MOFI's Real Estate Investment Fund Disburses N22.5 Billion to Five Eligible Financial Institutions

Strategic Insights -

The Ministry of Finance Incorporated (MOFI) has made significant progress in its Real Estate Investment Fund (MREIF) program, disbursing N22.5 billion to five Eligible Financial Institutions (EFIs) for on-lending to qualified home buyers. This move is part of the MREIF's strategy to tackle Nigeria's housing deficit of about 28 million units while providing affordable long-term mortgage financing and competitive returns to investors. The disbursement follows the Securities and Exchange Commission's approval in October 2024 for ARM Investment Managers Limited to establish the N1 trillion MREIF program.

Key Takeaways:

  • The N22.5 billion disbursement represents 9 percent of the MREIF's net asset value.
  • The funds will be used for on-lending to 398 qualified home buyers at a predetermined interest rate, effective August 12, 2025.
  • The mortgage loans will run for a maximum tenor of 20 years, with interest and principal amortised over the period.
  • The pilot phase of N250 billion was launched in March 2025, with N150 billion in Series 1 fully subscribed by MOFI in January and N100 billion in Series 2 raised from institutional investors via a public offer in March.
  • MREIF's blended mortgage rate was reduced from 12 percent to 9.75 percent in July 2025 to improve affordability and expand access.
  • The home buyers' minimum equity contribution was lowered to 10 percent from 20 percent, effective August 1, 2025.
  • MOFI agreed to a lower return on its concessionary investment to sustain targeted yields for Series 2 investors.
  • The fund supports property developers with off-take guarantees, buying up to 40 percent of unsold units if developers fail to sell within stipulated timelines.
  • A digital MREIF platform has been launched to connect home buyers, EFIs, and developers, streamlining property listings and transactions.
  • MREIF's revenue streams include interest income from EFIs, investment income from liquid assets, and guarantee fees.
  • Operating expenses are capped at 3.5 percent of NAV, with up to 90 percent of net income distributed as semi-annual dividends.

Statistics:

  • N22.5 billion disbursement to five Eligible Financial Institutions (EFIs)
  • 9 percent of the MREIF's net asset value
  • 398 qualified home buyers to benefit from the on-lending program
  • Maximum tenor of 20 years for the mortgage loans
  • 150 billion in Series 1 fully subscribed by MOFI in January
  • 100 billion in Series 2 raised from institutional investors via a public offer in March
  • 28 million units: Nigeria's housing deficit
  • 12 percent: Initial blended mortgage rate
  • 9.75 percent: Reduced blended mortgage rate in July 2025
  • 10 percent: Home buyers' minimum equity contribution (effective August 1, 2025)
  • 20 percent: Initial home buyers' minimum equity contribution
  • 40 percent: Maximum off-take guarantees to property developers
  • 3.5 percent: Operating expenses as a percentage of NAV
  • 90 percent: Net income distributed as semi-annual dividends
  • 1 percent: Minimum return earned by MOFI on Series 1
  • 19.27 percent: Annualised return delivered to Series 2 investors in July 2025
  • 4.32 percent: Return delivered to MOFI in July 2025

Sources:

  • The Ministry of Finance Incorporated (MOFI) press release
  • ARM Investment Managers Limited press release
  • Securities and Exchange Commission (SEC) approval in October 2024
  • MREIF's Real Estate Investment Fund (MREIF) program documentation
  • Nigeria's housing deficit report by the National Bureau of Statistics (NBS)