HDAN Calls for Mortgage Sector Reforms to Improve Access and Affordability in Nigeria
HDAN Advocates Mortgage Sector Reforms to Expand Affordable Homeownership in Nigeria
The Housing Development Advocacy Network (HDAN) has highlighted the ongoing under-performance of Nigeria’s mortgage sector, emphasising that millions of citizens remain excluded from affordable homeownership. The warning was issued during the Mortgage Bankers Association of Nigeria (MBAN) Mortgage Finance Roundtable held recently in Lagos.
Festus Adebayo, Executive Director of HDAN, identified systemic obstacles that limit the sector’s effectiveness. He noted that a substantial portion of Nigeria’s population operates outside formal banking systems, while many potential homeowners lack the necessary income documentation to access mortgage financing. For those who qualify, interest rates ranging from 18 to 30% absorb a significant portion of household income, making homeownership financially unattainable.
Persistent Structural Challenges
Festus Adebayo, Executive Director of HDAN, identified systemic obstacles that limit the sector’s effectiveness. He noted that a substantial portion of Nigeria’s population operates outside formal banking systems, while many potential homeowners lack the necessary income documentation to access mortgage financing. For those who qualify, interest rates ranging from 18 to 30% absorb a significant portion of household income, making homeownership financially unattainable.
Land administration and foreclosure mechanisms also remain key barriers. Bureaucratic delays in land titling slow property transactions and discourage investors, while slow and unpredictable foreclosure processes reduce banks’ willingness to provide long-term mortgage products.
Urgent Need for Structural Reforms
Adebayo underscored that incremental policy adjustments alone are insufficient. He called for comprehensive sector reforms, including:
Recapitalisation of the Nigeria Mortgage Refinance Company (NMRC) to expand access to long-term, lower-interest mortgages.
Strengthening government-backed initiatives, such as the Family Homes Fund, to support affordable housing delivery.
Implementation of risk mitigation tools, including mortgage insurance and government guarantees, to restore investor confidence.
The HDAN executive noted that macroeconomic instability, including high inflation and a volatile currency, further complicates mortgage pricing, discouraging banks from offering sustainable long-term financing.
Addressing Affordability Gaps
Even households earning approximately ₦500,000 monthly face challenges in meeting mortgage repayments. Adebayo advocated adopting flexible homeownership models widely used internationally, such as shared-equity schemes, income-linked repayment plans, and hybrid rent-to-own structures.
He also highlighted the growing reliance on incremental building, cooperative housing, and rent-to-own arrangements as interim solutions for Nigerians unable to access traditional mortgage products.
Strategic Pathways for Sector Revitalisation
To reposition the mortgage industry, HDAN recommends a multi-pronged approach:
Expanding refinancing opportunities and access to long-term capital.
Digitising land administration and simplifying property registration processes.
Attracting private and institutional investment to support mortgage financing.
Developing flexible mortgage products tailored to informal sector workers and younger populations.
Stabilising the macroeconomic environment to ensure predictable mortgage pricing.
Adebayo concluded that these reforms are essential to transform Nigeria’s mortgage sector into an effective vehicle for sustainable homeownership and a meaningful contributor to closing the country’s housing deficit.
