By Angela Atabo

Real Estate Developers Association of Nigeria (REDAN) says high mortgage interest rates pose a significant obstacle to housing affordability, particularly for low-income civil servants.

The REDAN President, Mr Akintoye Adeoye, made this known in an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja.

Adeoye raised concerns over the soaring mortgage rates in the country, stating that it has become nearly impossible for low-income earners to own homes.

According to him, mass houses are being built by members of REDAN across the country at low-cost housing estates in various states.

He, however, said that in spite of REDAN’s contributions to mass housing, many low-income civil servants still struggle to afford homes due to several key challenges.

“Mortgage rates in Nigeria are typically above 20 per cent, making it nearly impossible for low-income earners to afford home loans.

“REDAN has continuously advocated for reduced mortgage rates, ideally around two to six per cent to enhance affordability and increase home-ownership among civil servants.

“However, the current financial climate still makes it difficult for many to secure affordable financing,” he said.

The REDAN President noted that, at the moment, the Federal Mortgage Bank of Nigeria (FMBN) is the only institution that offers affordable mortgages at six per cent.

He said that was why REDAN consistently called for the bank’s recapitalisation to enable it to access more funds and provide affordable mortgages for Nigerians.

“If there is any major issue affecting housing today, mortgage accessibility will rank first.

“Without a functional and accessible mortgage system, many Nigerians will continue to be unable to afford homes.

“An inadequate supply of affordable housing finance remains a major challenge in the real estate sector.

“Without access to low-interest funding, developers are compelled to depend on costly commercial loans, which significantly raise the price of housing units,” he said.

He said the situation has not only put financial strain on developers but also discouraged large-scale investment in mass housing projects.

The REDAN President added that lack of accessible mortgage options has further worsened the challenge of housing affordability for civil servants,

“The National Housing Fund (NHF) offers low-interest mortgage loans, but many civil servants either do not meet the eligibility criteria or experience long delays in securing funds.

“This challenge is also attributed to FMBN’s limited liquidity for NHF loan disbursement.“Low salary structures often make it difficult for civil servants to meet mortgage requirements, leaving many unable to afford home ownership.

“As a result of these factors, numerous low-income civil servants are left without viable housing solutions, notwithstanding REDAN’s continuous efforts to address the housing deficit,” he said

Adeoye said addressing the challenges required a multi-faceted approach, including recapitalisation of FMBN, policy reforms and increased government support for real estate developers.

Other approaches, according to him are, enhanced financing options for both developers and homebuyers, lowering mortgage rates and streamlining land acquisition processes.

Adeoye reiterated that, improving access to affordable housing finance is a critical step toward making homeownership a reality for low-income civil servants. (NAN)

Edited by Rotimi Ijikanmi