FirstBank and MREIF Open Affordable Home Loan Scheme
First Bank of Nigeria Limited and the MOFI Real Estate Investment Fund, MREIF, have opened an affordable home loan scheme designed to help more Nigerians finance residential property purchases.
Under the programme, eligible applicants can access up to N100 million, subject to their income, age and ability to repay the loan.
The facility comes with a fixed interest rate of 9.75 per cent and allows repayment over a period of up to 20 years.
The initiative is aimed at Nigerians seeking an alternative to the rising cost of renting and the financial barriers associated with purchasing a home.
Scheme Targets Home Ownership
FirstBank’s Head of Personal Banking, Chukwuka Okonkwo, explained the structure of the programme during a webinar focused on the transition from renting to home ownership.
He said affordability was a central consideration in determining how much an applicant could borrow.
The bank has also established a debt service ratio designed to ensure borrowers retain sufficient income to meet their other financial obligations.
This means applicants will not simply be assessed on the value of the property they wish to purchase.
Their income and ability to comfortably service the loan will also be considered.
Borrowers Can Access Up to N100 Million
The maximum amount available under the scheme is N100 million.
However, applicants must meet the relevant eligibility requirements.
A minimum equity contribution of 10 per cent is required.
Eligible pension contributors may also be able to use up to 25 per cent of their Retirement Savings Account balance to supplement their contribution towards home ownership.
The structure could make it easier for some workers who have accumulated pension savings but may not have sufficient cash available for an initial property contribution.
Couples Can Apply Jointly
The scheme also allows married couples to apply jointly.
The income of both spouses can be considered when determining their borrowing capacity.
This arrangement could potentially increase the amount a household qualifies for.
It also recognises the financial reality of many Nigerian households, where home ownership may depend on combining the incomes of two working adults.
The 9.75 per cent interest rate is fixed throughout the agreed loan period.
This provides borrowers with greater certainty when planning their long-term repayments.
Only Completed Properties Qualify
The FirstBank MREIF home loan is currently focused on completed residential properties.
Applicants cannot use the facility to finance every type of real estate transaction.
Properties must also have valid and verifiable titles before they can qualify for financing.
The title requirement is designed to reduce risks associated with property ownership and ensure that financed properties meet the necessary legal standards.
For prospective homeowners, this also means proper due diligence will be essential before entering into a property transaction.
Nigeria’s Housing Deficit Remains Significant
The scheme comes against the background of Nigeria’s longstanding housing shortage.
MREIF National Coordinator, Sani Yakubu, said the country faces a housing deficit of more than 20 million homes.
He added that annual housing delivery is currently estimated at around 100,000 units, while the country would need to increase yearly delivery to about 700,000 homes to make significant progress in reducing the deficit.
According to him, bridging the housing gap could require approximately N60 trillion.
The scale of the challenge demonstrates why mortgage financing remains an important component of Nigeria’s housing strategy.
MREIF Expands Mortgage Financing
MREIF was established through a public-private partnership aimed at addressing challenges around housing affordability and supply.
Its first N250 billion tranche consists of N150 billion from the Federal Government and N100 billion from private investors.
The wider programme is valued at N1 trillion and is registered with the Securities and Exchange Commission.
The partnership with FirstBank is intended to expand access to mortgage financing without replacing existing mortgage providers.
More Than N140 Billion Already Deployed
Olubiyi Adekunbi, Head of Real Estate Investment at ARM Investment Managers, said more than N140 billion had already been deployed to more than 2,000 beneficiaries since mortgage disbursements began in April.
The beneficiaries are spread across 27 states.
The scheme is also available to Nigerians living in the diaspora, provided the property being financed has a valid registered title.
The expansion suggests that mortgage-backed home ownership programmes could become an increasingly important part of Nigeria’s housing market.
Pension Savings Can Support Home Ownership
Pension contributors also have a role to play in the scheme.
Olufemi Adebayo, Executive Director of Sales and Investments at Leadway Pensure PFA, said eligible contributors can access up to 25 per cent of their RSA balance for home ownership.
However, applicants must meet specific conditions.
These include having contributed for at least five years, remaining in active employment and having at least three years before retirement.
Leadway Pensure said it had processed more than 70,000 applications and disbursed over N70 billion under the initiative.
A Potential Shift From Renting to Ownership
The FirstBank MREIF home loan programme could provide a significant opportunity for Nigerians who have stable incomes but struggle to raise the full cost of purchasing a home.
The fixed interest rate and long repayment period are designed to make mortgage payments more predictable.
However, prospective borrowers will still need to carefully assess their income, existing obligations and the total cost of the property before taking on long-term debt.
For Nigeria’s housing sector, expanding access to mortgage financing could also support demand for professionally developed residential properties.
With a housing deficit running into millions of units, initiatives that connect financing with legitimate property supply could become increasingly important.
The success of the scheme will ultimately depend on its ability to reach more Nigerians while maintaining responsible lending standards.
