…diaspora Nigerians also benefiting
…To introduce Sharia-compliant mortgage
Emma Ujah, Abuja Bureau Chief
The Ministry of Finance Incorporated (MOFI) has commenced handing over houses to Nigerians under its single-digit mortgage Housing initiative— MOFI Real Estate Investment Fund (MREIF).
The Managing Director of MOFI, Dr. Armstrong Takang, revealed this at the just- concluded Africa International Housing Show (AIHS) in Abuja.
He disclosed that the initiative was designed to transform Nigeria’s housing sector by bridging the mortgage financing gap through flexible terms, including single-digit interest rate.
The MD said that many Nigerians has received their houses under the initiative and that there was no better offer in the industry since beneficiaries are only to pay only 9. 75 percent interest.
The Sharia-compliant, non-interest product, he said would target Nigerians who would not want interest-bearing product and would ensure inclusivity.
He stated that through innovative financing, the Federal Government was poised to radically bridge the housing gap in Nigeria under a scheme designed for sustainability and wide-ranging impact.
Dr. Armstrong argued that MREIF was a much- needed, long-overdue intervention in the housing sector with real capacity to radically transform the entire housing value chain, and deliver long-term impact.
He stated that the Fund was designed to hedge against liquidity challenges, corporate governance issues, accessibility barriers, and the perennial challenge of sustaining initiatives for the long-term.
Speaking on Nigeria’s housing needs, Dr. Armstrong revealed the existence of a housing deficit of about 20 million units, prohibitive mortgage rates, and low mortgage tenors.
He added other barriers to housing access to include limited refinancing options and shallow secondary markets.
“A bold, ambitious and innovative intervention against the backdrop of these challenges,” the MOFI CEO revealed, “the MREIF was conceived as a timely and bold solution.”
The MD describing MREIF, as “a N1 trillion Securities and Exchange Commission (SEC)-approved and regulated fund designed to expand home-ownership and to strengthen Nigeria’s housing sector.”
He also stated that MREIF’s structure was designed to achieve the best corporate governance standards possible, replicating proven market-aligned success models.
To achieve this, MOFI serves only as the sponsor of the Fund, while MREIF enjoys the full status of a regulated market instrument which has a Fund Manager and is open to institutional investors.
With a AAA rating from Agusto and an AA rating from GCR, MREIF, he stated that MREIF had established itself as a highly credible, market-driven investment platform to address Nigeria’s housing finance gap by issuing out single-digit mortgages through eligible financing institutions, over a period of 20 years.
The Fund also provides off-take guarantees to qualified developers, ensuring sale of their properties by providing mortgages to qualified homebuyers, according to Dr. Armstrong.
A Public-Private Partnership that Works, Dr. Armstrong described the PPP structure behind MREIF as an effective model delivering the long-sought-after solution to the housing finance gap in Nigeria.
He lauded President Bola Ahmed Tinubu for the Renewed Hope Housing Initiative that inspired MREIF, and complimented the Fund’s private sector partners for steering the initiative towards sustainable impact.
With N250 billion already raised and mortgage finance disbursements made across three geographical zones so far, MREIF has been identified as Fund with a demonstrable prowess as a key driver of investment in long-term housing finance in the country.
MREIF’s partners include ARM as Fund Manager, VETIVA as Financial Advisors, Olaniwun Ajayi as Solicitors, Diya Fatemilehin as Technical Advisors, First Bank of Nigeria as Custodian, STL as Trustees, and TSL engineering as project managers.
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