Nigeria targets housing crisis with $650m fund for low-interest mortgages
Nigeria has unveiled a 1 trillion naira ($650 million) fund aimed at addressing its housing crisis by providing low-interest mortgages and spurring a construction boom in the country, Finance Minister Wale Edun announced.
Speaking to reporters, Edun detailed that the government has secured a 40-year loan from the World Bank’s International Development Association at a 1% interest rate. This loan, matched by private sector funding from pension funds and banks, has helped raise an initial 250 billion naira for the first phase of the program, Semafor reports.
"This fund will enable Nigerians to access mortgages at single-digit and low double-digit interest rates, making homeownership more attainable," Nairametrics quotes Edun. The mortgages, expected to be available within weeks, will have repayment terms of approximately 25 years.
Mortgage lending is a relatively small segment of Nigeria’s property market, as it is in many parts of Africa. Loans typically require significant upfront deposits, with interest rates around 20% for a 10-year term, forcing most property transactions to be conducted in cash. This has led to a system where homeownership remains out of reach for many Nigerians, with research indicating that most citizens live in rented accommodations.
Nigeria is facing an acute housing shortage, with the Federal Mortgage Bank of Nigeria estimating that at least 28 million additional homes are needed to meet demand. The new fund is expected to provide much-needed financing for prospective homeowners while also giving property developers guaranteed off-takers, thereby accelerating construction activity in the country.
