The federal government has officially launched the Ministry of Finance Real Estate Investment Fund (MREIF), a major step toward making homeownership more accessible and affordable for Nigerians. This initiative is expected to help more people realize their dream of owning a home.
MREIF: A Major Response to Nigeria’s Housing Crisis
MREIF is a large-scale initiative worth N1 trillion, designed to tackle the country’s growing housing deficit. Estimates of this deficit vary, with some experts suggesting it stands at 17 million, while others place it at 20 million or even 28 million units. Regardless, MREIF is a critical response to address this challenge.
While it is a public sector initiative, MREIF is led by the private sector. It specifically focuses on assisting homebuyers and developers, creating a more accessible and sustainable system for acquiring homes in Nigeria.
Making Home Loans More Accessible
According to Biyi Adekunbi, Head of ARM Investment Managers, MREIF aims to provide long-term, low-interest mortgages for individuals. These mortgages can extend up to 20 years, offering affordable financing options. The fund operates under a public-private partnership, with the federal government providing stability. Additionally, pension-backed mortgage options are available, further easing the path to homeownership.
ARM Investment Managers is overseeing the fund’s management, with the goal of bridging the affordability gap. MREIF offers subsidized long-term loans that integrate pension-backed financing, making homeownership significantly more attainable for Nigerians.
How to Apply for the MREIF Fund
Adekunbi announced that the application process for MREIF has officially begun. Interested individuals can submit their applications through an online portal created by ARM Investment Managers. The process involves five stages: expression of interest, verification, mortgage pre-approval, property selection from a vetted list, and final approval and disbursement. Applicants can access between N45 million to N200 million in loans, depending on their eligibility.
Eligibility and Special Features of MREIF
The fund is available to salaried employees from both the private and public sectors, as well as self-employed individuals who meet income and credit criteria. Nigerians living abroad can also apply if they wish to invest in a property in Nigeria. The mortgage interest rate is set as low as 12%, with repayment terms extending up to 20 years.
Addressing Challenges in the Housing Market
MREIF also aims to support developers struggling with inflation, which has caused delays and even abandonment of construction projects. By offering off-take guarantees, MREIF provides developers with credit enhancement, allowing them to secure funding for construction. This initiative is expected to help raise the necessary capital for residential developments.
The application platform for MREIF features a wide selection of properties, estimated at around 2,000 housing units, to cater to the needs of first-time homebuyers, especially in urban areas like Lagos, Abuja, and Kano.
Pension Fund Utilization for Housing
Wale Odutola, an executive director at ARM, explained that MREIF also targets first-time homebuyers in urban areas where there is a severe housing shortage. He pointed out that, through the use of 25% of the Retirement Savings Account (RSA) balance as equity contribution, applicants can further ease the financial burden of purchasing a home.
Odutola highlighted that Nigeria’s pension fund sector, which currently holds over N20 trillion, plays a key role in mobilizing capital for housing and other infrastructure projects. With MREIF, the goal is to address both the demand and supply sides of the housing equation, helping developers raise funds while providing affordable mortgages to homebuyers.
