How FG’s N1tr initiative will tackle housing deficit, by MREIF

• Pegs 20-year mortgage interest rate at 12%

The Ministry of Finance Incorporated Real Estate Investment Fund (MREIF) has revealed how its N1 trillion government-backed initiative will address the country’s housing deficit and create a more accessible and sustainable homeownership system.

The initiative launched by the Federal Government provides long-term, low-cost mortgage financing for homebuyers and developers, with an initial capital of N250 billion. The fund also offers a 20-year mortgage at an interest rate of 12 per cent.

Speaking on the initiative, Head of Investment at MREIF, Olubiyi Adekunbi explained that the programme would be in phases. The first phase, a N150 billion fund, has already been registered and fully subscribed by the Ministry of Finance, while coordination and initial subscription are designed to reduce interest rates.

“The second phase targets commercial investors, with plans to raise an additional N100 billion. A significant portion of this funding is expected to come from the pension fund industry, which currently holds over N20 trillion. This strategy aims to mobilise funds for infrastructure, particularly homeownership,” Adekunbi explained.

He disclosed that MREIF would address homeownership challenges through low-cost mortgages, which 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 developers’ difficulties in securing financing, the fund offers 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,” he said.

Adekunbi explained that a seamless digital platform has been developed to facilitate mortgage applications. The platform currently hosts over 2,000 housing units nationwide, allowing prospective homeowners to check eligibility based on income, age, and equity contribution. He disclosed that the application process has commenced with an applicant going to fill out the form online via the MREIF portal, which the ARM has created. He said the fund allows flexible financing and pension-backed mortgage options to ease homeownership.

The application process, he said, involves five stages including expression of interest, verification, and mortgage pre-approval, home selection through a list of vetted properties, as well as final approval and disbursement. He disclosed that an individual could access a minimum of N45m to N50m and a maximum of N200 million.

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

“For those who want to apply for the 25 per cent of their Retirement Savings Account (RSA) balance as 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(PFA),” he added.

Adekunbi stated that while government-backed, MREIF will be private sector-led to ensure efficiency and transparency. “ARM investment managers will act as fund managers, with an investment committee overseeing operations.

“Committee includes representatives from the Ministry of Finance Incorporation, trustees, custodians, and independent experts,” he said. Comparing MREIF to the National Housing Fund (NHF), Adekunbi said MREIF offers 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’s a scalable model that can be expanded to attract more investment over time,” Adekunbi added.