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Lagos unveils new home ownership scheme

 Homes & Property    Tuesday, April 19, 2011

By Kingsley Adegboye

Faced with the ever increasing need to provide adequate and affordable housing for its teeming population especially those that fall within the low and medium income groups, the Lagos State Government has put in place a mortgage finance system to assist Lagosians meet their home ownership aspirations. The scheme is also expected to facilitate the creation of long term and sustainable wealth for the state government. Known as Lagos Home Ownership and Mortgage Scheme (HOMS), the home ownership scheme affords first time home buyers who are resident in Lagos State the opportunity to own their homes.


An estate in Lagos ... New scheme will ease ownership of such houses

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Apart from providing the pool of houses, the government will also provide the funds for the mortgage facility being granted, according to Mr. Shina Odunuga, the spokesman at the State Ministry of Housing.

Vanguard Homes & Property further learnt that although priority would be given to civil servants in Lagos State Ministries and Parastatals under the scheme, the target market is all residents of the state irrespective of state or tribe. The purpose of the scheme, Odunuga said, is to encourage first time home buyers with verifiable source of income to own their own houses.

To be eligible, applicants must reside in Lagos, they must be under 60 years, must have a verifiable means of income and must be credit worthy. Other conditions include: Successful applicants are expected to pay 30 percent of the value of the house they intend to purchase, houses purchased under the scheme must be occupied by the beneficiary and cannot be transferred or rented out until all obligations have been fulfilled; beneficiaries are to pay six percent interest rate on the mortgage loan. In addition to these, applicants must have been working for his/her current employer for at least six months and must be so confirmed by employer, and applicants must be first time home buyers.

While the scheme specifies a minimum tenor of 10 years and maximum of 20 years, the facility cost will be subject to the 70 per cent balance of the cost of the housing type purchased.

The Lagos State Government will first pre-qualify the intending beneficiaries who must be a first time home owners in Lagos State and the claim of first time home ownership must be administered under an Oath. The pre-qualified individuals must open an individual current account with Bank. The account will serve for both the purpose of paying 30 per cent equity contribution and also for monthly repayment.

"The beneficiary will submit his\her allocation paper from LASG to the bank along with request letter and apply for a mortgage scheme under Lagos State Home Ownership Mortgage Scheme.

Upon meeting the Risk Acceptance Criteria, approval will be conveyed via an offer letter and monthly repayment schedule communicated to the beneficiary.

"For proof of affordability, salary earners are to submit pay slips for the past six months and salary account statement for the past one year while self employed would submit company profile, three years audited account statement and business\personal account statement for the past 12 months.

Monthly repayment as stated in the repayment schedule commences as soon as offer is accepted and condition precedent to commencement of monthly repayment is met.

"The bank will communicate acceptance and approval to LASG for release of keys to the beneficiary to take possession. Update on monthly repayment will be given to LASG on monthly basis. A dedicated account will be opened which will warehouse all monthly payment from the buyers which would have joint signatories from the Ministry of Housing and Ministry of Finance", Odunuga said.