The Kaduna State Government and Sterling Bank have agreed to jointly fund a N5bn mortgage scheme to facilitate home ownership in the state. The fund will provide mortgages at single-digit interest rate.
Umma Aboki, the Special Adviser on Economic Matters to the governor of Kaduna State and Garba Mohammed, Group Head of Non-Interest Banking of Sterling Bank announced the new mortgage initiative at a press briefing in Kaduna today.
Kaduna State is facilitating investments in the provision of mass housing to encourage more people to own homes, we also have to support the demand side through mortgage financing.
Kaduna State has executed a Memorandum of Understanding with Sterling Bank to provide the mortgages at 9.5% per annum.
Both parties will each contribute 50% of the mortgage fund which is billed to reach N5bn for onward lending to aspiring home owners.
The single-digit interest rate on the mortgage product is achieved by Kaduna State sacrificing the interest on its own part of the deposit.
50% of the mortgages will be used to support house purchases below N20m, while home purchases valued up to N30m will get 30% of the funding. The balance of 20% will support home purchases above N30m up to a limit of N60m.
The mortgages will require beneficiaries to make security deposits of between 15 to 30% of the value of the houses they intend to purchase, but all mortgages must be liquidated within 10 years.
successful bidders in the sale of government houses programme can apply for the mortgage facility to help pay for the houses.