By Yinka Kolawole
Real Estate Developers Association of Nigeria (REDAN) are negotiating a deal worth $1 billion (about N155 billion) with Shelter Afrique, a pan-African housing development finance organisation, to build 155,000 low and medium housing units across the country.
To this end, Secretary General of REDAN, Mr. Goke Odunalmi, said that a Memorandum of Understanding (MoU) has been drawn up to incorporate some key organs of government to ensure effective take-off of the project. Speaking on the modalities of the partnership.
“We are finalising discussions with Shelter Afrique for a housing finance deal of about $1bn. About 12 developers will receive about $50m each.
The money will be used to develop about 155,000 housing units for low and medium income earners in Nigeria. A pilot scheme of 200 housing units with 100 each in Lagos and Abuja monitored and supervised by REDAN.
“To ensure smooth operation of the pilot scheme project, vital organs of government, the Federal Mortgage Bank of Nigeria, (FMBN), Lagos Bureau of Lands, FCTA are all to be co-opted into the partnership. Expectedly, the Lagos Bureau of Lands and FCTA will be the providers of the land with FMBN managing the mortgage arm of the housing units to ensure early repayment of loan,” he said.
Meanwhile, REDAN President, Chief Olabode Afolayan, said at a recent press briefing that FMBN was invited to guarantee access to the loan, noting that the nation’s apex mortgage institution will serve as the delivery vehicle for the 12 enlisted developers.
Explaining the rationale behind the involvement of FMBN, he stated: “When we go to Shelter Afrique to access the loan, it will be one of the criteria to access the facility because loan is never given out except you have collateral.
In this kind of loan, nobody is interested in using houses or hotels as collateral. Shelter Afrique wants us to come with bank’s guarantee simply because bank that can give us the guarantee should be able to provide monitoring of the development to ensure that funds are not diverted, but spent on the purpose it was agreed upon.”
Afolayan remarked that FMBN would be expected to provide the National Housing Fund (NHF)’s facility for would-be owners of the houses built with the loan as well as help in repaying the loans.
He noted that it is easier to domicile the loan with FMBN to guarantee easy access by developers rather than with commercial banks that will create harsh conditions for loan’s disbursement
“What we are looking at is that when we get the money from Shelter Afrique and build the required number of houses, we are planning to sell the houses to contributors of the National Housing Fund so that it will be easier for us to get the money back. FMBN will help in paying back the loan being the only secondary mortgage institution in the country,” he stressed.