FMBN urges state government to reduce title perfection fees

Amid low mortgage penetration and need to ensure affordability, the Federal Mortgage Bank of Nigeria (FMBN) has urged state governments to reduce title perfection fees, which currently range from five per cent to 10 per cent to the flat rate of 0.5 per cent.

The bank said that expeditious treatment of consent to mortgage transactions by Governors would improve transaction turnaround time. The action will also deepen the impact of its affordable housing delivery programmes to a greater number of Nigerian workers within the low and medium-income bracket nationwide.

FMBN also solicited stronger support and participation of States in the National Housing Fund (NHF) Scheme, provision of unencumbered land for the execution of strategic FMBN affordable collaborative housing schemes as well as support for the elimination of high costs and systemic bottlenecks to title perfection and Governor’s consent to mortgage transactions at the state level amongst others.

FMBN Managing Director, Ahmed Dangiwa, an architect made the case for improved affordable housing partnership during his briefing to the Nigerian Governors Forum (NGF) on the activities, programmes of the bank in Abuja. 

Dangiwa stated that FMBN is strategically positioned to energize State Government’s efforts to deliver affordable housing to their citizens in a sustainable and cost-effective manner on the back of its wide portfolio of affordable housing products.

This includes the National Housing Fund (NHF) housing loan of up to N15million payable over a 30-year period at best market interest rate of six per cent per annum; and NHF individual construction loan at nine per cent interest rate per annum with a 15-year tenor.

Other convenient housing loan products include rent-to-own scheme which allows beneficiaries to move into FMBN owned houses and payback in monthly installments over a 15-year period at single-digit interest rates with no equity requirement and the home renovation loans where up to N1million is given to NHF contributors who already own their homes to carry out necessary improvements and payback over five years.

Additional unique FMBN partnership advantages include the provision for zero equity contributions for housing loans below N5million and a maximum of 10 per cent for loans from N5million to N15million.

The FMBN boss also said the partnership will enable State Governments to better take advantage of its strategic financing windows for real estate construction and decades-old institutional experience in social housing provisioning.

Some of the affordable real estate financing windows that Dangiwa listed include Estate Development Loans and the Cooperative Housing Development Loans both available at best market rates of 10per cent interest rates and the Off-taker Guarantee Scheme at 0.5 per cent interest rate per annum.

He stated that the current executive management has set the FMBN on a new path of reform, innovation, accountability, efficiency, and high performance.

Dangiwa noted that within the last three years of the current management – April 2017 to date – they have recorded major milestones with the notable ones being increased public sensitization that has led to a spike in registered contributors to the National Housing Fund (NHF) Scheme to 5,026,777.

It has also increased NHF collections totaling N134bn to bring the cumulative collections on NHF since inception 26 years ago to N366bn. The three-year performance represents 36 per cent of total collections in the 26-year life span of the scheme.

Other milestones are increased NHF refunds to retired contributors to the scheme totaling N21bn within three years to bring the cumulative since inception to N32bn. This represents a 66 per cent increase in refunds within three-years; increased number of housing units by 7,740; increased number of mortgage loans provisioned to 3,749 and home renovations for 39,458 beneficiaries.
 
In his response, the Chairman of the Nigerian Governors Forum (NGF) and Executive Governor of Ekiti State, Kayode Fayemi thanked the FMBN MD for his insightful presentation.

He noted that Dangiwa has made a convincing case for the collaboration and that the governors are keen to engage further with FMBN as a strategic affordable housing partner.