MREIF Raises N250 Billion to Address Nigeria’s Housing Finance Gap

The Ministry of Finance Incorporated Real Estate Investment Fund (MREIF) has raised N250 billion in a fundraising effort to address Nigeria’s housing finance gap. Strong participation from the private sector and successful subscription of its series issuance demonstrate investor confidence in the fund’s long-term viability. This initiative aims to enhance access to affordable housing with attractive mortgage financing options.

The Ministry of Finance Incorporated Real Estate Investment Fund (MREIF) has successfully raised N250 billion in a pilot fundraising round. This initiative aims to address the persistent housing finance gap in Nigeria and has seen substantial participation from the private sector. The announcement was made by Sani Yakubu, executive director (coordinator) of MREIF, underscoring the confidence in this innovative funding approach.

Included in this fundraising effort is a N100 billion second series issuance that was fully subscribed by institutional investors, reflecting unanimous support for the fund’s potential to facilitate long-term housing development. This follows the prior successful N150 billion Series 1 subscription, funded entirely by MOFI as the primary sponsor and anchor investor.

The overall fundraising to date brings MREIF closer to its ambitious target of N1 trillion, a crucial step towards enhancing access to affordable housing in Nigeria. The MREIF offers long-term mortgage financing options, with repayment periods of up to 25 years and interest rates as low as 12 percent, significantly undercutting conventional commercial lending rates.

Wale Edun, Nigeria’s finance minister, heralded the pilot phase’s achievement as a vital transformation in the housing sector, emphasizing strong investor interest as a sign of latent demand for structured housing finance solutions. He stated, “The full subscription of Series 2 offer demonstrates the pent-up demand for a structured, long-term housing finance solution.”

Armstrong Ume Takang, the managing director of MOFI, noted that the successful subscription exemplifies investor confidence in MREIF’s structure and long-term viability. He remarked, “MREIF is unlocking new investment frontiers in Nigeria’s housing sector. This fully subscribed series demonstrates investor confidence in the fund structure.”

MREIF’s multi-tranche program is strategically designed to combine subsidized public financing with market-rate private sector capital, thereby reducing borrowing costs for potential homeowners. The fund anticipates that future fundraising rounds will expand investor engagement and accelerate the development of affordable housing throughout Nigeria.

In summary, the MREIF has effectively raised significant funds to bridge Nigeria’s housing finance gap. With a total of N250 billion secured, it aims to expand access to affordable housing. The strong participation from institutional investors highlights confidence in the financing model, poised to boost Nigeria’s housing development with longer repayment terms and lower interest rates. This initiative signifies a pivotal shift in the country’s housing finance landscape, promising sustainable solutions for potential homeowners.

Original Source: www.premiumtimesng.com