…seeks FMBN, NMRC, MREIF, FHFL, collaboration

By Kingsley Adegboye

The Housing Development Advocacy Network (HDAN), has proposed the establishment of a National Mortgage Guarantee and Inclusion Framework that would bring together FMBN, NMRC, MREIF, FHFL, commercial banks, primary mortgage banks and other stakeholders to expand access to affordable housing finance in Nigeria.

HDAN says coordinated risk-sharing could expand mortgage access to millions of Nigerians.

In a statement released by its Research and Economic Development Unit, the body said Nigeria needs a coordinated mortgage system capable of serving not only salaried workers but also traders, artisans, farmers, entrepreneurs and other Nigerians earning legitimate but irregular incomes.

According to the organisation, Nigeria already has several institutions and interventions capable of supporting a stronger mortgage market, but they need to be better coordinated around long-term funding, risk sharing, affordable housing supply and financial inclusion.

“Nigeria does not necessarily need to keep creating new housing-finance institutions. We need to connect the institutions and interventions we already have and make them work together at scale,” HDAN stated.

It said FMBN, NMRC, MREIF, FHFL and the banking sector could play complementary roles under a national framework rather than operating largely through separate interventions.

HDAN proposed that a mortgage guarantee mechanism should form a major component of the framework, allowing government-backed institutions to share an agreed portion of the risk on qualifying mortgages.

It said this could encourage banks and mortgage institutions to deploy more private capital into housing, particularly for Nigerians who can demonstrate repayment capacity but fail to meet conventional mortgage requirements.

“Government cannot provide all the money required to finance homeownership for millions of Nigerians. Government intervention should be used strategically to reduce risk and attract substantially greater private-sector capital into housing finance,” the organisation said.

HDAN stressed that mortgage guarantees should not encourage reckless lending, adding that the system must have clear eligibility requirements, proper underwriting standards, transparent risk-sharing arrangements, monitoring and consumer protection.

The organisation said Nigeria’s large informal economy makes mortgage inclusion particularly important.

It argued that the absence of a monthly salary should not automatically be treated as evidence that a prospective borrower lacks the capacity to repay a mortgage.

“A trader may not receive a salary every month but may have operated a profitable business for 15 years. An artisan may not have an employment letter but may have consistent bank transactions. A farmer may earn seasonally, while an entrepreneur may receive irregular payments,” HDAN stated.

“The fundamental question should be whether that person can demonstrate sustainable income and the capacity to repay a properly structured mortgage.”

HDAN consequently called for alternative mortgage underwriting systems that could consider verified bank transactions, rent-payment history, cooperative contributions, business turnover, digital transactions, tax records and other credible evidence of income.

It stressed that mortgage inclusion should not mean weakening lending standards but finding more reliable ways of identifying creditworthy Nigerians outside the traditional salary system.

Under the proposed framework, HDAN said FMBN could deepen affordable mortgage products, National Housing Fund participation, cooperative housing and rent-to-own programmes.

NMRC could strengthen mortgage refinancing, underwriting standards, standardisation and access to long-term capital-market liquidity, while MREIF could help mobilise patient, long-term capital for housing finance.

FHFL could contribute its affordable housing development and delivery experience, while commercial banks and primary mortgage banks could originate and service qualifying mortgages using their capital, technology, customer bases and distribution networks.

“FMBN brings affordable mortgage infrastructure. NMRC brings refinancing and standardisation. MREIF brings long-term investment capital. FHFL brings affordable housing delivery experience. Banks bring capital, customers, technology and distribution. Nigeria needs a framework capable of bringing these strengths together,” HDAN said.

HDAN, however, cautioned that expanding mortgages alone would not resolve Nigeria’s housing affordability challenge if available houses remain beyond the incomes of most households.

It said mortgage reforms should therefore be accompanied by interventions addressing land costs, infrastructure, construction finance, building materials, development approvals, property documentation and other factors affecting housing prices.

“There is little benefit in giving a household access to mortgage finance if the cheapest suitable house available is still beyond what that household can afford. Mortgage reform and affordable housing supply must move together,” it stated.

The organisation also called for greater mobilisation of long-term capital through refinancing, capital-market instruments, development-finance institutions and appropriately regulated institutional investment.

HDAN said Nigeria could draw lessons from countries such as Morocco, where mortgage-guarantee mechanisms have been used to broaden access to housing finance for households that may struggle to meet conventional lending requirements.

It cautioned against simply copying another country’s model, saying Nigeria must develop a system suited to its large informal economy, income patterns, land-administration structure and affordability challenges.

“The lesson is not that Nigeria should reproduce Morocco’s system. The lesson is that government can use guarantees and risk-sharing mechanisms strategically to make more households acceptable to lenders and mobilise greater private capital into housing,” HDAN said.

The organisation called for a national technical dialogue involving FMBN, NMRC, MREIF, FHFL, the Central Bank of Nigeria, Federal Ministry of Housing and Urban Development, Federal Ministry of Finance, banks, mortgage institutions, pension and insurance institutions, state governments, developers, cooperatives and consumer representatives.

It said the dialogue should produce an implementable national framework with measurable targets for mortgage penetration, informal-sector inclusion, affordable housing supply and long-term funding.

“Nigeria needs to move from fragmented interventions to an integrated housing-finance ecosystem,” HDAN said.

“Our ambition should be to build a system where a Nigerian who earns a sustainable income and demonstrates the capacity to repay has a realistic pathway to housing finance—whether that income comes from a government salary, private employment, a market stall, workshop, farm or small business.”

HDAN is a leading civil society and research-driven housing advocacy organisation promoting affordable, accessible and sustainable housing in Nigeria and across Africa. Its work covers housing affordability, mortgage finance, land reform, real estate regulation, consumer protection, housing data and access to housing finance.

The organisation said Nigeria already possesses many of the institutions required to deepen its mortgage market, but stronger coordination, political commitment and financial innovation are required to make the system work for a much larger proportion of the population.