Becoming a homeowner is a major goal for most Nigerians. The relief of not having to pay rent or other bills associated with tenancy is usually one many look forward to.
With the teeming population in Lagos, housing has become a source of concern in the state. In a bid to curb this, the Lagos State government created the Lagos State Home Ownership Mortgage Scheme.
What is the Lagos State Home Ownership Mortgage Scheme
The Lagos State Home Ownership Mortgage Scheme was created by the Lagos State government to help indigenes become homeowners. The scheme is aimed at encouraging first time home buyers to become homeowners with a verifiable and legitimate source of income.
The three banks selected to further the scheme are FBN Mortgages, Skye Mortgages and Zenith Bank Plc. The scheme has certain features such as;
- Down payment of 30% of the property cost.
- Minimum tenure of 10 years and maximum of 20 years.
- A fee of 10,000 for civil servants and 25,000 naira for others termed as “admin charge”
- Deed of mortgage acts as security over the property to be bought.
- The repayment plan involves an equal periodic principal repayment with interest to be paid on the reducing balance or an equal monthly installment of both principal and interest.
How to apply for the Lagos State Housing Scheme
To be eligible for the mortgage scheme, you must meet certain criteria which are;
- You must reside in Lagos.
- You must be under 60 years of age.
- You must have a confirmatory and verifiable source of income.
- You must have been working for more than six months with your current employer and must provide proof.
- As a beneficiary, you are to pay a 6% interest rate on the mortgage loan.
- You cannot transfer ownership or rent out the property acquired until you have fulfilled all obligations concerning the property.
- If your application is successful, you are expected to pay 30% of the cost of the property you are acquiring.
- You must also be a first time home buyer
Process for applying for the Lagos State Home Ownership Mortgage Scheme;
- Interested applicants must obtain a form from the Ministry of Housing or download form from the Lagos State Government website.
- Applicants should fill the form and submit to the Ministry of Housing accompanied with payment of N1,000 for the Application Form.
- Applicants who have submitted his/her application forms will be directed to any of the three receiving banks for pre-qualification.
- All applicants pre-qualified and recommended by any of the receiving banks will be issued with the Letter of Offer.
- Applicants are expected to pay the 30% equity contribution to any of the three collaborating banks.
- Applicants are to submit proof of payment and an acceptance letter to the Ministry of Housing.
- The Ministry of Housing refers documents to the Ministry of Justice to prepare and execute the Contract of Sales and Deed of Mortgage Agreements.
- The Ministry of Housing then releases the Letter of Confirmation of Allocation and keys to successful applicants.
- Lagos State Government will first pre-qualify the intended beneficiary who must be a first time home owner in Lagos State and the claim of first time home ownership must be administered under an Oath.
- The pre-qualified individual must open an individual current account with any of the selected banks. The account will serve for both the purpose of paying 30% equity contribution and also for monthly repayment.
- The beneficiary will submit his\her allocation paper from Lagos State government to the bank along with a request letter and apply for a mortgage scheme under Lagos State Home Ownership Mortgage Scheme.
- Upon meeting the Risk Acceptance Criteria tabulated below, 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 6 months and salary account statement for the past one year while self-employed would submit company profile, three years audited account statement and business or 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 the Lagos State government for release of keys to the beneficiary to take possession.
- Update on monthly repayment will be given to the Lagos State government on monthly basis.
- A dedicated account will be opened which will warehouse all monthly payments from the buyers which would have joint signatories from the Ministry of Housing & Ministry of Finance.
The Ilubirin Project
The Ilubirin Foreshore Housing Project is a public housing project on about 15 hectares of reclaimed land at the foot of the Third Mainland Bridge. The project is being developed by the Ilubirin Foreshore Projects Limited which is a joint venture between the Lagos State Government and the First Investment Development Company.
The design proposal of the project was approved through the Lagos State Home Ownership Mortgage Scheme. The project is set to accommodate not just residential buildings but also schools, offices, medical centers, recreational centers and so on. The project was also created by the government to turn more residents of Lagos State into home owners.
The Lagos State Home Ownership Mortgage Scheme is a laudable venture by the Lagos State government for residents of the state. Although you must meet the stipulated criteria to apply.
At MKH, we have a wide range of properties you can purchase to also become a homeowner. These properties are strategically positioned and specially designed to suit your needs and budget. You can contact us here for more details.