Federal Government N1 trillion Real Estate Fund
The Federal Government has announced a N 1 trillion real estate fund aimed at facilitating home ownership through the provision of low-interest mortgages at a 12 per cent interest rate per annum.
Mounir Bouba Executive Director, ARM Investment Managers & Olubiyi Adekunbi Head, Investments, ARM Investment Managers
This initiative is designed to make housing more affordable by offering financing options below the prevailing market rates.
The fund is expected to stimulate the housing market by enabling more individuals to purchase homes, thereby increasing demand in the real estate sector. This move aligns with broader economic strategies to boost home ownership and address housing deficits in the country.
The Head of Investment, ARM, an asset management firm, Biyi Adekunbi said though the N1trillion program has been registered, however the fund would be launched in series. According to him, N150 billion series one has been registered and fully subscribed to by the Ministry of Finance Incorporated (MOFI) as Sponsor and the subscription is a concessionary tranche, which is aimed at bringing down the interest rates for mortgages.
The second level of financing, which is series two, Adekunbi said is targeted at commercial investors and the intention is to raise up to N100 billion specifically from pension fund administrators. According to him, currently, the pension fund industry sits on over N20 trillion. The Head of Investment said this fund was one of the structures that had been created to mobilise funding from the sector to address infrastructure challenges, in this instance, specifically, homeownership.
He explained that the Ministry of Finance Incorporated (MOFI) Real Estate Investment Fund (MREIF) was a ₦1 trillion government-backed initiative designed to provide long-term, low-cost mortgage financing for homebuyers and developers in Nigeria. The fund, he said was aimed to addressing Nigeria’s housing deficit and creates a more accessible and sustainable homeownership system
The fund would address the homeownership issue through the provision of long-term low rates and low-interest rate mortgages. “At low rates and long term, we are currently targeting mortgages at 12% per annum for up to 20 years,” Adekunbi said adding it will be issued through eligible financial institutions that will be pre-qualified.
He said these facilities would be issued through on-lending arrangements with eligible financial institutions in lending the mortgage facilities to qualified homebuyers.
On the supply side which is related to the provision of housing units to the scheme.He said in the last couple of months due to rising inflation developers were unable to complete the project at the prices they’ve sold off-plan, resulting in undue losses and not being able to deliver the properties that they’ve committed to the homebuyers.
What the MREIF will do is provide off-take guarantees to these developers which will serve as a credit enhancement. This will enable them to approach construction lenders to raise construction finance for the development of residential homes,” he said.
Adekunbi said this takes the pressure of committing to homebuyers at a low rate, and it also enhances their credibility because it’s a credit enhancement, and they’re able to raise sufficient funding to complete their project and sell at market prices.
He said the mortgage application process will be seamless with the MREIF application portal. Currently, there are well over 2,000 housing units on the portal, and homebuyers would have the opportunity to conduct their eligibility criteria that individually confirm how much they are able to access based on their current income, their age, and how much equity contribution they have.“With that information, they will be able to view the properties they qualify for on the platform and then approach or apply for the offer letters for the property,” he said, adding that if they qualify, the developers would be able to issue offer letters for the properties for them on the platform. Ultimately, the homebuyers will be able to apply for mortgages on the portal.
KEY MESSAGES & FAQs
- What is MREIF?
MREIF is a government-backed mortgage financing initiative designed to provide Nigerians with affordable homeownership options through long-term, low-cost mortgages.
- Who is eligible to apply for a mortgage under MREIF?
Nigerians who are salaried workers, self-employed professionals, or part of the diaspora with verifiable income sources are eligible.
- What makes MREIF different from other mortgage programs?
- Lower interest rates than traditional mortgage schemes.
- Government-backed stability and funding.
- Pension-backed nancing options.
- Nationwide accessibility with vetted property listings.
- How do I apply?
- Step 1: Submit an Expression of Interest (EOI) form via the MREIF portal.
- Step 2: Complete verification and financial assessment.
- Step 3: Get pre-approved for a mortgage and select a home.
- Step 4: Final approval and disbursement of mortgage funds.
- What kind of properties are available under MREIF?
MREIF features a range of affordable housing units across Nigeria, developed in partnership with trusted real estate developers.
- How long is the mortgage repayment period?
MREIF mortgages are structured with long term repayment plans of up to 20 years.
- Can Nigerians in the diaspora apply?
Yes, Nigerians abroad can access MREIF mortgages, provided they meet the eligibility criteria.