By Ladi Patrick
Real Estate Developers Association of Nigeria (REDAN), a key player in the real estate sector, has described the Central Bank of Nigeria (CBN)’s, plan to create a fund for developers as a welcome development as this will boost the housing sector amidst the COVID-19 pandemic.
The President of REDAN, Alhaji Aliyu Wamakko, who stated this in a telephone interview with Viewpoint Housing News in Abuja, noted that the funds will cushion the effect of coronavirus pandemic on Nigerian economy.
Wamakko said the announcement by the CBN will increase the delivery of affordable housing to subscribers of the National Housing Fund (NHF) scheme.
According to him, “With the sit-at-home order by the federal and state governments, most developers are not working and that will impact negatively on the already existing 20 million housing deficit in Nigeria.”
The president said the planned fund shows the federal government’s commitment to achieving affordable housing scheme for all in the country.
According to him, “We welcome this development because it will revive the micro-economy where over 30 percent of the people are employed. It will also help developers to build affordable houses.”
He emphasized that the loan was long-overdue as it will ensure the growth of the housing industry and empower the Federal Mortgage Bank of Nigeria (FMBN) to service both the demand and supply sides of the housing market in Nigeria.
It would be recalled that the federal government through CBN had announced its intention to create a fund for developers in the real estate sector who have the capacity to repay the loan as at when due.
This was contained in a letter by the CBN Governor, Godwin Emefiele titled “Turning the Covid-19 tragedy into a new opportunity for Nigeria”.
According to him, the modalities of the funding option are still being figured out, as the CBN works with deposit money banks to identify potential/eligible off-takers.
“This is being done with the use of BVN. In other words, the CBN intends to verify the financial capacities of potential off-takers before any loan can be given to them,” said Emefiele.
While focusing on the mortgage sub-sector, the apex bank also disclosed that efforts are underway to provide assistance to the mortgage finance sub-sector in order to encourage its optimal performance.
In the same vein, the CBN will work with state governments to ensure the following: That the processes of issuing land titles become faster and less cumbersome, Reduce the cost of land documentation, and Ensure investment-friendly foreclosure laws.
However, the document did not disclose how much the housing fund will be worth or how much each off-taker will be eligible to get.
Other conditions of the loan and how potential off-takers may apply for it were not readily made available.
