Lagos-HOMS: Fashola may waive 30% equity contribution for informal sector

In a move to galvanise residents’ interest in the Lagos Home Ownership Mortgage Scheme (Lagos-HOMS), Governor Babatunde Fashola on Tuesday hinted of plans to introduce what he called ‘rent to own’ which may see the government waiving the initial 30 percent equity contribution for the homes. The initiative is targeted at the informal sector players.

There seemed to have been a general apathy towards the Lagos-HOMS since it was unveiled in April this year by the government.

So far, less than

200 units of the houses have been subscribed to by the public. With three draws so far held in April, May and June, 600 units of the homes ought to have been sold, as 200 units are put up for sale every month. Lagos, a mega city, with population estimated at over 20 million people is said to be having a housing deficit of about two million.

A major complaint against the home scheme has been the pricing which range between N4 million (one bedroom flat) and N32 million (three bedroom flat) depending on the location and the 30 percent equity contribution.

Analysts are of the view that government should focus on social housing which is affordable to the people. Majority of the homeless in Lagos are in the informal sector living below the poverty level with less than two dollar a day.

But Fashola at an interactive session with artisans, market men and women, taxi and commercial bus drivers in Ikeja, on Tuesday, said the government is planning a new strategy that will waive the 30 percent equity contribution in what is tagged ‘rent to own’ to encourage residents in the informal sector participate in the Lagos-HOMS.

According to Fashola, investigations recently conducted by his team showed that most people in the informal sector can afford the mortgage scheme, going by their monthly income and profit, adding that the ‘rent to own’ initiative would further make the scheme affordable for all and sundry.

Bosun Jeje, the state commissioner for housing, told BusinessDay that the new initiative will soon be unveiled.

“We are not going to waive the 30 percent equity contribution entirely. But by the time we announce the new programme which we call ‘rent to own,’ the 30 percent upfront contribution will be initially stepped down. It will now be in the form of your rent,” Jeje said.

On why the government is introducing the new initiative, he said, “We discovered that only the formal sector can boast of salaries every month for 30 percent equity contribution. So we looked at the informal sector and we said let us call the informal sector, all of us are paying taxes, we cannot all be collecting salaries, that formed the basis of today’s meeting. The informal sector must also benefit from Lagos-HOMS, they don’t have a salary, they don’t have a structure that they can rely on, we have to call them and then make an arrangement of how they will benefit from this scheme.”

BusinessDay