By Adebayo Obajemu

The growing challenge of house ownership in the country is pushing Nigerians to adopt unorthodox means to put a roof over their head given the failure of government agencies saddled with the responsibility to deliver on their mandates.

Although government at both federal and state levels have housing programmes, however, they grossly failed to provide sufficient number of housing units to meet the needs of the people, and those provided are out of the reach by of average Nigerians due to their high cost.

The housing challenge is global, but in Nigeria, it is a huge problem. According to the latest data from the National Bureau of Statistics, housing deficit in Nigeria is estimated to be between 17 and 20 million housing units and it keeps increasing annually by 900,000 units, the potential cost of overcoming this deficit is about N6 trillion.

Ojo Ademola is a teacher with the Ogun State Teaching Service Commission, and teaches English at Okearo Grammar School. According to him, he has had his own share of nasty experience with landlords, and he nearly went fisticuffs with the landlord of the last house he lived in for four years at Asuje, an Àgbàdo neighbourhood before moving to his own apartment courtesy of his participation in asset-based cooperative.

About two years ago, a friend Ajisegiri, introduced him to Ajeseku Cooperative Society somewhere at Agbado Crossing. He collected their N5000 membership form, and every month contributed N40000 out of his salary to the cooperative for four years.

“The N40000 I contributed was not an easy experience as I had to deny myself of many things I used to do, I also cut down on my expenses”, he told Business Hallmark. In August 2021, his Asuje landlord increased the rent on his one- room apartment by 70 percent. He couldn’t pay and was given six months quit notice.

He approached the cooperative, and he was advised to build his own house instead of having to pay another one year rental. Today, he is happy he heeded the advice of the cooperative. The sum of N8 million was made available to him in addition to allocation of one plot of land at Atan Ota, in Ogun State, where the cooperative had about 50 acres of land.

Tony Amadi is a structural engineer with Julius Berger, he lives in Alafia Estate in Ogba. He said from the time he began work about 18 years ago, he had determined never to live in those places that have not experienced modern development in terms of basic amenities.
“Thus when some of my friends went to Ikorodu, Alagbado and Mowe to buy land at cheap prices, some as low as N150,000 say about seven years ago I refused to join the bandwagons”, he said.

“Instead I joined an asset- based cooperative called Young Professionals Cooperative made up of professionals, engineers, lawyers, accountants and others. For four years, I contributed N50000 monthly. Just last year, a close friend who’s also a member informed me that a half completed building in the street next to his at Abule Egba was on offer for sale at a price of N8 million.

“He was keen that I should buy it because his own house which he inherited from his mother was close to the place. I made a loan request, and I was offered the sum of N16 million to buy and build. So, that fulfilled my dream of not going to the forest to buy a plot of land”, Amadi told Business Hallmark.

There are many of such mortgage-based cooperative societies in Lagos and other states.

Funsho Adebayo, a commercial motorcycle rider at Ishaga has similar success story to tell.
“Without Ifedayo Cooperative Society, I would still be at the mercy of wicked landlord”, he said.

According to him, he made a daily contribution of N500 to the cooperative for three years.
“I refused to go for any loan no matter the challenge I was facing during those periods, because I was determined to use the money to buy land”, he said.

After three years, according to him, he applied for a loan of N2 million and was given. With the money he acquired a half plot of land at Ijoko which cost him N150000 in 2016.
“To the glory of God, the house I built is where I live today.”

Many spoken to by Business Hallmark are of the view that the federal and state mortgage banks have failed woefully when one looks at their performance index.

Joe Boro is a level 12 information officer with one of the federal ministries in Abuja Early in his employment he registered with and contributed to the National Housing Fund (NHF) Scheme.

The NHF is a federal government initiative set up in 1991 to manage long-term housing finance to drive delivery of affordable housing to Nigerians through the Federal Mortgage Bank of Nigeria (FMBN).

About five years ago, Boro was given the keys to a three-bedroom, fully detached bungalow at the 230-housing unit Woodhill Estate located in Kuje, Abuja, FCT, after a down payment of N3.5M.

According to him, after registering with and contributing to the National Housing Fund (NHF) Scheme, he joined a Cooperative Society. He said he paid N3.5m equity, and FMBN paid the remaining balance.

“They would be deducting it from my salary till I retire, and it won’t affect me,” he told this medium.

In spite of criticisms levelled against Federal Mortgage Bank of Nigeria, in recent years, the bank seems to be coming on gradually, but in fits and start with a lot of discouraging bottleneck to access the loans, a spectre that drives many Nigerians to asset-based cooperatives across the country.

FMBN Cooperative Housing Development Loan Initiative

According to Business Hallmark’s findings the FMBN Cooperative Housing Development Loan (CHDL) also a well organised co-operative society with genuine land titles to access construction finance and build houses for its members who must contribute to the National Housing Fund (NHF) Scheme.

The loan initiative allows up to N500million at a lower interest rate of ten percent. Chief characteristics include tenors of up to 24 months with a moratorium of 12months. Once built, FMBN packages mortgage loans to enable the members to own the houses.

Babatunde Raji Fashola, SAN, minister of Work in 2020 kicked off the National Cooperative Housing Development Scheme to boost the delivery of affordable housing to Nigerian workers in a structured manner.

Under the scheme, FMBN would provide affordable housing estate construction finance through reputable developers under the Bank’s co-operative housing development loan portfolio.

After that the FMBN will subsequently make available mortgage loans of up to N15 million to the members of the co-operatives at a nine percent interest rate per annum with tenors of up to 30 years depending on the contributors’ age through primary mortgage institutions.

The Young Professionals Cooperative society is one of many co-operatives in the country that is giving succour to many Nigerians, disappointed with lackluster performance of the federal and state mortgage institutions.

From the beginning of the industrial age in 18th century housing co-operatives have been serving as a solution to the desperate housing conditions of Europe’s working classes. By the early 20th Century, housing co-operatives were more or less common throughout Europe.

In particular, after World War I and World War II, they assumed a crucial role in rebuilding the damaged housing stock. Nowadays, according to the Co-operative Housing International, 27 million Europeans live in housing co-operatives. From Europe it has spread to other parts of the world.

The trend of a more robust private- sector driven housing market continues to gain traction in Nigeria as a result of the failure of agencies of federal and state governments saddled with the responsibility of providing decent housing.

Another private initiative to address housing shortfall is the Family Homes Funds Limited (FHFL) which last year unveiled a home loans assistance programme focusing on Nigerians of low/middle income, giving them a low-cost, deferred equity loan for up to 40 per cent of the cost of their home.

The initiative is focussing its binoculars on first time home buyers and individuals who can muster a deposit of 10 per cent of the purchase price, especially anyone who earns between N50,000 to N1.7 million yearly.

FHFL is reportedly in synergy with state governments and private developers across the country to facilitate the construction of affordable homes for people on a modest income, who will off-take these homes with financial assistance through the Help To Own Programme.

It was learnt that the Fund has reached an agreement with some mortgage and commercial banks to participate in the Help to Own (HTO) Fund. The scheme backed by African Development Bank (AfDB) has estimated that at least 3,750 new Help to Own mortgages will be supported through this proposed intervention by the partnership with AFDB), directly resulting in the creation of approximately 9,375 direct jobs and impacting at least 18,750 beneficiaries.

According to reports, AfDB has given approval for financing of up to $60 million for Homes Loan Assistance Programme managed by the Family Homes Funds Limited (FHFL) with the support of the Federal Ministry of Finance, Budget and National Planning.

Analysts believe the flowering of asset-based cooperatives has been gradually making a difference in making houses available to low and middle income Nigerians.

Many observers of the housing sector believe that corruption and inefficiency are responsible for the state of affairs in the sector. This has adversely affected the inability of low and middle income Nigerians to access loan facility that will secure them home ownership.

In a recent report, no less than 60 mortgage banks and estate firms are said to be indebted to the Federal Mortgage Bank of Nigeria to the tune of N48,304,975,056.9.

A source at the Federal Ministry of Housing confided in Business Hallmark that the National Housing Fund facility was diverted or misappropriated by the mortgage banks and private real estate developers which benefited immensely from the initiative.

The source added that loans were allegedly granted to developers for the construction of affordable houses for Nigerians, but many of firms did not use the funds for this purpose.
This revelation came to the fore when an investigation was carried out by the FMBN and the defunct Special Presidential Investigative Panel on the Recovery of Public Property.
The investigation unearthed the fact that many of the developers completed the projects, sold off the property, yet refused to pay back the loans, while some reportedly absconded with the money.