Government To Scale Up National Housing Mortgage Finance

Freda Prempeh

The government of President Akufo-Addo intends to scale up the National Housing and Mortgage Finance Scheme (NHMFS) after a successful pilot phase in Tema to provide extensive construction of residential housing across the country, Minister of State-designate for Works and Housing, Freda Prempeh, has said.

According to her, under the NHMFS the interest rate will be between 10% and 12% to address constraints to home ownership by Ghanaians either through access to mortgages to buy homes by low to middle income earners and high cost of financing for the construction of residential homes or ensuring sustainability in the opportunity to own homes by a large segment of Ghanaians.

The government, through the 2018 Budget and Economic Policy, approved the establishment of the NHMFS to provide construction of residential houses in the country with the aim to promote social equity and stimulate the economy.

The growing Ghanaian population has continued to widen the housing deficit, which is estimated at two million housing units, and the NHMFS is one of the government’s interventions to address the housing deficit situation in the country by providing affordable housing, especially for public sector workers.

Taking her turn at the vetting of the Appointments Committee of Parliament on Thursday, Mrs. Prempeh, who is the NPP MP for Tano North Constituency in the Ahafo Region, said some people, including teachers and nurses, had started acquiring some of the housing units put up in Tema through the piloting of the mortgage financing scheme by the government.

“As for the mortgage financing (existing schemes) it is quite difficult for me to sit here and say that we can do this or do that because the local banks definitely will want to work on returns on an investment,” the Minister-designate noted.

“People find it difficult to source funds through mortgages because of the interest rate. And because of education some people will tell you that why do I not find money to pay outright than to pay with so much interest for this number of years,” she added.

She, however, said the NHMFS, which was a concept and strategy developed two years ago by the Akufo-Addo-led administration, was intended  to facilitate cheaper local currency mortgage loans to workers and construction finance to real estate developers to encourage the building of communities across the country.

She disclosed that currently the government, through the NHMF, had partnered three banks and named GCB Bank, Stanbic Bank and Republic Bank to deliver cedi mortgages at affordable interest rates (between 10% and 12%) to public sector workers.

“Most of the time the interest rate affects the payment, but looking at the national one which the President intends to roll further, I believe that a lot of people will be able to tap into it and acquire houses through the mortgage financing from the Ministry of Finance and other local banks which stands between 10% and 12% interest rate,” she stressed.

Madam Prempeh disclosed that the extensive affordable housing projects, which the government intends to roll out, would encompass construction of residential housing in rural communities, right from the constituency level through district level to regional level and national level.

“As a ministry, we will still collaborate with the Ministry of Local Government and Rural Development and all the other sector ministries to roll out affordable housing for the sector ministries,” she indicated.

“I am even looking at Korle-Bu; for instance there is this flat at Korle-Bu called Nkrumah Flat, and it’s been there for ages and people are just encroaching. We can do a lot of redevelopment there and cede it to the Ministry of Health.

“We can do the same in the various constituencies, having had some collaboration with the Ministry of Education, Ministry of Health and Ministry of Defence, and collaborate with the MMDAs,” she told the committee.

According to her, land acquisition in the rural constituencies tends not to be difficult unlike the capital cities, and intimated that “I believe that if we start rolling out the concept the traditional authorities will come to our aid.”

By Ernest Kofi Adu