Lagos, NMRC partnership seen repositioning state’s Rent-to-Own initiative
There are strong indications that the partnership which Lagos State government entered into recently with the Nigerian Mortgage Refinance Company (NMRC) and some estate developers will reposition the state’s new homeownership initiative known as Rent-to-Own.
Rent-to-Own is the state government’s initiative aimed to make homeownership easy for many of the citizens who, on account of affordability, cannot buy or build their own homes. The initiative enables a subscriber to rent a house, pay rents on it for a minimum of 10 years and thereafter own the house.
Lagos is Nigeria’s largest economy and the 5th in Africa. It has a very large population estimated at 22 million crammed in a relatively small land mass. The city state accounts for about 34 percent of real estate activities in Nigeria, but majority of its residents are ‘homeless’.
A recent report by Pison Housing Company estimates the state’s housing deficit at 3 million units. The report adds that the housing deficit in the state is both qualitative and quantitative, pointing out that about 65 percent of the state’s population lives in rented accommodation.
The recent memorandum of understanding the state signed with NMRC and developers, which is premised on the financing, development and delivery of the 20,000 housing units Lagos Affordable Public Housing (LAPH) initiative, is therefore meant to address all these and more.
“The LAPH home ownership initiative and this collaboration is an opportunity for the state and its citizens to leverage the benefits available under NMRC; this refinancing agreement will assist the supply side as well as the demand side of the value chain”, said Gbolahan Lawal, the state’s commissioner for housing, who spoke at the signing event.
Lawal hopes that the refinancing agreement will set in motion a revolving pool of funds for mortgage origination which will assist developers and provide them access to construction finance and help scale up housing delivery. “This will also avail citizens of the state the affordability and accessibility that NMRC provides through the refinancing of long-term mortgages thereby unlocking its multiplier effects on the state’s strong economy, including jobs and wealth creation”, he assured.
Examples of these efforts, the commissioner said, include the effective re-positioning of housing provision institutions in the state and the successful implementation of the Rent-To-Own scheme which has driven the growth of the sector and enabled many Lagosians, as a matter of fact over 2,000 Lagosians, realize their dreams of affordable home ownership.
Charles Inyangete, MD/CEO of NMRC, described the day’s event as a watershed for his company, explaining that the signing of the MoU was a journey on the path to making homeownership for Nigerians a reality alongside Lagos State.
A private sector-driven company with the public purpose of developing the primary and secondary mortgage markets by raising long‐term funds from the domestic capital market as well as foreign markets, NMRC was established in January 2014 with the mandate to promote wider spread of home ownership, accessibility and affordability in Nigeria.
Its mission is also to break down barriers to home ownership by providing liquidity, affordability, accessibility and stability to the housing market in Nigeria which explains the CEO’s passion for this partnership. “Lagos is at the frontiers and, indeed, at the leading edge of making homeownership a reality; it is creating the enabling environment for business to invest in housing and the signing of the MoU is on the path to doing that”, he noted.
According to him, the state will be making sure that titles exist for the properties and the land on which the development will take place and done timely just as it will be committing to allocating to developers appropriate land for the purpose of the development while NMRC is committing to stand at the back end of the transaction to ensure that all the primary mortgage banks have funding available for the refinancing of the project.
As a secondary mortgage market and consistent with its mission, NMRC is part of what is called the Mortgage Warehouse Fund that will provide funding for mortgage institutions to be able to actually create mortgages in the first place. It is hoped that this will be part of the process for driving the actualization of the new partnership on the part of the developers.
Inyangete said the signing of the agreement is a convergence of all the parties housing delivery with Lagos as the driver and the provider of land and titles; NMRC as the provider of finance, and the developers without whom his company wouldn’t be providing financing.
Adebola Sheidu, chairman of Brains and Hammers Limited, said that hard work and cooperation of both the public and the private sector was required to tackle the issue of housing deficit in Lagos and Nigeria as a whole. He noted that construction of houses has never been the major issue facing developers, but delivering affordable homes, stressing that the event was not just the signing of some documents, but a major breakthrough for the housing sector in Lagos and Nigeria as well.
CHUKA UROKO