The MREIF has raised N250 billion in a fundraising effort to address Nigeria’s housing finance gaps, indicating strong private sector engagement. Fund benefits include long mortgage terms and low interest rates. The initiative aims for a total of N1 trillion to increase affordable housing access. Investors show confidence in the funding structure, with future rounds expected to enhance participation in affordable housing development.
The Ministry of Finance Incorporated Real Estate Investment Fund (MREIF) has successfully raised N250 billion in a pilot fundraising round, with substantial involvement from the private sector, aimed at alleviating Nigeria’s significant housing finance gap. This announcement was made on Thursday by Sani Yakubu, the executive director and coordinator of the MREIF.
The fundraising effort included a fully subscribed N100 billion second series issuance, indicating strong confidence from institutional investors in the fund’s structure and its potential to enhance long-term housing development in Nigeria. This follows a previous N150 billion subscription for Series 1, also fully funded by MOFI as the primary sponsor.
In total, MREIF has raised N400 billion towards its ambitious goal of N1 trillion, intended to expand access to affordable housing across the nation. MREIF offers long-term mortgage financing options, featuring repayment durations of up to 25 years and interest rates starting at 12%, which are considerably lower than typical commercial lending rates.
Additionally, the Fund provides off-take guarantees for developers, fostering increased investments in residential construction projects. Wale Edun, the finance minister, characterized the successful pilot phase as a transformative milestone for Nigeria’s housing sector, reflecting a strong investor commitment.
Armstrong Ume Takang, managing director of MOFI, also expressed that the successful fundraising reflects investor confidence in MREIF’s potential to unlock new opportunities within the housing market. The MREIF’s program aims to merge subsidized public funding with market-rate private capital, effectively reducing borrowing costs for potential homeowners.
Future fundraising rounds are anticipated to expand investor engagement, ultimately accelerating the development of affordable housing in Nigeria.
In conclusion, the successful fundraising by the MREIF signifies considerable advancements in Nigeria’s housing finance landscape, demonstrating robust private sector involvement and investor confidence. The initiative aims to bridge the financing gap in the housing sector through innovative solutions, providing long-term support for affordable housing development. The anticipated future rounds will likely enhance participation further, fostering continued progress within this essential sector.
Original Source: www.premiumtimesng.com
