In a bid to tackle Nigeria’s severe housing deficit and stimulate long-term economic growth, the Federal Executive Council (FEC) has approved a N250 billion real estate investment fund aimed at providing affordable, long-term mortgages to Nigerians.
The initiative was announced by Minister of Finance, Wale Edun on Thursday after a FEC meeting presided over by President Bola Tinubu at the Presidential Villa, Abuja.
It is designed to address the country’s critical 22 million-unit housing gap while creating jobs and boosting private sector investment in the housing sector.
The new initiative, known as the Ministry of Finance Incorporated (MOFI) Real Estate Investment Fund, will offer low-cost mortgages to individuals seeking to own homes, with interest rates targeted at single-digit or low double-digit figures.
Edun explained that the fund’s unique structure will make it possible for Nigerians to access mortgages with interest rates ranging between 11% to 12%, a significant reduction from the current market rates that often exceed 30%.
The loans will have longer repayment tenures, potentially spanning 20 years or more, to make homeownership more accessible.
“This fund is the foundation for the revival of long-term mortgage financing in Nigeria,” Edun said.
“It will help bridge the huge housing deficit while fostering job creation and spurring growth in the broader economy. The initiative is designed not only to meet the housing needs of Nigerians but also to encourage private sector participation in the housing construction industry,” he said.
The N250 billion fund will be anchored on a blend of government seed funding and private-sector investments.
The government will contribute N150 billion, sourced from low-interest loans available to the government at a rate of 1%, with terms extending up to 40 years.
This government-backed funding will be mixed with market-based investments from long-term savers such as pension funds and life insurance companies.
By combining these two sources of capital, the fund will be able to offer mortgages with affordable pricing.
“The goal is to create a financing model that lowers the cost of homeownership for Nigerians,” Edun explained.
“We aim to attract long-term investors, including pension funds and insurance companies, who will provide additional capital at market-based rates. This, combined with the government’s low-cost funding, will allow us to offer mortgages at a fraction of the current interest rates,” he further said.
The initiative is part of President Tinubu’s broader economic plan to stimulate growth and revitalize the Nigerian economy through strategic investments in key sectors.
According to Edun, the fund will not only provide affordable housing but will also have significant multiplier effects across the economy.
The construction industry is expected to benefit from the influx of new investments, which will, in turn, create thousands of jobs and stimulate economic activity.
“The real estate sector has vast potential to drive economic development. This fund will be a catalyst for private sector involvement, which will lead to job creation, enhanced infrastructure, and the overall revitalization of the housing market,” Edun stated.
The MOFI Real Estate Investment Fund is designed to attract institutional investors and long-term savers, who will benefit from market-based returns.
Edun emphasized that the government’s role in this venture would be to provide the seed funding, which would then be blended with the investments from the private sector to ensure that the mortgages offered remain affordable for Nigerians.
“This is a promise kept by President Bola Ahmed Tinubu’s administration to make homeownership more accessible for ordinary Nigerians,” Edun said.
“It will bring relief to millions who have long struggled with exorbitant mortgage rates and short repayment terms. With this new initiative, the prospect of owning a home is no longer a distant dream for many Nigerians,” the minister added.
The launch of the N250 billion real estate fund is expected to stimulate significant growth in the housing sector, reduce the housing deficit, and contribute to broader economic stability.
As the fund is rolled out, more details will be made available to the public, with the prospectus now approved by the FEC and ready for distribution.
Edun highlighted the far-reaching economic benefits of the initiative saying: “This is not just about building homes; it is about building a sustainable future for Nigeria, with long-term growth, job creation, and a better standard of living for millions of Nigerians.”
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