President Nana Akufo-Addo, has commissioned 204 housing units, constructed in nine months, under the National Mortgage and Housing Finance Initiative.
Commissioning the housing units Monday, on day two of his tour of Greater Accra, President Akufo-Addo described the completion of the 204 housing units as “one of the successes achieved during the two-year pilot phase of the National Housing and Mortgage Fund (NHMF).” The project involves the construction of 204 houses, comprising one, two standard and expandable unit bedrooms for public sector workers.
GCB Bank Limited will be underwriting the mortgages to public sector at rates far below market rates, and with longer tenor. In his remarks, the President stated that the country has a huge housing deficit, which has risen over the years, especially in the urban areas.
“Despite an annual supply of about 40,000 housing units, we are unable to meet the annual demand of some 70,000 homes each year, and the housing deficit has now exceeded two million housing units,” he said.
The demand-side challenges of home ownership, President Akufo-Addo explained, include the lack of adequate long-term funding, high cost of capital and high non performing mortgage loans. In addition to restrictive banking regulations, high interest rates on mortgages have reduced the appetite for mortgage financing.
Desirous of fixing the demand–side challenges of home ownership, Government, in 2018, approved the National Mortgage and Housing Finance Initiative, with the aim of stimulating the local currency mortgage market. “In operationalising the initiative, the National Housing and Mortgage Fund (NHMF) was set up to pilot two schemes – the National Mortgage Scheme (NMS) and the Affordable Housing REIT’s (rent-to-own) scheme. The Fund is now working with players in the housing market, i.e. home buyers, developers and banks, to address the issues and create an enabling environment for a thriving housing market,” the President said.
Under the National Mortgage Scheme (NMS), mortgages are being underwritten at rates of 10%-12% by the participating banks namely, GCB Bank Limited, Stanbic Bank Ghana Limited and Republic Bank Ghana Limited. This intervention has indeed reduced mortgage rates by over 60%, compared to the average market rate of 28%.
The Affordable Housing REITs is promoting the rent-to-own scheme with only monthly rent payments and, after a period, the occupant has the option to own it.
On the other hand, the rent-to-own scheme will eliminate the burdened two -year rent advance system, and designed to give low-income workers the opportunity to rent and eventually […]
