As Nigeria and many African countries contend with a severe housing shortage, the Managing Director of Family Homes Funds Limited (FHFL), Femi Adewole has recommended more window of opportunities that will ease homeownership for most people on low-income.
Speaking at the September Coffee Session (Q&A with Mr Femi Adewole) organized by the African Union for Housing Finance (AUHF) on Thursday, the Managing Director believes that wide sector collaboration by multiple stakeholders will be critical to turning the tide in Africa’s housing market.
Speaking about Family Homes Funds – a social housing fund promoted by the Nigerian government for quality and affordable homes for low-income workers – the Managing Director said that since Nigeria’s independence, there had never been this level of clarity and purpose regarding housing development in the country.
The current government, at inception, deemed it fit that social housing was very critical for economic and social development. It was this resolve to address the housing shortages across the country that gave birth to the Family Homes Funds. Femi Adewole and his team at Family Homes Funds are adopting innovation and strong partnerships across public and private sectors to tackle what has been an agelong crisis in Nigeria.
‘’Our approach,’’ he said, ‘’revolves around a lot of partnership and innovation. It is not enough to just finance the development of homes, but it is always important to build sustainable homes that will lead to active communities that become new sources of livelihood.’’
Responding to a couple of questions, especially about how the Fund is able to deliver homes that are as affordable as N1.8 million, the MD remarked that the Family Homes Funds’ strategy rests on four key levers: the Affordable Housing Fund; Help to Own; Rental Housing and Land Development Fund.
Reflecting on these key levers, he said, ‘’through the Affordable Housing Fund, we are providing much-needed construction financing to state governments and private sector developers to ease the provision of affordable homes for many families. Through the Help to Own, we have created a home loans assistance program that offers deferred loans to low-income earners to increase their affordability and access to housing.
‘’Given that most workers are in informal employment, we are also creating a Rental Housing Fund that will create funding for public and private sector developers with a guaranteed exit for developers. A part of this is also dedicated to a students’ housing programme that will significantly improve hostel accommodation for university students across the country.’’
He also spoke about the Land Development Fund that will provide a short term construction finance facility for real estate developers with a 10% interest rate aimed at funding the development of a minimum of 250 affordable housing units for low-income families.
Speaking further, the MD said that an understanding of the demand side of the housing, and dependable access to relevant data about housing needs will offer a much broader opportunity for people who want a roof over their heads to have it.
On the issue of covid-19 and its impact on housing, he said that the pandemic greatly affected the financing capability of state governments and has driven a lot of stakeholders – including the Family Homes Funds – to evolve business models that include more private-sector partnerships.
‘’Recently, and for the first time, we raised a bond in the capital market to boost our ability to finance housing development across the country. We have also increased our lending opportunities to include more private sector developers.’’
Through these innovative approaches to housing development, the Family Homes Funds is gradually scaling up the housing supply in Nigeria and is building homes that are as affordable as N2 million. Recently, in the northeast state of Borno, Family Homes Funds, in partnership with the state government, completed and handed over about 1,000 homes that are not more than N2 million to previously displaced families who were fleeing the Boko Haram insurgency. In the coming months, additional 2,200 homes within the same price range will be completed and handed over to more families in need of shelter.
This has been described novel as pre-existing conditions and several economic factors would naturally make this seem impossible. In addition to its ongoing affordable housing projects, the institution is implementing the Nigeria government’s National Social Housing Programme (NSHP) that will provide up to 300,000 homes and lead to the creation of 1.5 million jobs across the country.
The AUHF session was moderated by Kecia Rust, the Executive Director and founder of the Centre for Affordable Housing Finance in Africa (CAHF) and featured participants from several countries in Africa.
The AUHF is a member-based, industry association of mortgage banks, building societies, housing corporations, Development Finance Institutions and other organizations involved in the mobilization of funds for shelter and housing on the African continent. As an industry body, the AUHF promotes the development of effective housing markets and the delivery of affordable housing across Africa, working in the interests of the members and the industry.
The Family Homes Funds is a social housing initiative promoted by the Federal Government of Nigeria as part of its Social Intervention Programme. The Company is a Limited Liability Company with initial shareholding by the Federal Ministry of Finance and the Nigeria Sovereign Investment Authority. The company aims to invest up to N1.3trn in promoting the development of 500,000 homes for people on low-income. In the process, the Company also aims to create up to 1,500,000 jobs.