The Housing Development Advocacy Network (HDAN) has called for the establishment of a 'National Mortgage Guarantee and Inclusion' framework to expand access to mortgage loans for Nigerian homebuyers, particularly those in the informal sector. In a statement from its Research and Economic Development Unit, HDAN emphasized the need to coordinate existing institutions such as the Federal Mortgage Bank of Nigeria (FMBN), Nigeria Mortgage Refinance Company (NMRC), Ministry of Finance Incorporated Real Estate Investment Fund (MREIF), and Family Homes Funds Limited (FHFL) to create a unified system. The proposal aims to address gaps in serving non-salaried workers, including traders, artisans, farmers, and entrepreneurs, who often face barriers due to irregular income streams.
HDAN argued that Nigeria does not require new housing-finance institutions but rather a strategic alignment of existing ones to enhance long-term funding, risk-sharing, and affordable housing supply. The network proposed a mortgage guarantee mechanism under a national framework, where government-backed institutions would share risk on qualifying mortgages, thereby encouraging private capital participation. This approach, according to HDAN, would enable banks and mortgage institutions to extend loans to individuals with repayment capacity but who fail to meet conventional criteria, such as those without formal salaries. 'Government intervention should be used strategically to reduce risk and attract more private-sector capital into housing finance,' the network stated.
The advocacy group also highlighted the need to redefine underwriting standards to accommodate informal sector workers. Festus Adebayo, HDAN’s executive director, noted that individuals like traders, artisans, and farmers could demonstrate sustainable income through alternative metrics such as verified bank transactions, rent-payment history, and business turnover. 'The fundamental question should be whether that person can demonstrate sustainable income and the capacity to repay a properly structured mortgage,' he said. HDAN recommended incorporating these non-traditional indicators into mortgage assessments to ensure financial inclusion without compromising risk management.
HDAN’s framework underscores the importance of clear eligibility requirements, transparent risk-sharing arrangements, and consumer protection measures to prevent reckless lending. The proposal aligns with broader efforts to improve housing affordability, including government initiatives like the Nigeria Mortgage Refinance Company’s interventions. By fostering collaboration among stakeholders, the network aims to transform Nigeria’s mortgage market into a more inclusive and scalable system, ultimately increasing homeownership rates across diverse income groups.