FG inaugurates housing scheme for informal sector workers

Apparently concerned by the 16 million housing-unit deficit in the nation and the exclusion of over 80 per cent of the populace from the existing mortgage arrangement, the Federal Government on Monday unfolded a scheme that would facilitate access to affordable housing by many low income earners.The Informal Sector Co-operative Housing Loan Scheme, which was inaugurated in Lagos by the Minister of Lands, Housing and Urban Development, Ms. Ama Pepple, was designed by the Federal Mortgage Bank of Nigeria to assist people in the informal sector to own individual homes in their lifetime through cooperative societies.The minister said the scheme was developed in recognition of the immense benefits inherent in the sector and the need to unleash its potential towards promoting a virile mortgage market in support of mass housing delivery.Under the Cooperative Housing Development Loan, cooperative societies that have acquired parcels of land to develop houses for their members will be given mortgage loans at 10 per cent interest over a 24-month tenor with a moratorium period of 12 months.The Cooperative National Housing Fund Loan offers individual cooperative members mortgage loans to buy houses developed through the CHDL or renovate existing ones at an interest rate of six per cent for a tenor of 25 years.Justifying the introduction of the new scheme, the minister said it had been recognised that the most reliable and efficient mechanism of availing informal sector workers housing finance was by organising them into cooperative societies in order to confer credibility on their low credit ratings.She said housing finance in the country was being encumbered by paucity of long-term funds and mortgages, adding that the unsatisfactory state of housing was further accentuated by other constraining factors such as high cost of land, difficulties in obtaining titles to land, high cost of perfection of legal processes and high cost of building materials, as well as absence of enabling legislation.
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