By Emeka Ezekiel, Abuja

The Federal Government, through the Federal Mortgage Bank of Nigeria, has approved N17.6bn as estate development loan for 32 real estate developers.

The loan is for the construction of 6,214 housing units in the Federal Capital Territory.

The amount represents 25 per cent of the bank’s total loan portfolio as at December 31, 2010.

The Managing Director, FMBN, Mr. Gimba Ya’u Kumo, who confirmed the development in Abuja on Wednesday, said the FCT contributed N20.7bn out of the N64.8bn it collected under the National Housing Fund scheme as at December 31, 2010.

The NHF scheme was established by Decree 2 of 1992 for workers to contribute 2.5 per cent of their basic salaries into a pool to be managed by the FMBN. The Fund is to be used to grant mortgage loans to workers at concessionary terms for the purchase, building, expansion or renovation of their houses.

Contributors are expected to access the Fund through Primary Mortgage Institutions accredited by the Central Bank of Nigeria and FMBN.

The lending rate under the scheme is six per cent, while the repayment period is a maximum of 30 years, subject to the applicant’s age.

However, Kumo disclosed that the FMBN had so far approved N2.6bn loan for 1,011 beneficiaries through the FCT-owned Aso Savings & Loans Plc to purchase houses.

He said, “The FMBN has approved N17.6bn as estate development loan for 32 real estate developers. The loan is for the construction of 6,214 housing units in the Federal Capital Territory. The loan is being funded from the Estate Developers Loan Scheme being disbursed by the FMBN.

“This is in addition to other loans the FMBN has granted FCT residents through other duly accredited primary mortgage institutions. Under the monetisation policy of former President Olusegun Obasanjo’s administration, FMBN was called upon by the Federal Government to play the critical role of refinancing mortgages created for the sale of non-essential residential Federal Government houses in the FCT.

“To this end, the FMBN in 2007, issued the first tranche of a mortgage-backed bond of N26bn to provide single-digit, 15-year mortgage loans to Nigerians to purchase 9,525 housing units sold in the FCT.”

He said with respect to Aso Savings & Loans Limited, the FMBN had refinanced the 8,358 mortgage loans it created to the tune of N23.4bn, which represented 90 per cent of the tranche size.

Kumo noted that the FMBN was currently working out modalities for the issuance of the second tranche of mortgage-backed bond to refinance additional 6,533 mortgages worth N17bn, under similar affordable loan conditions.

He noted that the FMBN would continue to collaborate with the FCT Administration to provide affordable and decent housing for FCT residents.

He said, “With respect to the mortgage-backed bond transaction, there is a need for the FCT administration to make annual budgetary provision for transaction subsidy, interest rate and tenor mismatches in the mortgage-backed bond programme, which it had provided for in the past.”

“Specifically, we are seeking the FCT Minister’s approval for the payment of N661.29m being arrears of the interest subsidy as at the period ended April 30 2010.”

He added, “We need to take immediate action at this stage to forestall possible call-in of the Federal Government’s guarantee for the bond, which will mature in 2012.

Already, we are holding discussion with some foreign investors such as EXIM Development Corporation and NERIDA International, both of the United States of America for the construction of mass housing in selected states of the federation and the FCT.”

Source: Punch