By YINKA KOLAWOLE, with agency report
The Federal Mortgage Bank of Nigeria (FMBN) introduced the Informal Sector Cooperative Housing Scheme in 2011 in a bid to integrate Nigerians operating in the informal sector of the economy into the National Housing Fund (NHF) scheme.
The loan facility under the scheme could be accessed in one of two ways, namely: Cooperative Housing Development Loan (CHDL) or Co-operative National Housing Fund Loan (CNL).
The Cooperative Housing Development Loan (CHDL) enables a cooperative society that has acquired a plot of land to develop houses for allocation to its members. The parcel of land will have title in the name of the society which will act as the facilitator on behalf of its members in the loan transaction and which would facilitate construction of the housing unit. The root of title of the estate land would be subleased to the beneficiaries.
Housing development loan
To qualify for the CHDL: The Co-operative Society must be registered with the Registrar of Cooperatives in charge of the area within which it is domiciled; Must be registered with the National Housing Fund (NHF) Scheme; Must be responsible for remitting the contributions of its members; Must be accredited by Federal Mortgage Bank of Nigeria (FMBN) and; must have been in existence for a minimum period of twelve month during which membership deals paid by members have been consistent.
In addition, the proposed estate must have good title that can be sub-leased to individual allotters/purchasers of the housing unit there in; The tenure of the loan shall be 24months with moratorium period of 12 months; the loan shall be disbursed to a cooperative society at an interest rate of 10 percent; the Cooperative shall identify a primary mortgage bank (PMB) with which it shall collaborate for the purpose of processing a Cooperative NHF Loan (CNL) for its members; the housing units for the proposed project(s) must fall within a target selling price not exceeding N15 million and; the land upon which the estate is to be built shall have legal title.
The security for disbursing each tranche of the loan shall be the title document of the estate land, and shall be disbursed in three tranches to complete the substructure, super-structure, and finishing, while FMBN shall finance 100 percent of housing development and 90 percent infrastructural facilities.
The co-operative society is to develop the housing estate in any of the following ways: Engage registered building professionals with a view to managing the projects and completing the housing units to standard; Use professionals from within its ranks, on submission of proof of technical expertise of members by the society; Engage an Estate Development company, provided the company is able to deliver the houses at a price affordable to the cooperators and; all housing units in the estate must be sold to the co-operative society members who are contributors to NHF Scheme. Documentation required for the CHDL include:
Certificate registration of the Co-operative society Bye laws of the cooperative society; Detailed Profile of the Co-operative Society and; Resolution of the Board of Trustees of the Society signed by the chairman and the Secretary, authorising it borrow.
National Housing Fund Loan
On the other hand, the Co-operative National Housing Fund Loan (CNL) offers individual co-operative member mortgage loan to buy a housing unit developed through the Cooperative housing Development Loan or renovate an existing one. Under this method, an individual cooperator shall enjoy the housing loan at 6 percent interest rate per annum; Cooperators shall make a down payment of 15 percent of the approved selling price/value of improvement as their personal stake in the loan;
Evidence of minimum NHF monthly contributions of N450.00 for a minimum period of six months will be required at the application stage and; any monthly contribution in excess of N450.00 shall be accounted for in favour as part of his/her personal stake contribution at the time of loan application. The tenure of the loan shall be 25years.
Documents required for CNL, to be submitted by a cooperative society, on behalf of its co-operators are: Evidence of membership of a co-operative society and; Evidence of NHF registration and up-to-date NHF contribution. To the Primary Mortgage Bank (PMB):