and the opening of the National Housing Fund (NHF) to non-government”, the minister added.
He also restated his earlier position on the need for landlords in the country to be collecting rentals on their houses in arrears as against advanced payments.
According to him, if this happens, housing will catalyse our economy as a tenant’s rent is matched to income and by so doing, give reliefs to millions of people who seek help to pay their rent even though they have a job.
Fashola also spoke on the arrangement being made by his ministry to collaborate with Ministry of Petroleum Resources and develop standards that will enable gas lines to be connected to Nigerian homes with domestic gas supplies for cooking and heating.
He clarified: “The oil and gas sector can also benefit enormously from housing if we all commit to implementing the gas master plan. At the moment we are under utilising our gas resources especially in the area of domestic use for cooking and heating.
“In order to take the benefit of this gift of nature, our ministry is working with the ministry of petroleum resources to develop standards for pipes and installations that will facilitate domestic use of gas for cooking and heating,” Fashola added.
