The Acting Managing Director of the Family Homes Funds, Mr. Kola Ogunsulire, has stated that the Family Homes Funds was established to help drive affordable housing in Nigeria.
Speaking during a session titled “Housing Finance Solutions and Strategies” at the recently concluded 11th Abuja Housing Show, which held on 17th to 19th of July 2017, at the International Conference Centre, Abuja, he said that a sustainable model is needed to create a private sector entity; a sustainable model being a profitable one. In his words, “If you are going to create a private sector entity, that means you must develop a sustainable model, otherwise the private sector will not participate, and a sustainable model ultimately means a profitable one that matches returns that you can get in an economy.”
While stating that a lot of research has gone into making sure that homes are affordable to Nigerians by the Family Homes Funds, he said, “If our product must go into the market, it has to be affordable, and what is the definition of affordable? We had to start with what people can afford. We went through a study by KPMG and it was clear to us that for the bulk of the market, if you must work backwards, your homes ultimately need to be in the N2.5M to N5M range. That was what our studies showed.”
Ogunsulire further stated that in other to properly understand the whole housing value chain, the Family Homes Funds’ in-house team have had to engage developers at various levels, and five processes, which are the cost of land, cost of titling, direct cost of the house, the cost of infrastructure and the cost of financing had to be properly looked into. This prompted the purchase of houses using a Bulk Procurement Strategy.
The Family Homes Funds, according to Ogunsulire is already in discussions with PFAs and the international community with the whole idea of creating a fund that attracts money from different sources. The Fund is also expected to fund two aspects of the housing business, which are the provision of construction finance on one hand and mortgage finance on the other. These will be done at an affordable interest rate.
The Family Homes Fund (“the Fund”) is an innovative private sector driven financing solution to Nigeria’s housing challenges. An initiative of the Federal Ministry of Finance and established in September 2016, the Fund is expected to bridge the huge housing deficit which is estimated at 17 million and which increases by 900,000 per annum.
The Fund operates as a Public Private Partnership and targets to raise ₦1 trillion, starting with ₦500 billion will be structured as a Real Estate Investment Trust (REIT). This will be professionally managed to catalyse funds from the private sector, pension funds, insurance funds, multilateral agencies and impact investors.