FirstBank and MOFI Introduce 20 Year Single-Digit Mortgage Plan to Address National Housing Deficit
FirstBank of Nigeria
FirstBank of Nigeria Limited, in collaboration with the Ministry of Finance Incorporated (MOFI) and ARM Investment Managers, has officially launched a single digit mortgage housing scheme aimed at expanding affordable home ownership across the federation. Unveiled in Abuja on Tuesday, the initiative introduces long-term financing with repayment tenors extending up to 20 years at an interest rate of approximately 9.75%. This strategic partnership seeks to mitigate Nigeria’s housing deficit, currently estimated to be between 20 million and 28 million units, by providing sustainable credit to prospective homeowners and stimulating the construction value chain.
Structural Framework and Economic Impact
The Managing Director and Chief Executive Officer of FirstBank, Mr Olusegun Alebiosu, characterized the scheme as a pivotal shift in the nation’s housing finance landscape. Amidst a high interest rate environment that has historically restricted mortgage accessibility, Alebiosu emphasized that the single-digit rates are a deliberate effort to blend social impact with financial sustainability.
By reducing the monthly repayment burden on households, the programme facilitates a transition from rental occupancy to property ownership. Beyond individual benefits, the scheme is projected to serve as a catalyst for large scale development. Improved off-take guarantees for developers are expected to accelerate construction timelines, subsequently creating employment for contractors, artisans, and suppliers within the real estate ecosystem.
Sustainability and Institutional Oversight
The initiative is executed through the MOFI Real Estate Investment Fund (MREIF), a market-driven vehicle designed to avoid the inefficiencies of previous public housing programmes. According to the National Coordinator of MREIF, Mr Sani Yakubu, the fund has been listed on the Nigerian Exchange (NGX) with an initial ₦250 billion tranche.
The MREIF is part of a broader ₦1 trillion funding framework registered with the Securities and Exchange Commission (SEC). To ensure transparency and investor confidence, the fund is independently rated and regulated by the SEC. Yakubu noted that the mortgage loans are refinanced by the Nigerian Mortgage Refinance Company (NMRC), a mechanism that ensures liquidity and stability within the secondary mortgage market.
Accessibility and Disbursement Timelines
Under the new guidelines, beneficiaries are required to provide a 10% equity contribution to qualify for the 9.75% interest rate. Ms Kai Orga, Managing Director of ARM Investment Managers Limited, confirmed that the partnership with FirstBank is designed to streamline the application process. ARM has already facilitated disbursements exceeding ₦75 million to over 110 clients. Under the structured framework of this new arrangement, mortgage approvals are expected to be finalized within a four-to-six-week window.
The FirstBank-MOFI partnership represents a significant institutional effort to institutionalize affordable housing finance in Nigeria. By combining public sector support with private capital and a robust regulatory framework, the initiative addresses the core barriers of high entry costs and short repayment cycles. As the ₦250 billion pilot tranche commences, the long-term success of the programme will depend on sustained private sector participation and the continued stability of the refinancing mechanisms provided by the NMRC.
