After more than one year of uncertainty that beclouded the operations of the Lagos Home Ownership Mortgage Scheme (LagosHOMS), which had created a home ownership window in the state, authorities of the state government have, at last, come up with a Rent-to-Own housing scheme, raising fresh hope for homeownership for low-income residents.
Lagos had, early in 2014, under former Governor Babatunde Fashola, launched the LagosHOMS, the state government’s intervention aimed to enable more residents to own their own (first) homes through a mortgage scheme that offered mortgage package at a single-digit interest rate and for 10 years repayment tenor.
The low point of the scheme, despite its considerable merits, was the 30 percent equity contribution successful applicants were required to make before they were given the mortgage facility. “It is not easy for a winner of a three-bedroom flat, under the state government’s present housing scheme, to make an initial payment of about N5 million, for instance, before spreading the balance through monthly payments”, Governor Akinwunmi Ambode noted while considering the new housing scheme.
Under the new scheme, rather than making applicants for the home scheme emerge via a monthly draw and also making 30 percent equity contribution, successful applicants would now pay only 5 percent of the cost of the flat. The balance of 95 percent is then spread over a period of 10 years.
This means that an applicant for the Igando scheme, for instance, where a three-bedroom apartment goes for N6 million, is expected to make N300,000 equity contribution and the N5,700,000 balance is spread over 10 years, paying the amount as rent.
ALSO READ: How to Get Your Dream Home by Paying Rent
The housing schemes being offered for the Rent-to-Own are the Sir Michael Otedola Estate in Epe, consisting of a room and parlour apartment as well as 1 and 2 bedroom bungalows, and the LagosHOMS housing estate at Igando in Alimosho, consisting of 1, 2 and 3 bedroom flats, and the Oba Adeboruwa Estate in Ikorodu, all consisting of 1 and 2 bedroom flats.
Gbolahan Lawal, the state’s commissioner of housing, told BusinessDay that during the 10 years period, the homeowner would be expected to pay the 95 percent balance as normal monthly rent.
This new policy has been introduced by the Governor Ambode-led administration to make housing readily available to the teeming population of the state, and expectation is that it will ensure that more people that would not have been homeowners are accommodated.
“It is a system whereby prospective homeowners make 5 percent down payment, take possession and pay up the balance as rent towards ownership of the property over a period of 10 years,” Gbolahan said. As the policy is aimed at bridging the state’s housing deficit estimated at 2.55 million in the next 10 years, and also sensitising the citizens to own homes with just 5 percent of the value of the house they want to buy.
Lagos has an estimated population of 20 million people and about 30 percent of this population, representing about 900,000 people, cannot on their own affordable homes and therefore require some form of ‘cheap’ housing with government’s heavy input.
A recent report on ‘The State of Lagos Housing Market’ which puts the housing deficit in the state at 3 million, notes that about 80 percent of the residents lives in rented accommodation, pointing out that the state government needs to build consistently 187,000 housing units annually for the next 15 to 20 years to close its housing demand-supply gap.
ALSO READ: 5 Top Mortgage Institutions in Nigeria
The commissioner explained that interested applicants to the new Rent-to-Own scheme were expected to pick up forms at the state Ministry of Housing, LagosHOMS Office, Lagos Building and Investment Company (LBIC) building or download the form online with the payment of N10,000 and submit same, on completion, to any of the offices.
The scheme is, however, not without conditions as a document sighted by BusinessDay listed eligibility to include residency in Lagos with the Lagos State Resident Registration Card as a proof, tax compliance, first-time buyer status, minimum of 21 years and a maximum of 33 years of age.