How to Ensure Property Eligibility for Bank Mortgage Underwriting

The Nigerian real estate market continues to face significant challenges in mortgage accessibility, with approximately 95 percent of land in the country classified as "dead capital" due to a lack of formal financing eligibility. To bridge this gap, industry experts emphasize that prospective homeowners and investors must ensure rigorous adherence to specific documentation and environmental standards to qualify for bank underwriting.

According to a report by BusinessDay, the most critical factor in securing a mortgage is the possession of a government-verified survey document. This document provides the precise coordinates of the property, allowing financial institutions to verify its location against official records. Without a survey that aligns with government data, commercial and mortgage banks are unlikely to underwrite the purchase, effectively stalling the transaction for buyers who cannot afford to pay out of pocket.

Beyond documentation, the physical environment of a property significantly influences its "mortgageability." Financial institutions assess the resale value and risk profile of an asset before approving a loan. Properties situated in undesirable locations such as those directly opposite cemeteries or refuse dumps often face rejection from financiers. These environmental factors create liquidity risks, as such properties are harder to sell in the secondary market, making them unattractive collateral for lenders.

To navigate these complexities, professionals recommend that buyers engage in comprehensive due diligence. Olugbenga Alamu, Chief Operating Officer of QShelter, noted in an interview with BusinessDay that many properties remain unencumbered by government acquisition or family disputes but fail to secure funding due to poor presentation or lack of professional vetting. Alamu highlighted that the involvement of credible estate surveyors and valuers is essential to verify that a property is free from legal entanglements and situated in an accessible, viable location.

Facilitation platforms are increasingly filling the void left by traditional brokerage methods. By leveraging the expertise of former mortgage bankers who understand institutional requirements, these platforms assist developers and buyers in streamlining the application process. This professional oversight ensures that all technical requirements ranging from valid government surveys to environmental suitability are met before the property is presented to a lender.

For investors and policymakers, the transition of property from "dead capital" to bankable assets remains a priority for economic growth. Ensuring that a property is "fit for mortgage" not only secures the individual investment but also contributes to the broader formalisation of the Nigerian housing market. As the industry evolves, the integration of professional due diligence and verified documentation will remain the primary requirement for expanding mortgage penetration beyond the current five percent threshold.