The Ministry of Finance Incorporated (MOFI) real estate investment fund (MREIF) is a crucial part of President Bola Tinubu’s renewed hope plan, established under the one million homes housing project in 2024.
With an estimated shortfall of 28 million housing units, MOFI said the initiative aims to provide a sustainable solution to the country’s housing crisis.
For those seeking to understand, the key questions are: what exactly is MREIF, who is eligible to participate, how to apply, how does the programme work, and what benefits does it offer to Nigerians seeking affordable housing options?
Established and sponsored by MOFI, the investment arm of the federal government, the MREIF aims to address housing sector challenges by providing scalable, long-term, low-cost mortgage funding.
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MREIF is managed by ARM Investment Managers Limited as fund managers, while STL Trustees acts as trustee and First Nominees as fund custodian.
It serves as a subsidiary within MOFI to intervene in housing and real estate investments, ensuring regulatory compliance and optimising returns, thereby facilitating the construction and sale of affordable homes across Nigeria.
This initiative targets low- and middle-income earners, ensuring that affordable housing is within reach for a significant portion of the population.
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On December 20, 2024, MOFI announced a full subscription of N150 billion for series one.
In February, the incorporation launched the N100 billion series two offering, bringing the total initial funding under MREIF to N250 billion.
HOW MREIF WORKS
As a Securities and Exchange Commission (SEC)-registered and regulated entity, it operates under private-sector leadership to fulfil its core mission of bridging Nigeria’s homeownership gap.
MREIF has a N1 trillion programme size with a 99-year lifespan, with investors such as MOFI and institutional investors, including pension fund administrators (PFAs).
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It is understood that the MREIF will catalyse private sector funding for housing, enhance the roles of sector players, create market off-take capacity, and focus on mid-tier market supply to impact overall supply.
Objectives of the fund include offering affordable mortgage financing, creating up to 2 million jobs, generating up to $10 billion in mortgage assets, enhancing economic growth by up to $20 billion, and deepening local manufacturing for building materials.
MOFI also listed the objectives to include supporting Nigeria’s SDG 11 goals, sustainable cities and communities, making cities and human settlements inclusive, safe, resilient and sustainable, and aligning with Tinubu’s economic reform agenda.
“The strategy includes funding mortgage lending, identifying greenfield projects, establishing off-taker guarantee schemes, investing in large-scale real estate projects, and diversifying investments across geopolitical zones and residential types,” the firm said.
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“Operating under a robust governance framework, it will have a dedicated Executive Director, be registered with the SEC, and managed by a SEC-registered Fund Manager, ensuring transparency and compliance.”
Also, the Nigeria Mortgage Refinance Company (NMRC), operated by MOFI, will refinance mortgages, provide a secondary market, enhance liquidity and support the MREIF’s affordable housing finance goal.
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ELIGIBLE PARTICIPANTS
MOFI said the borrower must be aged 21 and above, but not older than 60 years on the expiration of the loan.
The firm added that the person should have a satisfactory credit score and must contribute at least 20 percent of the value of the housing unit.
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Through the MREIF mortgage financing, home buyers can only buy one unit; however, MOFI said they can buy multiple houses strictly with their own resources.
The maximum loan amount a buyer can access under the MREIF pension-backed mortgage is up to N100 million.
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MOFI said the houses are across Nigerian states where there are available home buyers.
The government investment arm said the MREIF mortgage is the only obtainable mortgage and can be pension-backed, with the non-interest mortgage “coming soon”.
NON-INTEREST MORTGAGE
A non-interest mortgage refers to home financing structured using contracts that comply with the principles of Islamic finance on the prohibition of interest.
This differs from a conventional mortgage in that it does not charge interest, instead using alternative structures like profit-sharing or rental agreements.
This type of mortgage specifically adheres to the prohibition of interest, enabling individuals to access financing for purchasing a home without contravening their values.
The non-interest mortgage is commonly structured through a lease-to-own arrangement between the customer and the finance provider.
The federal government said MREIF aims to offer very affordable non-interest mortgages, with buyers expected to pay the periodic rental amount as well as the purchase price of the property.
MOFI said eligible institutions under MREIF shall procure shariah approval for their mortgage contracts from their shariah boards.
Anyone who meets the financial eligibility criteria set up by the eligible financial institutions and the MREIF can access the non-interest mortgage.
Home buyers and property developers are to create accounts to apply via MOFI’s website.
