President Nana Addo Dankwa Akufo-Addo Monday commissioned 204 housing units at Community 22, Tema.
The project, a pilot initiative of the National Mortgage and Housing Finance (NMHF), comprises one and two standard and expandable unit bedrooms for public sector workers.
Government, in 2018, approved the National Mortgage and Housing Finance Initiative, to stimulate the local currency mortgage market, and address the demand-side challenges of home ownership in Ghana.
The houses would be given to sector workers on a rent-to-own basis, with only monthly rent payments, and after a period, the occupant has the option to own the property. GCB Bank Limited will be underwriting the mortgages to the public sector at rates far below market rates, and with longer tenor.
At a ceremony at Tema, President Akufo-Addo indicated that despite an annual supply of about 40,000 housing units, the country was unable to meet the annual demand of some 70,000 homes each year, driving Ghana’s housing deficit to over two million units.
He noted that the demand-side challenges of home ownership, the lack of adequate long-term funding, high cost of capital, and high non-performing mortgage loans, in addition to restrictive banking regulations, high interest rates on mortgages had reduced the appetite for mortgage financing.
The President described the completion of the 204 housing units as one of the successes achieved during the two-year pilot phase of the NHMF.
He said that in operationalizing the initiative, NHMF was set up to pilot two schemes – the National Mortgage Scheme (NMS) and the Affordable Housing REIT’s (rent-to-own) scheme.
The Fund is now working with players in the housing market, i.e. home buyers, developers, and banks, to address the issues and create an enabling environment for a thriving housing market.
Under the NMS, mortgages are being underwritten at rates of 10 to 12 percent by the participating banks namely, GCB Bank Limited, Stanbic Bank Ghana Limited, and Republic Bank Ghana Limited. Mortgage rates have been reduced by over 60 percent, compared to the average market rate of 28 percent as a result of the initiative.
President Akufo-Addo noted that the rent-to-own scheme would eliminate the burdened two-year rent advance system, and designed to give low-income workers the opportunity to rent and eventually own homes, with the focus on apartments and inner-city rehabilitation.
He said the government would leverage the Affordable Housing Rent-to-own framework to revive the affordable housing concept and complete many of the abandoned housing units across the country.
President Akufo-Addo assured that the Ministries of Finance, Works and Housing would partner to speed up work on the delivery of houses under the National Mortgage Scheme and the Affordable Housing Rent-to-Own Scheme, to promote investors interested in developing affordable houses in the country.
He disclosed that the Affordable Housing REITs was working with Tema Development Company to provide off-take for the renovated Blocks at the TDC affordable housing enclave, Community, 26 through the rent-to-own scheme to Ghanaians.
The REIT is also working with Adom City Estates to provide off-take of more than 100 affordable housing units through the rent-to-own scheme.
“I must also mention that the National Mortgage Scheme (NMS) is working with Republic Bank Limited to procure 21 blocks or 150-units of the renovated Asokore Mampong Affordable Houses developed by SSNIT for the Ghana Medical Association (GMA),” he added.
The 204 housing units were built in 9 months.