Mortgage Financing for Housing Delivery in Nigeria

The Governmental Role in Development of an Effective Mortgage Market



By Arc. Dr. Felix Osita Ikekpeazu

Nnamdi Azikiwe University

Awka, Anambra State, Nigeria



This paper is an investigation into the mortgage systems for financing housing delivery in Nigeria, with particular reference to the role of government in the development of an effective mortgage market. The paper commences with a definition of terms, especially, mortgage, primary mortgage institutions, secondary market and secondary mortgage market.  It then proceeds to a description of the background and context of the emergence of mortgage financing. This paper progresses to an overview of housing finance arrangements in Nigeria including an elaboration of the financing operations of the mortgage finance institutions. The paper provides an elucidation of the role of government in the development of an effective mortgage market in Nigeria. It then highlights the performance of the federal Mortgage Bank of Nigeria (FMBN) in housing delivery with an overview of the Bank’s establishment, objective and mandate, and achievements (housing estates funded by  FMBN); and new innovations such as the introduction of E-collection for National Housing Fund  contributions, NHF Informal Sector Cooperative Housing Loan Scheme and the formation  of new partnerships with key institutions like Nigerian Airforce,  Nigerian Navy,  Nigeria police, among others, with a view to financing the building of staff residential estates through the NHF scheme.

This paper then makes policy recommendations including conclusions on the mortgage financing for housing delivery in Nigeria.

The recommendations highlight the need for new policies that will facilitate the growth of the housing sector, especially in the area of policy formulation and implementation and removal of bureaucracy. The paper also reaches the conclusion that given the primacy of housing as second in the hierarchy of human needs, there still exists the necessity to continually address the challenges of the housing finance sector such as the dearth of long term financial instruments, absence of mortgages liquidity, weak capital base, inadequate primary mortgage institutions, weak corporate governance, inadequate skilled labour and high cost of building materials.

Keywords: Mortgage Finance, Primary Mortgage Institutions, Housing Finance Arrangements, Effective Mortgage Market, Mortgage Liquidity.



Housing (shelter) has universal acceptability in ranking second after food among man’s most basic needs. Unfortunately, shortage of housing stock both in number, quality and functionality abounds virtually in every country, especially in the developing and third world countries. The causes of this dearth of housing stock are numerous and vary from country to country. But one cause, expensive finance to fund home purchase or construction, is found to be present in all countries, albeit in varying degrees of exacerbation. Understandably, the high cost of housing construction relative to the average incomes of prospective homeowners has made borrowing from housing finance institutions the ‘sine qua non’  for people who find themselves in such a bind. Hence, the necessity for the evolution of a mortgage finance system; especially in Nigeria’s socio-economic circumstances of economic deregulation and multi-sectoral reforms.


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About the Author

Dr. Felix Ikekpeazu

Nnamdi Azikiwe University
Anambra State, Nigeria


Dr. Felix Ikekpeazu
holds a Bachelor of Architecture (B. Arc) and a Doctor of Philosophy Degree in Architecture, specializing in Housing delivery systems. He joined Nnamdi Azikiwe University in Anambra State after serving as Chief Architect at the Enugu State Housing Development Corporation. He is currently a senior Lecturer in the Department of Architecture. His research interests are in Housing delivery systems, Green buildings and energy efficiency in buildings. Dr. Ikekpeazu is a registered Architect and has published in many local and international journals. He can be contacted at [email protected]