Housing Finance in Ghana: Can Community Mortgage Cooperatives Provide a Panacea?

Abstract

There is insufficient housing in Ghana. Available houses are mostly poorly developed and lack the basic amenities required to make them habitable. The growth of households is in excess of housing growth resulting in housing deficit in the country. The formal finance institutions have supplied very little mortgages to households in Ghana. This paper explores the opportunity of employing Community Mortgage Cooperatives (CMC) to raise domestic funds from people who require housing for housing investment in Ghana. It does so by surveying the literature on housing finance. It also evaluates the housing finance system in Ghana to ascertain the availability of formal finance to households in the country. It found that the housing finance systems in Ghana are inadequate resulting in inadequate and poor housing consumption by many Ghanaians. It also found that the principles behind community mortgage cooperatives are non-alien to Ghanaians. What is needed is the restructuring and formalization of the system. It recommends the proper establishment and management of Community Mortgage Cooperatives as a way of mobilizing housing funds domestically to address the low and poor housing consumption by most Ghanaian households.

KEYWORDS: Affordable Housing, Mortgage Underwriting, Housing Finance Systems, Collateralized Lending, Cooperatives