CBN urges states to sign Certificates of Occupancy to end housing deficit

Refusal of state governments to issue Certificates of Occupancy (C of O) timely has been identified as one of the causes of housing deficit in Nigeria.

Mr Adedeji Adesemoye, Deputy Director in charge of Nigerian Housing Finance Program (NHFP) at the Central Bank of Nigeria, said this on Tuesday at a workshop on Nigerian Housing Finance Program in Lagos.

The two-day workshop, organised by the CBN for 34 mortgage institutions, was aimed at addressing the housing deficit in the country.

Adesemoye said that the housing sector had the potential to create massive job opportunities if state governments issue C of Os which could provide liquidity for mortgage institutions.

He said that there was opportunity to refinance mortgages “in excess of  30 billion dollars but most of the properties have no C of O.”

According to him, most of the estates have no C of O but only have development lease agreement which does not meet the underwriting standards.

“So, it is tying down assets by not allowing liquidity to come in.

“The Federal Ministry of Power, Works and Housing have some estates that have been sold and transferred to people across the country and they are not signing C of O.

“Many of such C of Os have been there for years that are not singed. If signed, they could be brought to the state to regularise and the money can come in.

“If we are serious that we want supply to increase, the money that is coming from demand must have a place to move in,’’ he said.

Adesemoye said that discussions were ongoing with the Governors Forum to ensure they sign C of Os timely to promote the mortgage sector.

He said that the total mortgage asset to GDP was currently less than one per cent compared to a population of over 170 million Nigerians.

According to Adesemoye, 60 to 65 per cent of Nigerians are below 25 years of age which means that most of them are still in school and did not have capacity to own homes yet.

He said that the programme was supported by a World Bank facility of 300 million USD for 40 years with a 10 years moratorium which allowed CBN pay a low interest of 0.75 per cent.

He explained that the money would not be allowed to distort market through lending, but was designed in such a way to strengthen financial institutions.

Earlier, Mrs Olatokunbo Martins, also a CBN Director, said that stakeholders in the housing finance scheme did not fully understand housing finance, hence the need for the workshop.

Martins said housing finance was part of global efforts to making houses available to all by 2030.

“What we hope to achieve is affordable houses for all by 2030,” she said.

Mrs Adenike Fasanya-Osile, Housing and Mortgage Consultant to NHFP, said that the new programme took away the long wait with the old system because there was opportunity for intending home owners to negotiate with the banks.

“With this programme, the money is available, you can walk into your bank and get a mortgage.

“What we are telling our prospective home buyers is, don’t go and look for a house, go to the bank first and get pre-approved, know how much you can buy, know what your monthly payment would be and how much you would put down.

“When you know those three, you are shopping smart,” she said.

She explained that what was happening in the past was that developers build without consideration for the actual need of the type of houses.

“The CBN is to create the enabling environment for the 34 mortgage institutions to thrive,’’ she said.

She added that people were being encouraged to use their annual rents as equity contributions to own a home.

“We have a hash tag called ‘At Least Na Me Get Am’. We have this hash tag because we do not want our rentals to go and buy properties over what they can afford,” she said.

NAN reports that NHFP is a Federal Government initiative implemented by the CBN and supported by the World Bank with an International Development Association (IDA) loan of USD 300 million.

It was declared effective on Mar. 5, 2014 and has the primary objective of increasing access to housing finance by deepening the primary and secondary mortgage markets.

The project administration team of the NHFP is domiciled in the Other Financial Institutions Supervision Department of the CBN. (NAN)

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