The Nigerian Ministry of Finance Incorporated (MOFI) has introduced a 20-year mortgage financing scheme under the Real Estate Investment Fund (MREIF), aiming to make homeownership more accessible and sustainable. This initiative is set to tackle the country’s housing deficit and offer low-cost mortgage options, particularly to pension account holders.

Key Features of the MREIF Mortgage Scheme

• Total Fund Size: N1 trillion
• Initial Capital Injection: N250 billion
• Mortgage Duration: Up to 20 years
• Interest Rate: 12% per annum
• Eligibility: Open to pension account holders and general applicants through pre-qualified financial institutions
• Loan Amounts: Minimum of N45 million to N50 million, with a maximum cap of N200 million
• Initial Target Locations: Urban centres with high housing demand—Lagos, Abuja, Kano, Rivers, Enugu, and Abia

Phased Implementation and Funding Structure

The fund is being implemented in phases, with an initial N150 billion already registered and fully subscribed by the Ministry of Finance and Coordination.

• First Phase (N150 billion): Fully subscribed and designated as a concessionary fund, helping to lower mortgage interest rates.
• Second Phase (N100 billion): Targets commercial investors, including pension funds, which hold over N20 trillion in assets.

This strategy ensures that capital is effectively mobilized from both public and private sectors to finance homeownership and infrastructure projects.

How the MREIF Mortgage Scheme Works

1. Mortgage Access through Pre-Qualified Financial Institutions
Financial institutions will assess, pre-qualify, and disburse mortgage loans to homebuyers, ensuring streamlined and secure financing.

2. Support for Developers
A major barrier to housing development is the lack of financing for developers. The MREIF offers off-take guarantees, enhancing the creditworthiness of developers so they can secure construction loans. This reduces the need to sell properties off-plan at fixed prices, ensuring smoother project completion.

3. Digital Mortgage Application Platform
A seamless digital platform has been launched to simplify the mortgage application process. Over 2,000 housing units are currently available on the platform, allowing potential homeowners to check eligibility based on income, age, and equity contribution.

The mortgage application process involves five stages:

• Expression of Interest
• Verification
• Mortgage Pre-Approval
• Home Selection from a Vetted List of Properties
• Final Approval & Loan Disbursement

4. Pension-Backed Mortgage Option
Individuals can apply for up to 25% of their Retirement Savings Account (RSA) balance to use as an equity contribution for their mortgage. Applicants can submit forms directly through the MREIF platform, which will then be forwarded to their Pension Fund Administrators (PFAs).

Private Sector-Driven, Government-Backed Approach

Although backed by the government, the MREIF is primarily private-sector-led to ensure efficiency and transparency.

• Fund Management: ARM Investment Managers
• Oversight: An investment committee comprising MOFI, trustees, custodians, and independent experts

Unlike the National Housing Fund (NHF), which has been criticized for long bureaucratic processes, MREIF is designed to be:
✔ Faster and more efficient
✔ Scalable and adaptable to attract more investments
✔ Transparent with real-time tracking

The digital mortgage application system reduces bureaucratic delays, allowing applicants to monitor their application progress in real-time.

Conclusion

The launch of the MREIF’s N1 trillion mortgage fund is a significant step toward addressing Nigeria’s housing crisis. By offering affordable 12% interest mortgages over 20 years, backed by pension funds and private investors, this initiative has the potential to bridge the homeownership gap and provide more Nigerians with accessible, long-term housing solutions.

As the program expands, its success will depend on effective fund management, broad participation from financial institutions, and a sustained focus on affordability. With its transparent digital platform and structured financing approach, MREIF sets a new benchmark for housing finance in Nigeria.