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President Nana Akufo-Addo has commissioned 204 housing units, built in nine months, under the National Mortgage and Housing Finance Initiative.
Commissioning the housing units on Monday, on the second day of his Greater Accra tour, 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 includes the construction of 204 houses, comprising one, two standard and expandable rooms for public sector workers.
GCB Bank Limited will underwrite the public sector mortgages at rates well below market rates and with a longer term.
In his words, the president affirmed that the country has a huge housing deficit, which has increased over the years, especially in urban areas.
“Despite an annual supply of around 40,000 housing units, we cannot meet the annual demand for about 70,000 homes each year, and the housing deficit has already exceeded two million housing units,” he said.
Challenges on the demand side of homeownership, explained President Akufo-Addo, include a lack of adequate long-term financing, high cost of capital and high delinquency on mortgage loans.
In addition to restrictive banking regulations, high interest rates on mortgages have reduced the appetite for mortgage financing.
Eager to solve the challenges on the demand side of home ownership, the Government approved in 2018 the National Initiative for Mortgage and Housing Financing, with the aim of stimulating the mortgage market in local currency.
“By putting the initiative into operation, the National Housing and Mortgage Fund (NHMF) was created to test two schemes: the National Mortgage Scheme (NMS) and the REIT (Rent to Own) Affordable Housing scheme.
The Fund is now working with players in the housing market – that is, home buyers, developers and banks – to address the issues and create an environment conducive to a thriving real estate market, ”said the President.
Under the National Mortgage Scheme (NMS), mortgages are underwritten at rates of 10-12% by participating banks, namely GCB Bank Limited, Stanbic Bank Ghana Limited and Republic Bank Ghana Limited.
In fact, this intervention has reduced mortgage rates by more than 60%, compared to the average market rate of 28%.
The affordable housing REITs are promoting the rent-to-own scheme with only monthly rental 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 rental advance system and be designed to give low-income workers the opportunity to rent and eventually own homes, with a focus on apartments and the rehabilitation of slums. .
“The government will therefore use this framework, the affordable housing REITs, to revive the concept of affordable housing and complete many of the abandoned housing units across the country started by Second President John Agyekum Kufour.
The affordable REITs will become the buyer of the properties for the rent-to-own scheme, ”said President Akufo-Addo.
President Akufo-Addo assured that the Ministry of Finance and the Ministry of Works and Housing will also partner to accelerate work on the delivery of homes under the National Mortgage Scheme and the REIT Scheme for Affordable Housing, to promote investors interested in develop affordable housing in the country.
He further noted that the affordable housing REITs are working with Tema Development Company to provide the purchase of the renovated blocks in TDC’s affordable housing enclave, Community, 26 through the Ghanaian rent-to-own scheme.
The REITs are also working with Adom City Estates to offer the sale of more than 100 affordable housing units through the rent-to-own scheme.
“I should also mention that the National Mortgage Scheme (NMS) is working with Republic Bank Limited to acquire 21 blocks or 150 units of the refurbished Asokore Mampong Affordable Homes developed by SSNIT for the Ghana Medical Association (GMA),” he added.
With four more for Nana and the New Patriotic Party, President Akufo-Addo assured that “the government, starting in 2021, will use this framework to help more private developers to build model communities across the country and expand schemes to cover to all Ghanaians. “
