Bank, NHF, others frustrate workers’ home dream as housing crisis worsens

Nigerian workers contribute monthly to the Federal Government’s housing scheme with high hopes of becoming landlords someday. This dream, for many, is never actualised due to difficulties associated with accessing housing funding opportunities. DAMILOLA OLUFEMI reports on the frustration of applicants and the implication on Nigeria’s rising housing deficit.

With rents hitting the roof, the dream of an average Nigerian is to one day be a house owner and escape the unending stranglehold of shylock landlords.

For those who are unable to conveniently afford to buy a land and build their choice homes, the available option has been to enrol with the National Housing Fund, through which housing loans can be obtained.

The NHF is a Federal Government scheme aimed at helping working Nigerians access and own affordable residential houses.
Ironically, the idea of seamlessly becoming a house owner through what is considered a well-thought-out, long-term financial commitment, has turned into an albatross for many, as they have had their hands burnt.

Bright Adeoye (pseudonym used due to public service policy) wished she never got entangled with the NHF scheme. Every month, since 2017, the civil servant working with the Federal Ministry of Industry, Trade and Investment, Abuja, remitted N5,000, to the scheme.

In February 2021, five years after the remittance started, she, alongside some applicants, applied for a loan at the Federal Mortgage Bank of Nigeria, to buy a house from a private estate developer on the outskirts of Abuja.

The woman said she, alongside other applicants, went to the bank to fill out forms, which were signed by the manager, after which files were opened and allocation numbers given to each of them.

Adeoye said they were given an assurance that accessing housing loans as contributors is usually seamless and always guaranteed.

She revealed that while their applications were still being processed, they received allocation letters endorsing them as certified owners of houses on a gazetted land.

Her allocation letter, a copy of which was made available to PUNCH Investigations, was dated January 27, 2022, and titled, “Provisional Letter of Allocation of a 3 Bedroom Detached (IGLOO I) Bungalow (D0557) At Brains & Hammers Bungalow City, Behind MD Abubakar Mobile Police Barracks, Along Kubwa Expressway.” In the document, the property was pegged at N15m, excluding taxes.

The letter partly read, “Accepting and returning this offer letter within one week from the offer date with evidence of payment of a total deposit of N15,000,000 into the accounts of Brains and Hammers Affordable Limited” with “N15,000,000 as the total amount payable by Allottee.” The applicants were further notified that repayment of the loan would be done in instalments and through gradual deductions from their salaries.

However, days later, when Adeoye went to inspect the house allocated to her on the gazetted land, a huge surprise lay in wait – it was nowhere near completion.

“The house had cracks, while windows and doors were not fixed,” she said in exasperation.

“I was told that allottees would have to complete the building, plaster and tile it based on preference.”

The civil servant told our correspondent that while the thought of putting finishing touches to the house was still of great concern to her, she received a message in June 2022, stating that the property initially allocated to them was no longer available.

“This is to inform all applicants who subscribed to Brains and Hammers Bungalow City via loans board that our three-bedroom fully detached house is no longer available, as all have been sold. However, our three and two-bedroom terraces are available. Sorry for any inconvenience this might cause. Thank you,” the message read.

A crestfallen Adeoye said her dream to own a house just fizzled before her eyes. With a pained expression, she said, “After giving us so much hope, we were told it was no longer possible.”

Asked if the reason for denying them the loan and house was explicitly stated, the civil servant said no form of explanation was given. Adeoye would later reveal that she stopped making efforts to access the housing loan and resigned herself to fate when she made no headway. She is, however, hopeful that someday, she would be able to save enough to finally own a befitting retirement home.

Established in 1992 by Act 3, the NHF was designed to mobilise and provide long-term housing loan facilities for Nigerians gainfully employed in the public and private sectors. Workers enrolled under the scheme remit 2.5 per cent of their monthly salary and can only obtain the loan once in their lifetime.

“The 2.5% of the monthly basic salary contribution qualifies you to access the loan. The pool of funds created by the contributors nationwide becomes available to any contributor to borrow from, after contributing for a minimum of six months.” NHF stated on its website.

Based on provisions of the scheme, a worker, also referred to as a contributor, is eligible to access a housing loan of up to N15m, repayable within the remaining years of service (which is not more than 30 years) at a fixed interest rate of six per cent.

The NHF further stated on its website that contributors with an annual income of N3,000 and above are eligible to apply for loans to build their own houses or get the ones built by the NHF.

“You can apply as an individual for an NHF loan to develop a land or buy directly from government consort or private estate developers,” it added. It is worth noting that the monthly NHF contribution is managed by the Federal Mortgage Bank of Nigeria, the country’s biggest mortgage institution. Hence, all loan requests are directed to the financial institution for approval and disbursement.

However, over the years, the NHF and FMBN have been accused by contributors of failing to live up to their core mandate of delivering affordable and modern houses.

FMBN was established in 1956, as the Nigerian Building Society, which was a joint venture of the Commonwealth Development Corporation and the Federal and Eastern Governments of Nigeria.

After the Federal Government undertook 100 per cent ownership acquisition of the NBS through the Indigenisation Act of 1973, it was renamed FMBN.

Back in February 2015, when a new management team was inaugurated, the Managing Director, Mr Gimba Ya’u Kumo, decried the poor financial base of the bank, noting that it cannot meet the larger part of demands for mortgage loans from various stakeholders at the moment.

He lamented that FMBN was grossly undercapitalised as against its counterpart in other countries in West Africa, stressing that an improved capital base will place the bank in a better stead to refinance mortgages.

He said, “For now, the only source of funding the bank has to meet the teeming demands of Nigerians is the National Housing Fund collection, which is minimal compared to the housing needs of Nigerians. Every worker is expected to contribute 2.5 per cent of the salaries to the fund and if you look at this sum, it is small compared to the housing needs of Nigerians.”

The inability to adequately provide housing funds, coupled with the paltry sum that trickles into NHF coffers and the alarming statistics of Nigerians living below the poverty level, put at about 95.1 million by the Bank of Industry as of August 2022, has no doubt, greatly contributed to the country’s inability to bridge its huge housing deficit.

In the BoI’s report, titled, ‘Institutional Turnaround for the Next Level,’ which puts the estimated housing deficit at 28 million units, it noted that about N21trn was required to fund Nigeria’s housing sector.

The bank noted that access to affordable housing for millions of Nigerians would become quite difficult amid a growing urban population, increasing construction costs and declining household income.

According to the Demographic Health Survey carried out in 2019, the number of households nationwide was put at 41.7 million (including 22.2 million in the urban areas).

Though the estimated population of Nigeria was pegged at 200 million people, as of 2022, it was estimated to be around 216.7 million, with an average rate of increase put at over two per cent between 1965 and 2022, according to Statista.

In a 2019 report sponsored by the Central Bank of Nigeria and authored by Dr. Emmanuel Moore, there is a high possibility that most Nigerians might be unable to afford their own homes, as only 10 per cent that desire to own a home could afford it, whether through outright buying or personal construction.

This presumption, to an extent, put the focus on the increasing number of slums and slum dwellers across the country.

In 2018, the World Bank in its report on the percentage of urban population living in slums put that of Nigeria at 54 per cent, while South Africa was pegged at 26 per cent, Cameroon at 34 per cent, The Gambia at 27 per cent, Ghana at 30 per cent, Senegal at 30 per cent and Zimbabwe at 34 per cent.

Meanwhile, the Habitat Country Programme document for 2017 to 2021, put the proportion of Nigerian urban residents living in slums at 69 per cent, with most noted to be residing in Lagos.

Ayomide Akinola, 40, also falls into the category of those who have lost hope in the scheme. His remittance to NHF began when he started working with one of Nigeria’s old generation banks in 2009.

The man, who was a lecturer at the Federal University, Oye Ekiti, Ekiti State, while sharing his not-too-palatable experience applying for a loan with PUNCH Investigations, said he still felt a sense of loss.

He recalled that in 2011, while working with the Nigerian Institute of Animal Science in Oyo State, he approached a branch of FMBN in Ibadan, and inquired about the possibility of accessing a housing loan.

However, the bottlenecks associated with getting a Certificate of Occupancy and the unending requirements made him lose interest.

He said, “I was told that before I can have a piece of land, I must have saved up to 10 per cent of the loan required, while the land in question must have a C of O. Part of the requirement was also that an account must be opened with a mortgage finance institution through which the money can be disbursed. I just gave up.”

The experience of another lecturer at the Federal University, Wukari, Taraba State, Samuel Alebiosu, was no different.

He revealed that after applying for an NHF renovation loan of N1m in 2017, which was specifically meant for contributors to refurbish their houses, he never got any positive response.

The lecturer, who claimed to have joined the institution in 2015, said after filling and submitting a form given to him, alongside other necessary documents required to access the loan, an NHF desk officer at the university told him to be hopeful.

“I still went to the desk officer to ask him last year and he told me to be expectant,” he added. Alebiosu, who has since renovated his house without the loan, said he still feels disappointed.

PUNCH Investigations discovered that to fast-track NHF loans, there are individuals that act as middlemen or a go-between that can make it a done deal or in the worst-case scenario, swindle an unsuspecting applicant

The case of Adefarati Animola, an Assistant Chief Programme Analyst with the Federal Medical Centre, Owo, Ondo State, falls into this category.

Tired of paying rent that kept eating into his savings, this civil servant in 2018, was so certain that once he applied for a loan of N5m through a third party, he would get it.

This made him reach out to one Opeodu Wale, an employee of the Ministry of Environment, Abuja, who promised to help him get the loan within two months of submitting his application.

Animola claimed he sent some title documents to him, including a land survey, official identity card, pay slips, as well as the sum of N90,000 for his service. But when in August 2022, the loan application was not granted, Animola demanded a refund, but Wale allegedly refused to acknowledge his messages.

Contacted, Wale, who was a former employee of the Office of the Head of the Civil Service of the Federation, Abuja, admitted that he collected N70,000 from Animola, noting that it was meant to fast-track the housing loan. He revealed that they met through a mutual friend and he only agreed to help him to obtain a C of O.

“He only sent N70,000 not N90,000 for the title document. I didn’t demand any N20,000 balance, nor has it been sent to me. I haven’t met the man before. I told him on the phone that I will send a copy of the C of O to him if he wanted it,” he said.

The Nigerian constitution forbids civil servants from receiving gifts or money as gratification. It explicitly warned that a civil servant must not put himself in a position where his personal interest conflicts with his duties and responsibilities.

The Fifth Schedule, Part I, section six (one), Code of Conduct for Public Officers General, Nigerian Constitution, only permits government workers to receive gifts from their relatives or personal friends.

“A public officer shall only accept personal gifts or benefits from relatives or personal friends to such extent and on such occasions as are recognised by custom: provided that any gift or donation to a public officer on any public or ceremonial occasion shall be treated as a gift to the appropriate institution represented by the public officer, and accordingly, the mere acceptance or receipt of any such gift shall not be treated as a contravention of this provision,” it stated.

Going by the law, charging Animola to assist him access the loan clearly contravened the code.

Wale, while speaking with our correspondent, revealed that he got involved in the business of helping people to fast-track NHF loans and to procure title documents, especially C of O, which he emphasised remained the most important document required.

“If you want to get a loan, the land document will act as collateral. If you have it already, you will not pay anything,” he added.

Wale, however, said he stopped helping people to facilitate NHF loans in 2019 and promised to refund Animola’s money.

“He sent me his account details a long time ago and I told him that if I am able to send the C of O, then I will only send N50,000 across to him.”

Findings by PUNCH Investigations showed that the tale is not all about gloom and doom, as amid the sad experiences are a few lucky beneficiaries that literally passed through the eye of the needle to secure a loan.

Among them is an officer with the Federal Road Safety Corps, Abuja, Ibrahim Shehu, who told our correspondent that he applied for a renovation loan in 2019, and got it within two months.

He, however, confessed that it was not without some difficulties.

Shehu, whose loan application was processed by the housing unit of FRSC, noted that the tiring administrative processes and late disbursement of funds were part of the challenges encountered by beneficiaries.

A former Managing Director of FMBN, Ahmed Dangiwa, while appraising his administration’s performance, gave a glimpse into how much the agency generates.

In a tweet on his Twitter handle @Arch_Dangiwa on May 19, 2022, he claimed to have left the sum of N120bn in the treasury of NHF and to have increased the funds he met from N42bn to about N78bn within his five years tenure.
Former FMBN DG, Ahmed Dangiwa said he generated 120bn into the NHF treasury between 2017 and 2022.

“I left N120bn in the coffers of the FMBN as of April 2022, when I left office. When we resumed in April 2017, we met only N42bn. That’s an increase of about N78bn in just five years,” he tweeted.

Dangiwa asserted to have mobilised 294.1bn to the NHF Scheme, disbursed N175bn in housing loans and construction finance, and added 927,000 contributors to the scheme, within five years.

In the face of Dangiwa’s grandiose success claims, many Nigerians still find it an arduous task to access the NHF loan, despite their monthly remittance running into billions.

The NHF loans, if properly disbursed and easily accessed, hold a high prospect of addressing the rising housing deficit in Nigeria, many experts have posited.

According to the International Human Rights Commission, the estimated housing deficit in Nigeria currently stands at 28 million.

The commission, while decrying the huge deficit, noted in July 2022 that records from the FMBN showed that Nigeria is troubled by its growing number of homeless people.

“Indeed, Nigeria faces a severe housing deficit. Estimates by the Federal Mortgage Bank indicate a deficit of at least 28 million housing units. While the deficit cannot be addressed within the lifetime of an administration,” IHRC stated.

Bridging the deficit gap across the country, the Federal Government revealed, would cost about N21trn.

The PUNCH reported in August 2022 that about 95.1 million Nigerians live below the poverty line and as such, it would be difficult for them to own homes.

In the report, the FG budgeted for housing N470bn in 2022, but the sector would require trillions of naira to close Nigeria’s housing gap.

Decrying the rigorous processes involved in obtaining the NHF loan, a real estate consultant, Olamide Obaro, said it has made many Nigerians lose hope in the scheme.

“One of the reasons why people can’t access NHF loans is the associated rigours and people get fed up,” he added.

He further noted that unwillingness on the part of the Federal Government to make adequate provisions for income earners to access the scheme as beneficiaries was another reason the housing deficit has continued to increase.

“Salaries earned by civil servants are barely enough to take care of their daily needs and wellbeing. The housing deficit is on the increase because the government has not provided adequate provisions for income earners. Money is not made available to them even after they have contributed to the scheme. The majority of Nigerians don’t have the resources to buy land, let alone build on it,” he said.
Olamide Obaro said the federal government’s inability to come up with adequate provisions for income earners was among the reasons Nigeria’s housing deficit has continued to increase.

Reacting to Dangiwa’s claim to have mobilised 294.1bn to the NHF coffers in five years, the Lagos-based consultant said that it was a problematic action denying people access to affordable housing and a factor likely to increase housing deficit.

“It is not appropriate for FMBN to have such funds in its possession, yet people are having housing issues. Those in charge of disbursing the funds are not doing what they should. Most times, the funds are not being disbursed as they should to the citizens,” he said.

Obaro expressed great concern over the government’s inability to provide financial assistance to developers, stressing that it is a major challenge confronting those in the sector.

“There is little or no help coming from the government when it comes to giving loans or grants to developers,” he lamented.

Responding to how beneficial the NHF scheme could be, Obaro said if it was effectively managed, it could bridge the country’s housing deficit and make housing available to many Nigerians.

He said, “The vision of every developer is to do what the government is not capable of doing, like provision of housing facilities and other basic amenities for the general public.

Aside from developers being able to achieve the vision, the society at large will benefit.”

He advised the government to make mortgage loans accessible to civil servants for them to easily access real estate.

Like Obaro, a public affairs analyst, Shoremekun Joseph, described the laid-down prerequisites to access a mortgage loan as difficult, particularly for civil servants. “The requirements to access a mortgage in their preferred areas is quite herculean,” he added.

Rather than reserving funds in the coffers of the NHF, Joseph advised the government to develop a friendlier scheme for easy access by Nigerians.
Shoremekun Joseph called on the government to come up with a relatable scheme that Nigerians can easily have access to.

He said, “The authorities should consider evolving a friendlier scheme that would see many NHF contributors having access to affordable houses, rather than keeping the money somewhere in the name of building reserve.”

A property lawyer, Emmanuel Odogwu, said to bridge the housing deficit, the Federal Government should disburse loans to applicants with an easy payment plan that can compete with that of the private sector.

He said, “Aside from giving out loans to people to buy property and build affordable houses, payment structure or plan should be made easy. There should be a departure from the usual routine of applying for a loan that would take years to get.” The legal practitioner called for a partnership between mortgage banks and the government as a way of making loans more accessible to Nigerians.
Property lawyer, Emmanuel Odogwu urged the government to develop and devise easy ways of making loans more accessible to Nigerians.

He cited the Lagos State government partnering private developers as an example that has helped to ensure that housing is made economical for residents.

“The Lagos State government is really trying to work with private developers to see how they can go into housing schemes and make it affordable to those that can’t afford the ones managed by private real estate companies.”

However, while noting that nothing substantial had been done in respect to such a partnership, Odogwu stated that he was optimistic that lots of paperwork and meetings were being held in the background.

The Group Head, Corporate Communications, Federal Mortgage Bank of Nigeria, Timan Elayo, while speaking with PUNCH Investigations, highlighted reasons some Nigerians, particularly civil servants, were unable to access the NHF loan.

She noted that despite FMBN’s effort to create awareness about the scheme, some remain uninformed.
Timan Elayo revealed that the FMBN is on a re-capitalisation and diversification drive aimed at reducing Nigerians’ housing deficit.

“They lack information about the loan windows available. There are still some people that don’t get to hear about it or pay attention when the information is being put out there,” she said.

She also claimed that civil servants close to retirement age have relatively poor income, citing it as another reason why they cannot access NHF loans.

Reacting to the claim by Dangiwa that he left behind 120bn in the coffers of the FMBN, Elayo said the inability of some Nigerians to access the loan was also due to insufficient funding.

“It is a basic fact that housing is highly capital intensive. That explains why the sum of 120bn, huge as it may seem, would be unable to reach every Nigerian. We are operating within the limit of the NHF collection that we are able to get from Nigerians.”

Elayo explained that on average, the time frame between processing to disbursement is 90 days, noting that the board meets every quarter to approve loans.

To reduce the housing deficit in Nigeria, Elayo revealed that the FMBN has plans to re-capitalise and diversify funds, to serve as a solution to the increasing housing deficit facing the nation.

She said, “Our plan to reduce Nigeria’s housing deficit include re-capitalisation of the bank to provide a solid base. We are looking into alternative sources of funding for the bank other than the national housing fund.’’