In a bid to address the housing deficit and create a more accessible and sustainable homeownership system, the Ministry of Finance Incorporated Real Estate Investment Fund has launched a 20-year mortgage financing scheme at a 12 per cent interest rate.

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 designated N1trn fund, which kicks off with an initial capital of N250bn is a 20-year-long mortgage with a 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.

Speaking on the initiative, the head of investment, MREIF, Oluiyi Adekunbi, said though the programme had been registered, the fund would be launched in series.

He explained, “The first phase, a N150 bn fund, has already been registered and fully subscribed by the Ministry of Finance and Coordination, and the initial subscription is a concessionary fund designed to reduce interest rates.

“The second phase targets commercial investors, with plans to raise an additional N100 bn. A significant portion of this funding is expected to come from Nigeria’s pension fund industry, which currently holds over N20 tn.

This strategy aims to mobilise funds for infrastructure, particularly homeownership.”

He asserted that the MREIF would address homeownership challenges through low-cost mortgages that provide long-term, 12 per cent interest mortgages for up to 20 years through eligible financial institutions.

These institutions, he stated, would pre-qualify and extend mortgage facilities to homebuyers, making housing more affordable.

“Recognising the difficulties developers face in securing financing, the fund will offer off-take guarantees to enhance their creditworthiness. This will enable developers to secure construction loans and complete housing projects without the financial strain of selling properties off-plan at fixed prices.

“A seamless digital application platform has been developed to facilitate mortgage applications. The platform currently hosts over 2,000 housing units across the country, allowing prospective homeowners to check eligibility based on income, age, and equity contribution.

“The application process has commenced with an applicant going to fill out the form online via the MREIF portal, which the ARM has created. 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 stated that an individual could access a minimum of N45m to N50m and a maximum of N200m.

He disclosed, “The fund will initially focus on urban areas with the highest housing deficits, including Lagos, Abuja, Kano, Rivers, Enugu, and Abia. These commercial centres were chosen due to their strong economic activity, ensuring sustainable mortgage repayment.

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

Adekunbi further stated that the government-backed MREIF would be private sector-led to ensure efficiency and transparency.

“ARM Investment Managers will act as fund managers, with an investment committee overseeing operations. This committee includes representatives from the Ministry of Finance Incorporation, trustees, custodians, and independent experts,” he said.

Comparing MREIF to the National Housing Fund, which has a lengthy application process and is fully government-driven, Adekunbi said MREIF offered a more transparent, scalable, and private-sector-led approach.

“The digital platform will enable real-time tracking of applications, reducing bureaucratic delays. The structure of MREIF allows for more capital mobilisation from both the public and private sectors. It is a scalable model that can be expanded to attract more investment over time,” Adekunbi concluded.