• PenCom Director-General, Mrs Chinelo Anohu-Amazu
Four states have provided land for the Federal Ministry of Finance FMOF to build houses under a mortgage scheme.
The ??? are to built with pension funds in order to bridge the 77million housing gap.
The scheme is the outcome of a recommendation by a committee established by the FMOF comprising the Debt Management Office (DMO), Nigerian Sovereign Wealth Investment Authority, Pencom and Nigeria Mortgage Refinancing Company.
The Head, Investment Supervision Department, PenCom, Ehimeme Ohioma, in a paper titled: “Pension funds for economic development: Investing Pension funds in infrastructure” in Calabar, the Cross River State capital, presented at a seminar for reporters, said the land and Certificates of Occupancy were part of the states equity contribution to the mortgage.
Six other states, he said have also shown interest in the project, adding that the Federal Government’s aim is to provide land to reduce the cost of finance and ensure a single digit mortgage.
He said if the government did not provide land and infrastructure, the cost of the houses would not be affordable.
Ohioma said: “There is a steering committee being anchored by the Ministry of Finance on enhancing the mortgage finance industry. Houses are going to be built and people are going to be given mortgage to have those houses. The Federal Government is looking at providing land as its own equity contribution and what this means is that it will reduce the cost of finance.
“The target of the Federal Government is that the mortgage rate should be single digit. If the government does not provide the land and infrastructure, the cost of those houses will not be affordable to the ordinary Nigerian that would require them. So, they are working with state governments starting with 10 pilot states.
“The land and infrastructure is financed by governments and there are budgetary provisions for this. When PenCom sees that it is working, then the pension funds will come in. But for now, the government is financing the initial stage in conjunction with 10 states.
“The last meeting was held some weeks back and as at this time, four states have already given Cs of O to show commitment to the project and they will ensure that it is an owner occupier so you must live in the houses. This will ensure that it goes to the right people. So, if you already have a house somewhere, searches will be done and your name will be cancelled from it if you are successful. It must be owner occupier houses.”
Meanwhile, PenCom has almost finalised guidelines for mortgage to enable contributors under the Contributory Pension Scheme (CPS) to own their homes.
This is based on the new insertion in the Pension Reform Act (PRA) 2014 that allows Retirement Savings Account (RSA) holders to access part of their RSA fund for payment of equity contribution for residential mortgage.
He said what this means is that when they come out with the guideline, all the grey areas would have been addressed.
Ohioma said: “The Commission has been in talks with the Nigeria Refinancing Mortgage Company and other mortgage lending institutions. We are trying to fine-tune the grey areas because we are aware that if the guidelines are issued today, the whole seven million contributors, including the two million that already have their own homes, would want to just grab the money. Many will see it as an opportunity to just take their money and this is not the thrust of the federal government for pension.
“We are coming up with a very robust guideline that will ensure that the system is fool proof to a great extent. Although you cannot totally eliminate malpractices, you can minimise it to a great extent that the purposes to which contributors access and drawdown on the funds are been met and they are really going into having their own homes.’’
The ??? are to built with pension funds in order to bridge the 77million housing gap.
The scheme is the outcome of a recommendation by a committee established by the FMOF comprising the Debt Management Office (DMO), Nigerian Sovereign Wealth Investment Authority, Pencom and Nigeria Mortgage Refinancing Company.
The Head, Investment Supervision Department, PenCom, Ehimeme Ohioma, in a paper titled: “Pension funds for economic development: Investing Pension funds in infrastructure” in Calabar, the Cross River State capital, presented at a seminar for reporters, said the land and Certificates of Occupancy were part of the states equity contribution to the mortgage.
Six other states, he said have also shown interest in the project, adding that the Federal Government’s aim is to provide land to reduce the cost of finance and ensure a single digit mortgage.
Ohioma said: “There is a steering committee being anchored by the Ministry of Finance on enhancing the mortgage finance industry. Houses are going to be built and people are going to be given mortgage to have those houses. The Federal Government is looking at providing land as its own equity contribution and what this means is that it will reduce the cost of finance.
“The target of the Federal Government is that the mortgage rate should be single digit. If the government does not provide the land and infrastructure, the cost of those houses will not be affordable to the ordinary Nigerian that would require them. So, they are working with state governments starting with 10 pilot states.
“The land and infrastructure is financed by governments and there are budgetary provisions for this. When PenCom sees that it is working, then the pension funds will come in. But for now, the government is financing the initial stage in conjunction with 10 states.
“The last meeting was held some weeks back and as at this time, four states have already given Cs of O to show commitment to the project and they will ensure that it is an owner occupier so you must live in the houses. This will ensure that it goes to the right people. So, if you already have a house somewhere, searches will be done and your name will be cancelled from it if you are successful. It must be owner occupier houses.”
Meanwhile, PenCom has almost finalised guidelines for mortgage to enable contributors under the Contributory Pension Scheme (CPS) to own their homes.
This is based on the new insertion in the Pension Reform Act (PRA) 2014 that allows Retirement Savings Account (RSA) holders to access part of their RSA fund for payment of equity contribution for residential mortgage.
He said what this means is that when they come out with the guideline, all the grey areas would have been addressed.
Ohioma said: “The Commission has been in talks with the Nigeria Refinancing Mortgage Company and other mortgage lending institutions. We are trying to fine-tune the grey areas because we are aware that if the guidelines are issued today, the whole seven million contributors, including the two million that already have their own homes, would want to just grab the money. Many will see it as an opportunity to just take their money and this is not the thrust of the federal government for pension.
“We are coming up with a very robust guideline that will ensure that the system is fool proof to a great extent. Although you cannot totally eliminate malpractices, you can minimise it to a great extent that the purposes to which contributors access and drawdown on the funds are been met and they are really going into having their own homes.’’
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