How FMBN, Organised Labour, NECA are Making National Housing Fund Scheme Work for Nigerians

John Ikyaave

“I am delighted to be a part of this history-making occasion to commission the 86-housing unit estate comprising one-, two- and three-bedroom bungalows with affordable prices ranging from N3.1 million to N8.3 million,” said Ayuba Wabba, who recently bowed out as president of the Nigeria Labor Congress (NLC), in Borno state.

“This project is made possible by the National Affordable Housing Delivery Programme (NAHDEP), an innovative collaboration between the Federal Mortgage Bank of Nigeria (FMBN), NLC, Trade Union Congress (TUC) and the Nigeria Employers Consultative Assembly (NECA) to build houses that workers can afford to own.
The houses are supposed to be 100, but the space the government graciously allocated for the project free of charge to reduce the house prices could only accommodate 86 units. While we deeply appreciate the government’s gesture, we would still solicit for additional land so the second phase of this important housing project can commence, and more Borno workers can have access to decent, affordable, and quality shelter,” he added.

A day earlier, a team comprising the Managing Director/Chief Executive Officer of the FMBN, Mr. Madu Hamman, Wabba, representatives of the TUC and NECA, and other housing industry stakeholders were in Damaturu, the Yobe state capital, where the Governor, Mai Mala Buni CON, commissioned 180 housing units built under the FMBN/NLC/TUC/NECA collaboration.
The contract for constructing the houses comprising 60 three-bedrooms and 120 two-bedroom bungalows was awarded in November 2020 and completed in July 2022. The estate sits on 30 hectares out of 40 hectares of land provided free of charge by the Yobe State Government. The move was to ensure that the price of housing units fell within the affordable range for its workers.

FMBN – Partnering to Deliver Value to Nigerian Workers
The FMBN has started 2023 on a strong note of delivering completed affordable housing stock and empowering Nigerians to own their homes. The housing events in Borno and Yobe states are part of the eight project locations that the FMBN/NLC/TUC/NECA team visited nationwide to commission 1,071 homes in January 2023 under phase one of the National Affordable Housing Delivery Programme.

The exercise commenced on 16th January 2023 in three locations with the commissioning of 100 housing units in Akure, Ondo State; 100 housing units in Yola, Adamawa State; and 315 housing units in Katsina. 19th January 2023 witnessed the commissioning of 90 housing units in Abakiliki, Ebonyi State, followed by 100 housing units in Sokoto and another 100 housing units in Damaturu, Yobe State on 23rd January 2023. On 24th of January 2023, the team commissioned the 86 housing units in Maiduguri, Borno State closely followed by another 100 housing units in Kogi State on 26th January 2023.

“As a management, we are committed to ensuring that we build a new FMBN that delivers value to Nigerian workers who contribute to the National Housing Fund (NHF) Scheme by forging strong collaboration with organized labor and NECA who represent their interests. “We appreciate the confidence the organised labor has reposed in the FMBN and the collaboration to deliver affordable housing to its members. They have allowed us to prove again that the National Housing Fund (NHF) Scheme is a reality and is working,” Hamman had said.

“The commissioning of these 1,071 housing units proves that the collaboration with labor and stakeholders under the National Affordable Housing Delivery Programme for Nigerian Workers is working and producing results. Also, it is achieving its goal of increasing access to affordable housing for Nigerian workers at terms and prices they can afford. We shall commission more houses built under phase one of the program. I am also happy that the second phase is already underway to deliver more of these affordable housing units for Nigerian workers in several locations across the country,” he added.

The FMBN/NLC/TUC/NECA affordable housing partnership, officially launched October 10th, 2018, plans to deliver a total of 2,800 housing units in fourteen (14) sites across the six geopolitical zones of the country in addition to Lagos and Abuja, in batches of a minimum of 200 units per zone. The second phase has also commenced and aims to deliver about 2,172 houses nationwide in 12 locations. House types include finished semi-detached bungalows and 1-, 2- and 3-bedrooms in blocks of flats.

The program marks the first time that FMBN and organized labor unions worked closely with experts and industry stakeholders to develop a realistic and acceptable framework for delivering affordable housing to Nigerian workers. Labour leaders who understand Nigerian workers’ realities and financial challenges made constructive inputs to the housing designs, pricing range, and other relevant conditions for delivering this project.
As a result, the National Affordable Housing Delivery Program for Nigerian Workers emerged a fit-for-purpose tool for delivering houses that workers can afford as part of the national effort to redress the huge housing deficit that experts now estimate to be over 22 million housing units.

The program also marked a significant departure from earlier social housing projects, which failed because their conception and execution failed to factor in the Nigerian worker’s concerns and economic realities.
A Focus on Housing Affordability and Sustainability
There are several remarkable things about the National Affordable Housing Delivery Program for Nigerian workers. This includes stakeholders sustained and shared commitment to designing and building houses that fit workers’ incomes, reducing the cost burden, and creating innovative, affordable paths to helping them own the homes.

Let’s start with the strategy to reduce costs and make homes affordable. The program opted for house types based on proven social housing models focused on one-bedroom, two-bedroom, and three-bedroom units.
“The philosophy behind the project is that it should deliver houses that workers can own and pay for conveniently within the context of their incomes. The implication is that we factored the financial capacity of workers into the house design. The approach has helped us break from past trends of building houses that are not affordable to Nigerian workers,” Hamman added.

Second, state governments are required to provide land at no cost for the housing estates as part of their contribution to providing affordable housing to their citizens. In all the locations where the FMBN/NLC/TUC/NECA Estates are sited, the respective state governments provided land. In some instances, they even took on the responsibility of providing access road to the sites and ensuring connectivity to the national electricity grid.
By providing land and related infrastructure, state governments helped to eliminate significant cost elements that determine the eventual house price, thus improving home affordability.

Third, under the program, the FMBN commits to leveraging funds from the National Housing Fund (NHF) Scheme to provide construction financing for housing projects at a single-digit interest rate of 10 per cent to reputable developers. The speed of FMBN construction financing, mobilisation of reputable developers and on-site monitoring of the projects is helping a long way to ensuring timely delivery as well as compliance with design specification.

Affordable Path of Owning the Homes
FMBN also provides Nigerian workers several convenient pathways to owning homes built under the scheme. This includes the legacy NHF Mortgage Loan and the innovative rent-to-own housing product.
“In addition to providing construction financing for the projects, FMBN provides mortgage financing for the purchase of the houses at an interest rate of six per cent per annum, which is the lowest rate in Nigeria with a repayment period of over 30 years. There is no other Bank in Nigeria with such a long-term facility and at such a rate,” Hamman added.

Under the terms of the program, the FMBN provides low-interest housing loans to registered contributors to the NHF to enable them to purchase houses. Eligible workers whose loan requirements fall below N5 million will pay zero equity contribution to access the facility.
Those requiring N5 million to N15 million will only make a 10 per cent equity contribution instead of the old 20 per cent and 30 per cent requirement regime.
The housing loans have a convenient payment plan with tenors of up to 30 years, depending on the age of the beneficiaries and years in service.

The evident and practical success stories of the National Affordable Housing Delivery Program for Nigerian workers as evidenced by the 1,071 homes completed and commissioned with off takers taking possession, the rapid progress being recorded on the phase 2 of the program along with the stakeholder wide acceptance and buy-in shows that the program is a veritable tool for delivering affordable housing.
According to the FMBN MD/CEO, the project shows that the Bank understands the critical housing shortage that Nigeria faces, the urgency to fix it and is actively taking bullish steps towards addressing it.

“These projects underscore FMBN’s new approach, which aligns with the vision that homes must be built for specific profiles and identified off takers from the beginning,” he said.
Hamman believes that the strategic partnership with critical stakeholders – NLC, TUC, and NECA – must be encouraged by all parties to enhance the performance of the FMBN.
It therefore behooves the government, stakeholders, and housing industry policy leaders to encourage the partnership and ensure that it is scaled up for even greater impact nationwide.

Ikyaave is a housing policy analyst based in Abuja.