PROPERTY NEWS

REELING from the global financial crisis and its backlash on the housing sector, which may have doused the hopes of many for affordable housing in the country, real estate developers are clamouring for a N200 billion bailout package from the Central Bank of Nigeria (CBN) in order to restore the flow of funds into the troubled sector.

The developers, acting under the aegis of Real Estate Developers Association (REDAN), made the plea in Lagos during their annual general meeting. They argued that "government and indeed the CBN should seriously give a thought to the allocation of at least N200 billion economic stimulus package for housing on soft terms, similar to such scheme now in force for other sectors of the economy, to be implemented through the association."

The mortgage sector has been in its doldrums with many unfulfilled dreams for prospective homeowners and builders. The only funds accessible now are through the National Housing Fund (NHF), which provides housing loans to contributors and Estate Development Loans (EDLs) to the developers. However, complaints have trailed both facilities as eligible subscribers queue for years to access the fund.

Federal Mortgage Bank of Nigeria (FMBN) figures show that total approved loans and advances as at June 2007 stood at N54.1 billion, while N27.3 billion was disbursed and used to finance 25,094 housing units. The EDLs stood at N35.2 billion in June 2007 and N17.7 billion was disbursed within the same period.

The association acknowledged efforts made by the Federal Mortgage Bank of Nigeria (FMBN) towards securing $1.5 billion revolving mortgage facility offered by HSBC and others. However, REDAN President, Mr. Olabode Afolayan said: "A reliable and steady flow of credit to the real estate and housing sector is essential to economic recovery given multiplier effect associated with mass housing development."

Meanwhile, a tripartite committee of FMBN, REDAN and Mortgage Banking Association of Nigeria (MBAN) has agreed to interest waivers on existing EDLs on disputed schemes and to look into critical issues and challenge being faced by the parties. The decision is expected to be approved by the FMBN board. "We are extremely disturbed by recent developments on the EDL issue, which viewed by recent trends, appears to have taken a new twist, despite extensive effort spanning a period of five months by the principal parties to resolve the matter amicably based on available facts on the ground," he said.

The group is also advocating a review of the FMBN’s terms and conditions applicable to both NHF and EDL schemes, including a strong advocacy for the remittance of a reasonable percentage of fees, such as 0.25 per cent payable by developers on EDL, to accrue to REDAN.

REDAN also noted that it had established a public private partnership scheme aimed at fostering profitable an cost effective partnership between public and private sectors by harnessing the pool of resources and expertise of the private sector in accelerating housing delivery. Already, a joint committee headed by Mr. Seyi Lufadeju has developed a blueprint and prototype models to fast-track housing delivery proposals by members.

The committee would establish an inter-bank committee to harmonise and negotiate suitable financing models packaged with concessionary terms and conditions for housing development projects as well as proposals for acquisition of a land bank under the National Housing Policy programme for subsequent allocation to developers across the country.

Afolayan said that REDAN’s 400,000 housing scheme originally planned to be launched and flagged-off early in 2010 had been suspended due to "unavoidable circumstances," but was now in progress ahead of a formal launching in the third quarter of the year.