FMBN face-lifts CHDL for delivering housing to informal sector
The Federal Mortgage Bank of Nigeria (FMBN) has revamped its Cooperative Housing Development Loan (CHDL) product as a channel for delivering houses to informal sector operators in Nigeria.
According to FMBN, the development is in line with the decision of the federal ministry of works and housing to adopt co-operative societies as the channel for housing delivery to Nigerians, particularly those in the informal sector who are encouraged by the ministry to form themselves into co-operatives.
This Informal Sector Co-operative Housing Scheme was packaged and launched a few years ago with the aim at bringing the informal sector of the economy into the mortgage net to enable them own homes through mortgage loans.
The apex mortgage bank noted that the key features of the product include tenors of up to 24 months with a moratorium of 12months and interest rate of 10 per cent, while up to N500million is accessible by qualified cooperative societies.
Director, Loans Production/Securities Issuance and Market Development, Bola Ogunshola, who was there at the time when the product was launched, explained that CHDL enables a cooperative society that has acquired a plot of land to develop houses for allocation to its members, but the parcel of land should have title in the name of the society which would act as the facilitator on behalf of its members, the loan transaction as well as facilitate construction of the housing units.
He stressed that to qualify for this loan, the cooperative society must have been in existence for a minimum of 12 months; the proposed estate must have good title that can be sub-leased to individual allottees/ purchasers of the housing units therein, while the tenor for the loan shall be 24 months with a moratorium period of 12 months at an interest rate of 10 per cent.
The former Minister of Housing, Ama Pepple, hinted that the product was designed precisely with the informal sector operators in mind to enable them to have access to cheap, reliable and affordable funds, with more relaxed condition for access.
Managing Director and Chief Executive Officer, FMBN, Ahmed Dangiwa, said that with the revamping of this product, he hopes that more Nigerians in this informal sector of the economy will have access to housing and thereby narrowing the housing deficit in Nigeria estimated at 20 million units.
The apex mortgage bank, besides CHDL, also has other products through which it increases affordability and eases access to housing by low income workers in the country.
The individual Home Construction Loan is one of such products, which enables National Housing Fund (NHF) contributors with unencumbered land, appropriate land titles and approved building plans to commence self-construction.
This product offers up to N15million to NHF subscribers at 7 per cent interest rate per annum with up to 30-year payment tenors depending on borrower’s age and number of years left in service.
The FMBN Rent-To-Own is another product, which allows beneficiaries to move into the bank’s property as a tenant and pay towards ownership of the property in monthly or annual installments over 30 years at an interest rate of 9 per cent.
The home renovation loan is yet another product that provides up to N1 million for home improvement.
Dangiwa disclosed that about 43,000 Nigerians have benefitted from this facility in the past three years.