Continually paving the path for affordable home ownership in Nigeria, the Family Homes Funds Limited (FHFL) is also responding to challenges on the demand side through partnerships with mortgage banks across the country, providing structured mortgages for families on low-income.
One of such partnerships is with the Cooperative Mortgage Bank (CMB), whose corporate goal like FHFL is to make home ownership easy for low-income earners, especially for members of cooperatives. Since January 2022, the relationship between FHFL and CMB has created home ownership opportunities for at least 432 families in 4 FHFL estates in Nasarawa, Delta, Kaduna, and Kano.
Supporting the delivery of affordable housing in Nigeria for three years now, FHFL bears witness to the inherent challenges in the environment. Experience has shown how very difficult it is for most families on low-income to afford homes that are even considerably cheap by all standards. A recent World Bank poverty assessment of Nigeria reveals that about 95 million Nigerians are living below the poverty line, making it practically impossible for them to meet basic needs like food and shelter on their own.
In the early years up to 2020, despite the development of homes with prices as low as N3 million, there were limited number of low-income families that could make purchases. It is on the back of this that FHFL began the partnership with selected mortgage banks including CMB to introduce payment options like installment and flexible long-term mortgages.
Within a short period, significant change occurred, indicating that a lot of families in Nigeria are receptive to home ownership opportunities that come with ease and assurance, especially with the installment payment option. Despite the unique challenges presented by the COVID-19 pandemic, resulting in a national lockdown for the most part of 2020, FHFL completed 2,304 homes in the five legacy estates, with 2,133 of them already sold.
Why it Matters
The partnership with mortgage banks to support low-income families has proven very effective in increasing access to housing. When low-income families know they can afford their home or mortgage, it frees up their ability to spend more on other essential items and cater for their household.
Housing is very key to reducing poverty and inequality. Without affordable housing, families have constrained opportunities to increase earnings, causing slower GDP growth. Even children living in stable, affordable homes are more likely to thrive in school and have greater opportunities to learn inside and outside the classroom.
Since 2018, FHFL began the mission to provide affordable homes for families on low-income, with the complimentary responsibility of creating jobs and promoting local production of building materials. Despite the significant need for affordable housing in Nigeria, the market has few local developers with the technical and financial strength to build large-scale projects.
Getting off the mark, FHFL had to contend with obvious barriers to affordable housing including high inflation, access to land, cost of construction, and limited purchasing power on the demand side. Nonetheless, the first initiative was the development of 2,304 homes across five states – Ogun, Kano, Delta, Kaduna and Nasarawa, which are today referred to as the FHFL Legacy Estates. Few years down the line, through partnerships with several state governments, FHFL has financed the development of 13,014 homes, creating about 60,000 direct and indirect jobs in the process, with a pipeline of additional 20,000 homes due in 2024. With the ambition of creating spaces of modern living, the homes are with necessary amenities and within areas of easy access.
Now with footprints across every region of the country, FHFL can look back and see the difference it has made, but not without losing focus of the massive need ahead, and how challenging it really is. However, lessons from the past will now prove vital in confronting the future.
FHFL is continuously looking forward, determined to always live by its mantra of changing lives through strong partnerships, knowledge sharing and innovation. Today, the challenges with delivering affordable and decent housing are well known, and only a few are ready to invest time and resources. Despite this, FHFL wants to be recognized as a leader in that respect, helping Nigeria fight poverty and inequality through the delivery of affordable housing, job creation and supporting the growth of the local economy.