MOFI, partners sign pact to deliver single-digit mortgage

The Ministry of Finance Incorporated (MOFI), Family Homes Funds Limited (FHFL), and ARM Investment Managers (ARM) have signed a Memorandum of Understanding aimed at easing mortgage terms for Federal civil servants in Nigeria under the MOFI Real Estate Investment Fund (MREIF). Speaking at the event in Abuja, the Managing Director/Chief Executive Officer of MOFI, Dr. […]

The Ministry of Finance Incorporated (MOFI), Family Homes Funds Limited (FHFL), and ARM Investment Managers (ARM) have signed a Memorandum of Understanding aimed at easing mortgage terms for Federal civil servants in Nigeria under the MOFI Real Estate Investment Fund (MREIF).

Speaking at the event in Abuja, the Managing Director/Chief Executive Officer of MOFI, Dr. Armstrong Takang noted that the goal of the agreement tallies with the central goal of MREIF, which is to expand access to housing for Nigerians on a mass scale through a credible and innovative financing model at single digit interest rates.

He said, “To address the equity contribution barrier, both MREIF and FHFL will jointly provide significant portions of the required mortgage funding, leaving homebuyers with a convenient equity contribution of only 10%. Additionally, this arrangement reduces the interest rate for civil servants to a single digit.

“The interest rate reduction strategy includes blending funding sources with varying cost of capital, allowing loans to be delivered at significantly reduced interest rates. FHFL’s access to a funding line from the African Development Bank (AfDB) will play a vital cost-lowering role here,” the MD explained.

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Also speaking, the national coordinator of MRIEF, Mr. Sani Yakubu stated that “A well-structured loan distribution and management plan has been roposed, which will feature engagement of Partner Mortgage Lenders to grant the mortgage loans, with all loans made to comply with the Nigeria Mortgage Refinance Company (NMRC)’s underwriting standards.”

The Executive Director at ARM Investment Managers, Mounir Bouba noted that the fund is registered with the Securities and Exchange Commission and follows the guidelines and the governance structure for fund management in Nigeria, adding, “The agreement was signed to  allow Nigerians to borrow at less than 10%, single digit.”