HDAN Proposes Mortgage Guarantee Framework to Expand Housing Finance Beyond Salaried Workers

The Housing Development Advocacy Network (HDAN)

The Housing Development Advocacy Network (HDAN) has proposed a national mortgage guarantee and inclusion framework aimed at expanding access to housing finance beyond formally employed Nigerians and attracting more private capital into the mortgage market.

The proposal would bring together the Federal Mortgage Bank of Nigeria (FMBN), Nigeria Mortgage Refinance Company (NMRC), Ministry of Finance Incorporated Real Estate Investment Fund (MREIF), Family Homes Funds Limited (FHFL), commercial banks, primary mortgage banks and other housing-finance stakeholders under a more coordinated system.

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HDAN said Nigeria already has several institutions capable of supporting a deeper mortgage market but needs to connect their roles more effectively around long-term funding, risk-sharing, affordable housing supply and financial inclusion.

HDAN Targets Mortgage Access Beyond Salaried Workers

A central part of the proposal is to widen mortgage eligibility for Nigerians who earn legitimate incomes but do not receive conventional monthly salaries.

HDAN identified traders, artisans, farmers, entrepreneurs and other informal-sector workers as groups that can struggle to meet traditional mortgage requirements despite having sustainable income streams.

The organisation argued that the absence of a formal salary should not automatically be treated as evidence that a prospective borrower cannot repay a mortgage.

It proposed using alternative evidence such as verified bank transactions, rent-payment history, cooperative contributions, business turnover, digital transactions and tax records to assess borrowers' repayment capacity.

Mortgage Guarantee Could Reduce Lending Risk

HDAN wants a mortgage guarantee mechanism to become a central component of the proposed framework.

Under the concept, government-backed institutions would share an agreed portion of the risk associated with qualifying mortgages. The objective is to give banks and mortgage institutions greater confidence to lend to borrowers who may not satisfy conventional requirements but can demonstrate the ability to repay.

The organisation said government cannot provide all the capital required to finance homeownership for millions of Nigerians. Instead, public intervention should be used to reduce risk and attract substantially more private-sector capital into housing finance.

This approach would shift some emphasis from direct government funding towards risk-sharing and private-capital mobilisation.

Proposed Framework Connects Existing Housing Institutions

HDAN's proposal does not call for the creation of another standalone housing-finance institution.

Instead, it seeks greater coordination between institutions that already occupy different positions within Nigeria's housing-finance ecosystem.

FMBN would continue to support affordable mortgage products, National Housing Fund participation, cooperative housing and rent-to-own programmes. NMRC would strengthen refinancing, standardisation and access to long-term capital-market liquidity, while MREIF would help mobilise patient capital for housing finance.

FHFL would contribute its affordable housing development experience, while commercial and primary mortgage banks would originate and service qualifying loans.

The proposed structure therefore seeks to link mortgage origination, refinancing, long-term investment capital and housing delivery more closely.

Informal Workers Remain a Major Mortgage Inclusion Challenge

The proposal is particularly relevant to Nigeria's informal economy, where income can be regular but less predictable than conventional salaried employment.

A trader may have substantial business turnover without a monthly payslip. Similarly, farmers may receive income seasonally, while entrepreneurs and artisans can have fluctuating earnings.

HDAN's proposal would shift the assessment towards whether borrowers can demonstrate sustainable income and repayment capacity rather than relying primarily on formal employment documentation.

The approach is consistent with an issue NHM has previously covered: efforts to expand mortgage access need to address the exclusion of informal-sector households from conventional housing finance.

Mortgage Guarantees Would Need Strong Risk Controls

HDAN also cautioned against allowing mortgage guarantees to weaken lending standards.

It called for clear eligibility criteria, proper underwriting, transparent risk-sharing arrangements, monitoring and consumer protection.

This is important because a guarantee can reduce lenders' exposure to losses, but it does not remove the underlying credit risk associated with borrowers.

The effectiveness of any national guarantee mechanism would therefore depend on how eligibility, pricing, claims, underwriting and government exposure are structured.

Mortgage Finance Must Be Matched With Affordable Housing Supply

HDAN also stressed that expanding mortgage access alone would not resolve Nigeria's housing affordability challenge.

If mortgage availability increases while the cost of land, construction, infrastructure and housing remains high, more credit could simply allow households to finance increasingly expensive properties rather than make homeownership genuinely more affordable.

The group therefore called for mortgage reforms to be accompanied by measures addressing land costs, infrastructure, construction finance, building-material prices, development approvals and property documentation.

This supply-side issue is particularly important for developers because increased mortgage availability only creates sustainable housing-market growth when there is sufficient stock that households can afford.

MREIF and Long-Term Capital Already Expanding

The proposed framework comes as Nigeria is already expanding institutional sources of housing finance.

NHM reported in September that MREIF was seeking to mobilise more capital-market funding for affordable housing projects and long-term mortgages. The fund had reportedly provided ₦128 billion in mortgages to 1,859 families across 25 states by June 2026.

MREIF's mortgage portfolio also expanded significantly during the first half of 2026, highlighting the growing role of institutional capital in Nigeria's mortgage market.

HDAN's proposal could therefore be viewed within a wider shift towards longer-term funding, institutional investment and risk-sharing mechanisms rather than reliance on conventional bank lending alone.

Stronger Mortgage Access Could Expand the Developer Market

For property developers, broader mortgage eligibility could potentially expand the pool of qualified buyers.

Nigeria's residential property market remains heavily dependent on cash purchases because many households cannot access appropriately priced long-term mortgage finance. A system that enables more households to qualify for sustainable mortgages could improve the potential market for formally developed housing.

However, the impact would depend on the cost of credit, property prices, loan tenures, underwriting standards and the availability of suitable housing stock.

NHM's recent coverage of rising mortgage demand also shows the importance of connecting housing-credit availability with actual affordability. CBN data indicated increased demand for house-purchase credit and mortgage or re-mortgage lending in Q2 2026.

A More Integrated Mortgage Market Could Attract Private Capital

The broader significance of HDAN's proposal is its emphasis on connecting Nigeria's existing housing-finance institutions rather than treating mortgage access as the responsibility of a single organisation.

A functioning guarantee and inclusion framework could potentially create clearer relationships between public institutions that provide risk support, institutions that refinance mortgages, investment vehicles that supply long-term capital and lenders that originate loans.

For investors and developers, such coordination could improve the predictability of housing finance and strengthen the connection between capital, homebuyers and housing supply.

Outlook

HDAN's proposal puts mortgage risk-sharing and financial inclusion at the centre of efforts to deepen Nigeria's housing-finance market.

Its proposed framework would seek to bring informal-sector workers into formal mortgage finance while encouraging banks and other private institutions to commit more capital to housing.

The proposal does not, however, solve the affordability challenge by itself. Its effectiveness would depend on the eventual design of the guarantee mechanism, lending standards, funding costs and parallel reforms addressing land, construction and housing supply.

For Nigeria's property market, the central issue remains whether expanded access to finance can be matched with homes that households can actually afford.

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