Government in its 2007 Budget mandated HFC bank to provide housing units for public sector workers. How has the scheme fared three years down the lane.
HFC Bank in collaboration with some real estate developers has provided 270 two- bedroom housing units for public sector workers under the bank’s Public Sector Home Scheme.
Delivery of the houses, which has the support of the government through the creation of a GHC 12 million market for the houses started in 2008.
The government funding enabled HFC Bank to finance real estate construction firms put up the 270 housing units in record time. The houses were then passed on to qualified public sector workers in 2008 through a mortgage scheme administration by the country’s first mortgage and real estate finance company.
The General Manager in charge of Mortgage and Consumer Loans of HFC Bank, Mr Charles Bonsu, told the GRAPHIC BUSINESS that the scheme performed very well in the initial year when the first 270 set of homes were constructed and were all acquired by public sector workers.
Public sector workers, who mostly do not benefit from mortgage facilities due to inability to meet requirements and high cost of housing units, therefore, relied on this scheme to acquire their houses.
To qualify for this facility, the applicant must be an employee working in the public sector for a minimum of five years, with an income of GHC260 or more while the applicant must also have 20 or more years to work to pay off the loan.
Previously, the bank was gave out GHC 25,000 to each applicant who met their requirement but it had to be reviewed to GHC30, 000 with an interest of a between 11 per cent per annum and a maximum of 15 per cent to be paid back in monthly installment over a period of 20 years. The interest rate is however pegged at 13.34 per cent currently with a possibility of being reviewed soon.
Mr Bonsu was however lost for words why developers in subsequent years showed little or no interest to partner the bank to deliver the houses to the workers.
“The interest from developers has dwindled after the first sets of houses were constructed in 2008. But the bank makes some disbursement once in a while based on the public worker’s own contact with some real estate developers who construct houses worth GHC30,000”, he said.
He however lauded the efforts of some estate development firms who have contributed significantly to the scheme with the construction of two- bedroom housing units for applicants.
He paid glowing tribute to companies such as Darmax Construction Limited, Blue Rose Construction and GHS Housing and a couple of other companies. The projects are mostly found in Kasoa and Kuntunse on the Accra- Nsawam Road.
Projecting into 2012, Mr Bonsu stressed that the bank will continue to improve on the quality of loans, expand the public sector programmes, get more developers on board as well as help qualified persons to acquire housing units.
He also added that the government had promised to increase the facility so that the scheme would be extended to other public sector employees beside the initial pilot group.
Although this scheme has been successful, it faces several challenges, due to its high demand as well as the supply side, which has been compounded by developers’ unwillingness to participate in the scheme.
The Public Sector Home Scheme disburses funds provided by Government as loan facilities to public sector employees to enable them to own affordable houses. The categories of workers include teachers, health workers, security personnel as well as civil servants at ministries as well as civil servants at ministries, departments and agencies.
The Minister of Finance and Economic Planning, Dr Kwabena Duffuor, indicated in the 2012 budget that the government would continue to support the Public Servant Housing Loan Scheme to offer loans to 129 civil and public servants in 2012.
According to the budget provision, the funding was geared towards helping public servants to
either complete their two- bedroom housing units under construction or also support the construction of about 190 new housing units at various stages of completion.
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