The Central Bank of Nigeria (CBN) has released the framework for the implementation of Family Homes Financing Initiative (FHFI), which is targeted at providing 300,000 homes across the 36 states of the country.
The initiative is also expected to create more than 1.5 million direct jobs in five years with a N200 billion funding.
According to the framework posted on the CBN’s website, the facility will enable Family Homes Funds Limited (FHFL), which is the only eligible obligor to implement the federal government’s Social Housing programme as part of the Economic Sustainability Plan 2020.
The framework was also designed to utilise at least 90 per cent locally manufactured inputs and as a result conserve foreign exchange. It would be funded at an interest rate that does not exceed five per cent per annum.
It stated that the programme deliberately aims to revitalise local manufacture of construction materials including doors and windows, ironmongery, sanitary fittings, concrete products, tiles, glass, electrical fittings/fixtures and bricks. It is also estimated that the programme would require up to 1.7 million doors, seven million door hinges and locks etc.
Most of those to be directly impacted by the project it stated currently live in informal settlements with shared facilities in unsanitary environments as the project is targeted towards people on low income level across the country.
The framework added: “Funds would be released to FHF on project basis subject to the cumulative maximum limit of N200 billion. A project is defined as cluster of homes in the same geographical location and covered with the same title documents and approvals.”
Term loan which would enable FHF finance the construction of social housing units for people on low income, will have a tenor of three years from date of disbursement and an interest rate of five per cent.
It further stated: “The Development Finance Department of the Central Bank of Nigeria shall be responsible for the management of the intervention facility. The CBN shall provide the funding for the initiative; appoint Technical Advisor with requisite skills in Housing Construction and Financing; release funds to the FHF on the recommendation of the TA; carry out periodic verification and monitoring of projects financed; and review the framework as may be necessary from time to time.
“Family Homes Funds (FHF) shall ensure prudent utilisation of facility for the purpose for which it was granted; adhere strictly to the terms and conditions of the Facility; keep up-to-date records of developments on each project site; allow access to the project and records by the CBN and technical adviser; repay the facility in accordance with the approved repayment schedule; and comply with the provisions of the Loan Agreement and the Framework.
“The Federal Ministry of finance shall issue guarantee to the FHF in respect of the facilities granted under the initiative; partner the CBN and the TA in monitoring the project till full repayment and comply with the provisions of the Framework.”