FG launches N100bn real estate financing scheme to boost affordable housing

To increase Nigerians' access to affordable housing, the federal government has started a N100 billion real estate finance program headed by the private sector.

This project is a component of the Real Estate Investment Fund (MREIF) of the Ministry of Finance Incorporated (MOFI) and is the second funding phase of the program.

In order to boost Nigeria's housing industry and offer long-term, affordable mortgage finance for homeownership, MREIF seeks to raise N1 trillion.

The most recent round of finance, known as Series 2, is driven by the private sector and enables investors and companies to help build affordable housing nationwide.

Affordable mortgage loans with up to 25-year repayment terms and interest rates of 11–12%—much lower than those provided by commercial banks—are one of the financing scheme's main advantages.

This is made possible by a blended finance framework, which lowers borrowing costs by combining private sector investments with public funding, which is sourced at 1%.

To raise the N100 billion from the capital market, the Ministry of Finance Incorporated (MOFI) is spearheading efforts to draw in important private sector participants like asset managers, financial advisers, and issuing houses.

Building on the success of Series 1, which raised N150 billion, this second phase brings the total amount of funding raised to N250 billion.
MREIF is intended to offer long-term financing for housing development, assisting millions of Nigerians in becoming homeowners, given the country's estimated 20 million housing need.

Mr. Wale Edun, the Coordinating Minister of the Economy and Minister of Finance, emphasised the need of private sector participation in advancing the housing sector. "The government's commitment to facilitating homeownership is demonstrated by the successful completion of Series 1. With Series 2, we are now extending an invitation to private investors to join us on this journey, boosting the economy, building employment, and enhancing infrastructure', he said.

Similarly, Series 2 is a significant step in freeing private finance for the housing market, according to Dr Armstrong Takang, MD/CEO of MOFI. "We are creating a sustainable system for affordable homeownership that will benefit all Nigerians by using blended finance," he stated.

Dr. Shamsudeen Usman, the chairman of the MOFI Board, called MREIF a historic accomplishment in Nigeria's housing industry.

"The goal of the Renewed Hope Agenda is to provide Nigerians with sustainable homeownership opportunities, and MREIF is a key component of this vision," he stated.