PRESIDENT AKUFO-Addo, yesterday, commissioned a 204-housing unit at Community 22 near Ashaiman, in the Greater Accra Region under the National Mortgage and Housing Finance (NMHF) initiative.
The project, which took nine months to complete comprised one, two standard and expandable unit bedrooms for public sector workers. GCB Limited will be underwriting the mortgages to public sector workers at rates far below market rate, and with longer tenor.
Speaking at the commissioning, President Akufo-Addo described the completion of the housing units as “one of the successes achieved during the two year pilot phase of the NHMF.”
He indicated that “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 lack of adequate long-term funding, high capital cost, high non-performing mortgage loans, restrictive banking regulations and high interest rates on mortgages have reduced the appetite for mortgage financing.
That, he said, was what informed the government’s decision to approve the NHMF initiative in 2018 with the aim of stimulating the local currency mortgage market.
“In operationalizing the initiative, the 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 NMS, mortgages are being underwritten at rates of 10% – 12% by the participating banks namely, GCB 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. Designed to eliminate the burdensome two-year rent advance system, it will give low income workers the opportunity to rent and eventually own homes, with a focus on apartments and inner-city rehabilitation.
“Government will therefore use this framework, the Affordable Housing REITs, to revive the affordable housing concept, and complete many of the abandoned housing units across the country started by the second President of the Fourth Republic, John Agyekum Kufour. The Affordable REITs will become the off-taker of the properties for the rent-to-own scheme,” he said.
President Akufo-Addo assured that the Ministry of Finance and Ministry of Works and Housing would also partner to speed up work on delivery of houses under the NMS and the Affordable Housing REITs Scheme, to promote investors interested in developing affordable houses in the country.
He indicated further that the Affordable Housing REITs was working with Tema Development Company to provide off-take for the renovated blocks at the TDC affordable housing enclave, Community 26, through the rent-to-own scheme to Ghanaians. The REITs is also working with Adom City Estates to provide off-take of more than 100 affordable housing units through the rent-to-own scheme.
“I must also mention that the NMS is working with Republic Bank Limited to procure 21 blocks or 150 units of the renovated Asokore Mampong Affordable Houses developed by SSNIT for the Ghana Medical Association (GMA),” he added.
By Charles Takyi-Boadu, Presidential Correspondent