Lagos, mortgage operators in talks over housing finance

On the heels of the spiritedly efforts recently by the Lagos State government to increase the housing stock by 20,000 units, the mortgage operators and other stakeholders have agreed that for low-income earners to key into affordable housing, reduction in transactions cost is inevitable.

Besides, they also urged the state government to adopt the model mortgage and foreclosure law; maximum of five steps to register title and maximum of 10 per cent of property value in total costs and large-scale production of housing for N3 million and less.

The stakeholders met at a one-day workshop in Lagos organized by Lagos state government in partnered with the Nigeria Mortgage Refinance Company Plc (NMRC) and Mortgage Warehouse Funding Limited (MWFL).

The forum was aimed at identifying innovative financing solutions in its quest to address the three million housing deficit in the state and provide its teeming citizens with affordable housing.

The workshop themed “Building an end –to-end Ecosystem for Affordable Housing” was convened to engage conversations with an array of stakeholders that included chieftains from mortgage lending banks, pension fund administrators, National Pension Commission, mortgage brokers and property developers.

For NMRC’s Managing Director, Prof. Charles Inyangete, effective collaboration among all stakeholders is key towards fostering a transformative partnership for affordable housing.

According to, affordable housing will be enhanced through reduced transaction costs in land acquisition/titling; reduced transaction time between construction and sales of completed houses; relative assurance for building quality and provision of adequate infrastructure and increased marketability of mortgage backed securities.

Inyangete stressed that for affordable housing to become real, there should be maximum time of 30 days for perfection of title; maximum perfection cost of three per cent of property value; maximum of six months to foreclose on a property.

Earlier, State’s Commissioner for Housing, Prince Gbolahan Lawal remarked that in pursuance of the mandate of the Ministry of Housing since its creation in 1999, the government had directly made available about 30,000 housing units.

He said: “This is a drop in the ocean in view of rapid urbanization, population increase, and uncontrolled migration to Lagos”.

A representative of the Lagos State developers, Mr. Ibrahim Wushishi, said that sourcing of funding at high rates of interest usually increase the price of the housing unit and reduce affordability.

He said the ability to leverage on pensions to fund mortgages would substantially empower buyers and create a massive liquidity boost for the sector.

Mortgage Warehouse Funding Limited (MWFL) is positioned to bridge the gap through short term pre-financing (for a period of six months in the books of the member mortgage banks) prior to long term refinancing by NMRC – the nation’s secondary mortgage lender for up to 20-year tenor to mortgage lending banks.

MWFL Chairman, Mr. Sonnie Ayere described the ecosystem as one that will propel mutual benefit to stakeholders and ultimately, the first-time home owner.

Mr. Ayere stated that a significant reduction to the high interest rate to bridge the affordability gap and active contribution of both formal as well as informal sectors in pension funds creates an opportunity for more houses to be developed at affordable costs.

He said: “As the individual remains consistent with contributions to the pension scheme, he/she will continue to enjoy a single digit mortgage rate. These are some proposals we are making towards building an end-to-end ecosystem for affordable housing”.

Director, OFISD – Central Bank of Nigeria, Mrs. Tokunbo Martins represented by Mr. Adedeji Adesemoye (Deputy Director, OFS – Analytics and Special Examinations) noted that the CBN’s regulatory perspective is centered on the value chain engagement approach, designed on a paradigm shift from the current supply-driven demand to the more sustainable demand-driven supply philosophy.

“The issue of affordable housing must be addressed in a step-by-step approach, from land to building materials to primary/secondary finance to capital market,” she said.