By Tinuade Abe-Alimi
In response to the promise of the federal government in providing housing, the Federal Mortgage Bank of Nigeria (FMBN) and the Federal Housing Authority (FHA) are to sign a Memorandum of Understanding (MoU) to meet the President Muhammadu Buhari’s annual target of delivering one million housing units.
The institutions also decided to agree to reduce housing deficit through a number of on-going housing schemes such as the Accelerated Housing Scheme for selected federal MDAs, the Federal Integrated Staff Housing (FISH) Scheme for federal civil servants among others.
This was the resolution reached at a working visit of the management of the Authority to FMBN. At the meeting, FHA Managing Director, Prof. Mohammed Al-Amin noted that FMBN and FHA have a long history as a result of the complementary roles each play in the housing delivery chain.
According to Al-Amin, FMBN granted the FHA an Estate Development Loan to construct over 250 housing units at the Obada-Oko Estate in Ogun State and mortgage loans at concessionary interest rates to its subsidiary, FHA Mortgage Bank Limited, under the National Housing Fund (NHF) scheme.
The FMBN’s Acting Managing Director/Chief Executive, Mr. Richard Esin identified the funding of mortgages for affordable housing for the Nigerian mass market segment as a key business focus of the Bank.
He pointed that in order to create the required synergy; FMBN is to provide funding for housing development on land banks held by FHA nationwide and expressed optimism that the collaboration between the duo provides the best synergy for delivering housing for the mass market segment for contributors to the National Housing Fund (NHF) Scheme.
Likewise, the Federal Mortgage Bank of Nigeria (FMBN) and the Nigerian Mortgage Refinance Corporation (NMRC) are to collaborate towards strengthening the secondary mortgage market and the Nigerian housing sector in general.
In a related development, Esin informed the NMRC Chief Executive, Professor Charles Inyangete that FMBN is refocusing its business model to address the lower end of the income ladder with emphasis on the mass market for housing delivery.
Professor Charles articulated the hope of more positive interaction and the need for synergy between the institutions, which are set up to address different income segments of the Nigerian mortgage market.
Despite the different market segments served by FMBN and NMRC respectively, it was noted that the challenges faced are common to the Nigerian Housing/Mortgage sector and therefore requires both institutions adopting a collaborative and complementary approach to addressing such issues.
Consequently, areas for a common synergy that were identified at the meeting include the review of land and property registry practices for time and cost-effectiveness, the enactment of a foreclosure law to mitigate mortgage lending risks, the introduction of industry-wide uniform underwriting standards and the development of a data collection system for the Nigerian mortgage market. Both institutions agreed to set up a committee to further explore and deepen their relationship along the identified areas slated for collaboration.