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Mortgages will be cheaper in 2014 – Okonjo-Iweala

By on August 8, 2013

The Minister of Finance and Coordinating Minster of the Economy, Dr. Ngozi Okonjo-Iweala, made a statement assuring Nigerians of cheaper mortgages that will assist them to own houses from early 2014, saying the problem of housing has been compounded due to lack of access to mortgage loans because of the high charges and inadequate liquidity among the primary mortgage institutions (PMIs). The housing deficit is put at 17 million units with a growth rate of two million every year.

Okonjo-Iweala, however, said cheaper mortgages would be made available from the Mortgage Refinancing Company which would be launched by September 2013, thereby reducing the housing issues. Speaking on a RayPower FM programme on Monday, the minister said the new institution would enable PMIs have access to more liquidity and create more mortgages for Nigerians to access and own their houses at cheaper rates and also the World Bank is assisting the federal government to set up the company with a financial support of $300 million soft credit with zero interest, 10 years of grace and 40 years repayment period, stressing that with this financial support, they would be able to drive down interest rate to affordable levels.

According to her, now many working class people with decent jobs cannot walk into any mortgage firm and secure loans to build their houses due to high interest rate and inadequate funds.

“But we are developing this Mortgage Refinance Company, and the idea of the company, which will be private sector driven and majority private sector owned, is to be able to provide enough financing in the economy for mortgages to take place. The Institution will buy up mortgages that are put in place by the PMIs and when it does that, it provides more money for them to give more mortgages. That is what is done in other countries,” she said.

She further said  they have been working on this project for over a year, disclosing that within the next two months, the scheme would be launched by President Good luck Jonathan.

“The Mortgage Refinance Company will be floated between this August and September but the liquidity will not be available until January 2014. It will take some months for people to walk in and have those facilities. By January or February people will be able to feel the impact. The present Federal Mortgage Bank of Nigeria (FMBN) leadership is well positioned and willing to change the way of doing business. We must turn the housing sector into a sector that works for the economy. You cannot just come in as a young person and never have a dream of owning a house in the country. Our aim is to see if we can move up to 200,000 mortgages over the two to three years,” she said.

 

 

[YNaija]