The Federal Mortgage Bank of Nigeria (FMBN) has secured a N100 billion Offtaker Guarantee to support the development of the Karsana Renewed Hope City in Abuja.
The Renewed Hope Cities, located in the Federal Capital Territory (FCT), Lagos, and Kano, are part of a Public-Private Partnership (PPP) agreement under the Renewed Hope Cities and Estates Programme, designed to address Nigeria’s housing deficit.
The announcement was made by the Minister of Housing and Urban Development, Musa Dangiwa, during a presentation at the State House Gallery, Aso Villa, on Sunday.
Dangiwa highlighted that the guarantee has already enabled developers to mobilize over N40 billion in financing, marking a major milestone in efforts to tackle the country’s housing challenges.
“The Ministry has facilitated a N100 billion Bankable Offtaker Guarantee by the Federal Mortgage Bank of Nigeria (FMBN) for the Karsana Renewed Hope City. This has enabled developers to mobilize over N40 billion in financing—a first in the history of Nigeria’s housing sector,” the Housing Minister stated.
He added, “The biggest intervention has been the N100 billion Bankable Offtaker Guarantee that the Bank has provided for the Renewed Hope Cities project.”
Dangiwa emphasized that the Offtaker Guarantee is essential for supporting developers of the Renewed Hope Cities, addressing challenges such as high land costs and double-digit interest rates on construction financing. He noted that the guarantee not only mitigates financial risks but also ensures timely delivery of projects while making housing units more affordable for low- and middle-income earners.
More insight
In addition to the intervention for the Renewed Hope Cities project, Dangiwa highlighted other efforts by the Federal Mortgage Bank of Nigeria (FMBN) to boost housing delivery nationwide.
- He disclosed that between May 2023 and the present, FMBN has disbursed N59.3 billion in housing loans, constructed 2,465 housing units across various locations, and created 61,625 decent-paying construction jobs.
- The Housing Minister further noted that under the current administration, the bank has also provided single-digit long-term loans, home renovation loans, and rent-to-own options for 17,980 Nigerians contributing to the National Housing Fund Scheme.
- Other interventions include Cooperative Housing Development Loans and Individual Construction Loans, both offered at concessionary rates to enhance affordability.
Additionally, FMBN has introduced an innovative Rent Assistance product to help qualified Nigerians manage rent payments by spreading the repayment over 12 months through affordable monthly installments.
What you should know
The Renewed Hope Estates and Cities Programme was launched in February 2024 with the flag-off of the 3,112 housing unit Renewed Hope City project in Karsana District, Phase 3, Federal Capital Territory, Abuja. This ambitious initiative is designed to address Nigeria’s housing deficit.
- A cornerstone of the programme is the delivery of 100,000 housing units nationwide through a Public-Private Partnership (PPP) model. Under this framework, developers take on the responsibility of sourcing land and securing construction financing, while the government provides an enabling environment to support project execution and ensure successful housing delivery.
- As part of this initiative, Renewed Hope Cities are being developed in the Federal Capital Territory (FCT), Lagos, and Kano to provide high-quality, affordable housing.
- The programme incorporates an affordability framework that ensures a balance between commercial viability and social impact.
While some housing units will be sold at market rates, a significant portion is offered at concessionary rates to low- and middle-income Nigerians, including members of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC).
