FG kicks off N1trn 20-year mortgage financing

The N1trillion Ministry of Finance Incorporated Real Estate Investment Fund (MREIF) has kicked off to boost home ownership among Nigerians. The fund was designed to provide low-cost mortgage options, particularly for pension account holders, enabling a broader segment of the population to own homes. The 1 trillion fund which kicks off with an initial capital […]

The N1trillion Ministry of Finance Incorporated Real Estate Investment Fund (MREIF) has kicked off to boost home ownership among Nigerians.

The fund was designed to provide low-cost mortgage options, particularly for pension account holders, enabling a broader segment of the population to own homes.

The 1 trillion fund which kicks off with an initial capital of N250bn is a 20-year long mortgage with 12 per cent interest rate.

ARM Investment Managers, the Managers of the fund, at a briefing in Lagos yesterday said the fund aims to address Nigeria’s housing deficit and create a more accessible and sustainable homeownership system.

Biyi Adekunbi of ARM stated that the fund is open to every eligible Nigerian to have access to low rate, long term financing for acquisition of properties.

He disclosed that the application process has commenced with an applicant going to fill out the form online via the MREIF portal which the ARM has created.

He said the fund allows for flexible financing and pension-backed mortgage options to ease homeownership.

The application process, he explained, involves five stages including expression of interest, verification, mortgage pre-approval, home selection through a list of vetted properties and final approval and disbursement.

He disclosed that an individual could access a minimum of N45m to N50m and a maximum of N200m.

Adekunbi said, “We are talking of mortgages at 12 per cent for up to 20 years which would be issued through eligible financial institutions who would be pre-qualified.”

According to him, due to rising inflation most developers are unable to complete their projects resulting in undue losses.

“What the MREIF will do is the provision of off-take guarantees to these developers which would serve as a credit enhancement. This would enable them to approach construction lenders to raise construction finance for the development of residential homes,” he said.

He disclosed that the platform which has been designed for the application process holds a wide range of properties estimated at over 2000 housing units, saying home-buyers would have the opportunity to assess their eligibility criteria through the platform.

Adekunbi explained that the fund is targeting first-time home owners in urban areas where there is huge housing deficit including Lagos, Abuja, Kano, Port Harcourt, Enugu, Abia, among others.

“For those who want to apply for the 25 per cent of their RSA (Retirement Savings Account) balance as equity contribution, there would be an opportunity for them to also fill their forms on the platform which can be passed on to their PFA (Pension Fund Administrators),” he added.