Nigeria Mortgage Refinance Company’s Chief Executive Officer, Mr. Kehinde Ogundimu has said that Nigerians are unable to provide the 20% equity down payment required to secure a mortgage.
He made this revelation during the Nairametrics industry outlook on the real estate and construction industry.
According to Ogundimu, the inability of Nigerians to obtain a 20% equity down payment serves as a major barrier within the mortgage market.
The NMRC’s solution
Ogundimu noted that the challenge of meeting the equity down payment requirement extends beyond Nigerians, highlighting it as a global issue.
- Globally, it is estimated that it would take 70 years to save the required 20% equity.
- The NMRC took initiative by approaching the National Pension Commission (PENCOM), proposing that Nigerians be granted access to 25% of their Retirement Savings Accounts (RSA) to facilitate mortgage acquisitions.
- Through the collaborative efforts of NMRC and PENCOM, this partnership has enabled a greater number of Nigerians to access 25% of their RSA, facilitating their ability to meet the mandatory 20% down payment requirement.
Ogundimu further addressed additional obstacles within the real estate and construction sector, pinpointing interest rates as the predominant challenge. He emphasized that, regarding interest rates, there were limited interventions available to the NMRC.
- “There is nothing the NMRC can do about it as it is a macro issue. It needs structural adjustments. The interest rates are also dependent on inflation so it is beyond us but we can offer our advice to policymakers.”
He indicated that the NMRC has implemented measures to streamline processes and reduce turnaround time.
- “We developed the model mortgage and foreclosure law which is a law that streamlines the processes making it easy and cheap. You can now get your permits early. Time is money in construction.”