Recently, I was interested in the process of getting a mortgage facility, and I can say it’s out of reach for most people. 

What started as a simple inquiry turned into a maze quickly, and became clearer than Ikogosi that there won’t be any resolution. My visits to a Primary Mortgage Bank (PMB), the Federal Mortgage Bank of Nigeria (FMBN), and the Lagos Building Investment Company (LBIC) confirmed my suspicious that Nigeria’s mortgage system remains trapped in analog bureaucracy and predatory pricing that would make even the most aggressive loan sharks reconsider their business model.

To be honest, I expected some level of inefficiency, but held out hope that the system might still be navigated. However, I only got confirmation for why mortgage usage in Nigeria is so low. 

You know that feeling when you think something should be straightforward, but reality hits you like a freight train? That was my mortgage hunting experience. I went in expecting maybe some paperwork, reasonable rates, and a clear timeline. What I discovered was a labyrinthine system so convoluted, so expensive, and so bureaucratic that it effectively excludes the very people it claims to serve.

That’s why most Nigerians rent. 

Families are forced to remain perpetual tenants, young professionals unable to build wealth through property ownership, and an entire generation locked out of what should be a fundamental pathway to financial security.

Journey To The Maze

NHF is Almost Only Useful for Government Properties

Let’s retrace my steps through the whole journey. 

It started with my first stop at a primary mortgage bank. Right off the bat, the red flags started waving hallelujah vigorously. 

They claimed the National Housing Fund (NHF) takes three months to process, but, and here’s the kicker, they’d been processing an application for seven months with no completion in sight.

Seven months! What happened with pre-approvals? There’s enough tech to get it processed within 2 – 3 days at most, as long as all documents are provided. 

There’s no rational seller who’ll wait seven months or more for payment, especially in an economy where holding onto assets for extended periods carries significant opportunity costs. If there’s another buyer with money, even if it’s less than the asking price, the seller will go with that, and then one will have to start the process all over again. 

This delay alone renders the NHF practically effective only for purchasing government properties, severely limiting choice and market competition.

But the NHF issue gets worse. Now, we went to the FMBN to register for NHF, and the biggest shocker of all. If you’re self-employed, you can’t get NHF after making contributions for 6 months. You need to have been making contributions for at least 1 year to be considered, usually 2 years.

That is, to get an NHF mortgage as a self-employed person from scratch, you could use between 1 and a half years at the earliest, probably up to 3 years or more. So, is that a mortgage at all? 

I checked the register and barely up to 5 people come every day to make inquiries about the NHF. That’s crazy in a city where about 90% of residents rent houses. We got to know that it’s because the new government is pushing mortgage, that’s why there’s even this level of inquiry. 

It’s this bureaucracy that makes it so that less than 5% of the NHF fund is utilized.

The human cost of this bureaucratic dysfunction is immense. Recent data from the Federal Mortgage Bank of Nigeria shows that between May 2023 and early 2025, only ₦11.75 billion in NHF mortgage loans was disbursed to 1,285 beneficiaries. 

That’s an average of just ₦9.1 million per beneficiary which is not enough to buy a decent apartment in any major Nigerian city today.

Now, the NHF is the government’s poster child. They hype it up, especially the 6% interest rate, and how contribution has to be for 6 months. The interest rate is most reasonable, even though I think it’s too high for a government program, and the 6 months contribution period is obviously false. 

The NHF terms are mostly hype marketing. 

There are also some considerations and issues. 

First, if you’re getting a property within the range of 15m – 50m, you’ll have to make a 30% equity. That’s too high and having it at 10% is better, especially considering that it’s mostly first time homeowners that apply, and you can only get NHF once. 

Moreover, houses by developers linked to the FMBN that are NHF approved are too expensive. There’s one such 3 bed apartment in Ayobo going for 50m under NHF. However, a 3 bed in the same area on a plot of land goes for 30-35m. The prices are unreasonable and not justifiable at all. 

Furthermore, for self-employed individuals—who make up a significant portion of Nigeria’s gig economy—the requirements are particularly punitive. This policy is economically irrational and socially harmful, especially when many of Nigeria’s most successful individuals are entrepreneurs who might not have traditional salary slips but have substantial and verifiable income streams.

Lastly, the government is not building enough properties. The Renewed Hope Estates, for example, have been advertised for a long time, but only the one in Karsana, Abuja has seen reasonable progress. The timeline for the rest hasn’t been followed, or updated.

There are also more considerations, but we’ll get to that later.

Now, that’s not to say I plan to shun the NHF program. Far from it. In fact, it’ll be the best choice because it has the lowest interest rate. However, the aforementioned issues prevent this. 

If there’s a reasonably priced apartment by the government, I’d happily subscribe. I’m just frustrated by the long period and bureaucracy surrounding the program, and how opaque and unreliable information about the entire thing is. 

Mortgages from Banks is Financial Suicide

The high interest rate in Nigeria is not a new thing. Still, when I asked at the PMB how much their interest is, I got a huge shocker. 

Brace yourself for this: 35% per annum. Let me break down what this means for ordinary Nigerians. 

Over ten years, this translates to paying 3.6 times the original mortgage amount purely in interest. Property appreciates, yes, but not as much as a 4x return in 10 years. Even if you’re optimistic about property values, you’re looking at a guaranteed financial disaster.

To put this in perspective with real numbers: if you’re buying a ₦50 million property and putting down a 30% deposit (₦15 million), you’d be financing ₦35 million. At a 35% annual interest rate over 10 years, you’ll end up paying roughly ₦126 million in total, ₦141 million if you add the ₦15 million deposit. That’s ₦91 million in interest, meaning you’ll pay about 3.6× the amount you borrowed, just to own the home. It’s not a mortgage; it’s financial suicide with a pretty name.

The mathematics becomes even more brutal when compared internationally. According to recent data I found, Nigeria’s mortgage rates are genuinely among the highest globally. The Central Bank of Nigeria’s benchmark rate hit a record high of 27.50% in November 2024, and inflation was at 23.71% as of recent reports. Mortgage lenders are simply passing these astronomical costs to consumers like hot potatoes.

Consider financing a ₦30 million property over the same 20‑year term across different countries:

• Nigeria (27% p.a. over 20 years)
  • Monthly payment ≈ ₦678 252
  • Total paid ≈ ₦162.8 million (≈ 5.43× the principal)
• United States (7% p.a. over 20 years)
  • Monthly payment ≈ ₦232 590
  • Total paid ≈ ₦55.8 million (≈ 1.86×)
• Singapore (2.6% p.a. over 20 years)
  • Monthly payment ≈ ₦160 436
  • Total paid ≈ ₦38.5 million (≈ 1.28×)

A Nigerian homebuyer ends up paying nearly 3× what an American pays (162.8 / 55.8 ≈ 2.92) and over 4× what a Singaporean pays (162.8 / 38.5 ≈ 4.23) for the exact same property value. 

Since interest rates in Nigeria often reach 35% or more, that gap is unfair and economically destructive. It makes building wealth through real estate very hard, makes the prices of houses very high, and keeps most people as tenants for most, if not all of their life. 

The Sleepy Beaver Getting Online

Next stop was Lagos Building and Investment Company Plc (LBIC). Primarily owned by the Lagos State government, they manage all the low cost housing in the state, and have been in existence for over 45 years. 

However, like they admitted, they are just modernizing their tech stack and putting their products online. That’s because I saw their building a whole lot, but I just couldn’t find enough info online until I went in there. 

They have a primary product for houses up to ₦250 million or more at 27% per annum. That’s fairer than most mortgage bank rates, but paying 2.7 times the worth of the property as interest in 10 years doesn’t sound appealing at all to me, even though that’s marginally CBN’s rate.

They also have a blended 17% facility that comes with a lot of buts. It’s a partnership between them and the Federal Ministry of Housing, but it’s only available for first-time homeowners, must be a standalone property, and many more restrictions such as a ₦80 million cap. 

Of course, they have a more reasonable time of about a month for getting the facility. You need to open an account with them too. 

Pretty chilled people, though. Very welcoming.

I still don’t have the full details on all their products, but I’m working on it, and will add an addendum to this post once I have it all.

I know they manage the Lagos State Home Ownership Mortgage Scheme (Lagos HOMS) program together with the Lagos State Mortgage Board.

I have much to say about Lagos HOMs. First, I think the Lagos State Government is doing a great job by providing these housing. However, I still hope more of these buildings can be provided to make things much easier. 

MREIF: A Glimmer of Hope Maybe?

Then we come to MREIF. A 12% fixed rate over 20 years may still feel steep, but with just a 20% equity contribution on a ₦100 million cap, the actual loan you’re amortizing drops significantly.

The Mortgage and Real Estate Investment Fund (MREIF) is easily the most intriguing recent innovation in Nigeria’s mortgage market. By offering a flat 12% interest rate over 20 years, it represents perhaps the government’s strongest push yet to ease access and cut through red tape.

To see why it matters: if you’re looking at the full ₦100 million cap and meet the 20% down‑payment requirement (₦20 million), you’d be borrowing ₦80 million. Amortized at 12% p.a. over 240 months, that works out to:

• Monthly payment: ≈ ₦880,900
• Total paid over 20 years: ≈ ₦211.4 million
• Loan multiple: ≈ 2.64× the amount borrowed (i.e., about ₦131.4 million in interest)

For 120 months, it comes to

• Monthly payment: ≈ ₦1,147,800
• Total paid over 20 years: ≈ ₦137.7 million
• Loan multiple: ≈ 1.72× the amount borrowed (≈ ₦57.7 million in interest)

Compared to the 27–35% rates charged by conventional banks, paying “only” 2.6× your loan in total is a huge improvement—and it could finally put home ownership within reach for many Nigerians.

However, MREIF is not without caveats. As a relatively new fund, awareness remains low, and its 12% rate depends heavily on government subsidies and blended financing. What happens if those supports fade or political winds shift? That sustainability question is the real headline to watch.

The ₦300 Billion Dead Capital Problem

After my sobering experience, I decided to do more research into the mortgage issues, as the arm-chair analyst that I am. 

Here’s where things get even more ridiculous. 

To get a mortgage, you need proper land titles. No land title, no mortgage. No land title, no mortgage. Simple enough, right? Wrong. Unfortunately, the land title process is a nightmare that would make Kafka weep tears of frustration. 

To get a registered deed of survey in Lagos, it’ll cost up to ₦2.5 million and take up to 15 months to be processed. 15 months is ridiculous for a piece of paper that should take days to process in 2025.

This bureaucratic mess has created what economists call “dead capital” which are assets that exist but can’t be used productively. We’re talking about ₦300 billion to ₦900 billion worth of real estate locked up because the paperwork doesn’t exist, and that’s a conservative estimation. 

Over 90% of land in Nigeria remains unregistered, which means it’s economically inactive and inaccessible for development or as collateral for loans.

Here’s the kicker: In Lagos State, despite being Nigeria’s commercial capital and supposed tech hub, only 246 Certificates of Occupancy were applied for in six years, with 649 applications for regularization. 

Lagos has over 20 million people, and less than 1,000 people bothered with proper documentation? That tells you everything about how broken the system is. The costs involved read like a catalog of bureaucratic extortion. 

Beyond the ₦2.5 million for deed registration, property owners must navigate up to 17 different agencies in Lagos alone. Each agency has its fees, timelines, and requirements, a system seemingly designed to discourage rather than facilitate economic activity.

Why can’t there be a one-stop shop with an online portal for getting all these done efficiently? The technology exists. The expertise exists. What’s missing is the political will to streamline a system that currently prevents millions of Nigerians from participating in the economy’s core promise: using assets as collateral to access credit for business development, education, or improvement.

The Numbers Behind Nigeria’s Housing Crisis

Let me put the housing crisis in perspective with some numbers that’ll make your head spin faster than getting stuck in traffic at Ibeju-Lekki and you need to get to Opic on Ileya day. True story. Horrible experience. 

The Federal Mortgage Bank of Nigeria estimates that the country requires at least 28 million additional homes to meet demand. To put this in perspective, Nigeria needs roughly 700,000 new homes every year just to keep up with population growth, yet barely 100,000 are built annually.

The Nigerian housing deficit is estimated to be between 17 and 20 million units as of 2025. For context, that’s like saying we need to build an entire Lagos worth of housing just to meet current demand, not even future growth. 

Rapid urbanization is a major factor here. Currently, over 55% of Nigerians live in cities like Lagos, Abuja, and Port Harcourt, all desperately short of adequate housing. That percentage will rise to 70% by 2050.

According to World Bank data, Nigeria’s housing deficit-to-population ratio stands at about 8%, meaning for every 100 homes needed, only 92 exist. By comparison, South Africa’s ratio is only 4%, and Egypt’s around 1%. 

The consequence is a nation where nearly half of the urban population lives in slum-like conditions.

Here’s what really gets me. 

Currently, mortgage debt accounts for less than 1% of the country’s GDP, compared to over 70% in some developed countries. This is a massive failure to mobilize domestic savings for productive investment in Nigeria.

The rent situation has gone completely mad. In Lagos, rents have doubled in just two years. A one-bedroom in Lekki that cost ₦1.8 million per year now goes for ₦3.5 million. When housing costs eat up 60-80% of your income, what’s left for anything else? Food? Education? Business investment? The math simply doesn’t work.

Singapore Shows Us What’s Possible

While Nigeria struggles to reach 25% homeownership, Singapore has achieved over 90% homeownership. Let that sink in for a moment. They didn’t achieve this through magic or massive oil revenues—they did it through smart policies and relentless execution.

Singapore’s achievement is a masterclass in applying systematic thinking to housing policy. The city-state’s Housing Development Board (HDB) created an integrated ecosystem where housing, financing, and urban planning work in harmony rather than against each other.

Here’s exactly how Singapore solved every problem we’re currently facing:

• Interest Rates That Actually Make Sense: While Nigerian banks charge 27-35% annually, Singapore’s HDB mortgages come at 2.6% – fixed for the entire loan term. How? The government doesn’t treat housing finance as a profit center. They use a concessionary rate that’s slightly above their cost of funds (0.1% to be precise), not a rate designed to extract maximum profit from citizens.

Here’s the math that’ll make you cry: A ₦30 million property in Singapore costs ₦38.5 million total over 20 years (1.28x the principal). The same property in Nigeria costs ₦162.8 million total (5.43x the principal). A Nigerian pays over 4 times what a Singaporean pays for the exact same house value.

• The Central Provident Fund (CPA), Like Our RSA, But Actually Useful: Singapore’s CPF is like our Retirement Savings Account (RSA) system, but designed by people who actually wanted it to work. Every worker contributes 20% of their salary, employers add another 17%, and here’s the genius part – you can use up to 100% of your CPF savings for housing.

Nigeria has RSAs too, but try accessing the 25% meant for mortgage-related endeavours. I dare you. The process is so complicated that most people don’t even know it’s theoretically possible, although this is dependent on your PFA too. Singapore made it automatic; your housing payments come directly from your CPF with minimal paperwork.

• Self-Sustaining Finance: The HDB doesn’t rely on commercial banks or pray for budget allocations. They issue government bonds at low interest rates, use land sale proceeds (since the government owns most land), and recycle loan repayments into new projects. It’s a self-sustaining system that grows stronger over time.

Compare this to Nigeria where the FMBN depends on NHF contributions that barely anyone makes, and state governments beg for federal allocations that never come.

• Technology That Actually Works: Singapore’s entire housing system runs on integrated digital platforms. You can apply for housing, get approved, choose your unit, arrange financing, and complete legal documentation online. The whole process takes 2-3 months maximum.

Meanwhile, we’re still using paper forms and waiting 15 months for a Certificate of Occupancy.

The philosophical difference between these two systems is also very important. 

Singapore treats housing as a social good requiring systematic intervention, not just a market commodity. HDB properties are typically priced at four to five times household income, and first-time buyers enjoy substantial discounts from market prices. The government doesn’t compete with private developers; instead, it ensures every citizen has access to affordable housing through a transparent, technology-enabled system.

Here’s another brilliant part: they allow the CPF, their mandatory social security savings scheme that functions as a significant part of the country’s retirement system, to be used fully as a deposit. Most people there service their mortgages entirely from their CPF with minimal cash outlay. Homeownership becomes the default, not a luxury.

This contrasts with Nigeria where a maximum of 25% of your Retirement Savings Account (RSA) balance can be used as equity contribution towards a residential mortgage. This applies regardless of the actual equity percentage required by the mortgage lender. If 25% of your RSA balance is less than the required equity, you’ll need to supplement the difference from other sources and provide evidence of this before applying for the RSA withdrawal.

The contrast is painful. Singapore’s mortgage-to-GDP ratio is significantly higher than Nigeria’s pathetic 0.6% for obvious reasons. They made homeownership normal; we’ve made it nearly impossible.

The beautiful thing is that housing is largely a state responsibility in Nigeria. Lagos, Rivers, or any forward-thinking state can implement Singapore’s model without waiting for Abuja to get its act together.

However, this requires a mindset shift. States need to think of housing as a social good, rather than a source of income. 

How Nigerian States Can Copy This Model

I’ve broken this down into five actionable steps I think any serious state government can implement:

Create a State Housing Development Board (If It Doesn’t Exist)

Lagos already has LBIC as a private company and the Lagos Mortgage Board (LMB) as an agency. But they need restructuring like Singapore’s HDB, especially the LMB. 

The board should have three clear mandates: build affordable housing for first-time buyers, provide concessionary financing at 8-12% (not the current 27%), and maintain existing housing stock.

Use State Pension Funds Creatively

Instead of leaving pension funds rotting in low-yield government bonds, states can create housing-specific funds (For the records, some PFAs like CrusaderSterling Fund II and Stanbic Fund II are doing great numbers, and government bonds are not low-yield currency too). Contributors get to use all their portion of their pensions for housing down payments, just like Singapore’s CPF. 

Lagos State alone has over ₦2 trillion in various pension and savings schemes. Even if 20% of that was available for housing at 10% interest rates instead of the current financial suicide rates, it’ll make access to mortgage more affordable.

Land Value Capture

Singapore’s government owns most land, which seems impossible here. But states can use land value capture; as infrastructure improves and property values rise, the government captures part of that increase through development levies and uses it to fund more housing.

Create Housing REITs

States can create Real Estate Investment Trusts specifically for affordable housing. Middle-class investors get decent returns (10-15%), while the state gets patient capital for housing development. Yes, this might compete with federal government bonds initially, but high interest rates from the FG won’t last forever.

Digital Integration

Build a unified platform where citizens can apply for housing, get pre-approved for mortgages, choose locations, and complete documentation online. The technology exists, we just need the political will to implement it.

The Lagos Model as a Case Study

Based on my limited information, Lagos State is actually closest to making this work. They have the foundation pieces already in place: LBIC for housing development, Lagos HOMS for financing, decent ICT infrastructure, and a large middle-class population desperate for affordable housing.

Here’s what Lagos could do tomorrow to transform their housing sector:

If Lagos can reduce their mortgage rates from the current 27% to 6 -10%, accept pension fund contributions as down payments, and digitize the entire process, they could realistically achieve 50% homeownership in 10-20 years. That would be revolutionary for Nigeria.

The ripple effects would be immediate. Other states would copy the model once they see it working as nobody wants to be left behind when Lagos residents are buying homes while their citizens remain perpetual tenants.

Lagos already has some advantages Singapore didn’t start with. They have a massive economy, existing financial institutions, and a tech-savvy population. What they need is the political will to treat housing as a social good rather than just another revenue stream.

The LBIC structure is already there. It just needs more funding and a mandate to serve first-time buyers specifically. The Lagos Mortgage Board exists but needs to offer rates that make mathematical sense for ordinary Nigerians, not just high-net-worth individuals.

Financing: Where the Money Comes From

This is where skeptics usually jump in with “But where will the money come from?” It’s a fair question, but Singapore’s model shows us that housing finance doesn’t need external miracles—it can be self-sustaining.

Singapore’s brilliance lies in creating a system that feeds itself:

• CPF contributions provide steady capital inflows
• Land sales generate revenue for new development
• Loan repayments fund the next round of construction
• Government bonds provide additional capital at low rates

Nigerian states can replicate this financial ecosystem by:

• Creating State Housing Funds: Fed by pension contributions, these funds would provide steady capital for housing development. Instead of pension funds earning 3-9% in government bonds (when it eventually goes back to pre-inflation levels), they could earn 8-12% in housing loans while serving a social purpose.
• Using Land Regularization Revenue: Proceeds from finally sorting out our land title mess should fund new housing development. Turn the bureaucratic nightmare into a revenue stream for solutions.
• Issuing State Housing Bonds: Lagos already proved this works with infrastructure bonds. Housing bonds could attract both institutional and retail investors looking for stable returns.
• Partnering with Pension Fund Administrators: These institutions manage trillions in long-term capital perfect for housing finance. They need better investment options; states need patient capital. It’s a natural partnership.

The key insight is that housing finance doesn’t need to be profitable in the traditional sense; it needs to be self-sustaining while serving a social purpose. When people can afford to buy homes, they spend money on furniture, appliances, and home improvements. The economic multiplier effect pays for itself.

Nigeria’s Information Asymmetry and Wealth Concentration Problems

Apart from the financing and policy issues, there are also other issues that severely impact the housing markets.

Wealth concentration with a few, that don’t invest back in the economy is one. That’s why the current system effectively restricts homeownership to the ultra-wealthy while excluding middle-class families who should be driving innovation and economic growth.

The concentration isn’t only about income and access to business capital, it’s also about access to information, connections, and opportunities. The wealthy know about investment opportunities, have access to low-cost capital through personal networks, and can navigate bureaucracies through connections. Meanwhile, ordinary Nigerians face information gaps at every turn, despite the ease with which these data should be available.

Take the NHF example. The official requirement is 6 months of contributions, but the practical requirement is 12-24 months. This information isn’t published anywhere, you only discover it when you apply. Even worse, the FMBN website where you sign up has technical issues such that the phone number and email linked to your BVN won’t get codes that you need to sign up with. 

Occam’s razor aside, I’m more likely to believe this information asymmetry is deliberate and profitable for those who benefit from it. This is because this issue is ridiculously easy to fix. More transparency, having a working portal for everything and having a single sign in for government services. However, lawyers, developers, estate agents, government officials, and mortgage bankers all benefit from the complexity and opacity of the system. Simplifying these processes would reduce their rent-seeking opportunities, which might explain the resistance to reform.

Should States Really Be Responsible For Housing? Here’s Why Fintechs or the Private Sector Can’t Really Be Of Help

I’ve had conversations around the issue of housing, and a common refrain is that it should be left to the private sector, and not everything requires government intervention. 

They make a fair point. Why can’t the private sector just solve this problem? After all, Nigerian entrepreneurs have shown remarkable innovation in sectors like telecommunications, fintech, and even petroleum refining. The Dangote refinery is a perfect example, where the government failed for decades, private capital stepped in with $19 billion and built the world’s largest single-train refinery.

So why can’t the same private sector magic work for housing?

1. Housing Is Infrastructure, Not Just A Consumer Product

Housing isn’t just another market commodity that competition can optimize. It’s basic infrastructure, like roads, electricity, or water supply. You don’t see private companies building highways to every village and charging tolls, though some people might argue that’s exactly what we need.

The Dangote refinery succeeded because petroleum refining is ultimately a profitable business with clear market dynamics. There’s global demand for refined products, predictable margins, and customers who can pay market rates. Housing is fundamentally different because shelter is a human right, not a luxury commodity.

There’s a right to shelter and housing, but no right to petroleum produce.

Every family needs a roof over their heads, regardless of their ability to pay market rates. The private sector, by definition, serves customers who can afford their products. That’s not evil, it’s just economics, capitalism for sure, but it’s how a market should work. 

However, it creates a massive gap between what people need and what the market can profitably provide.

2. The Mathematics of Market Failure

Let’s run the numbers on why pure market solutions fail for housing. In Lagos, the median household income is approximately ₦2.4 million annually. Using the international standard that housing costs shouldn’t exceed 30% of income, the maximum affordable housing price should be around ₦12 million.

But here’s the problem: it’s impossible to build a decent home in Lagos for ₦12 million. Land costs alone in most accessible areas start at ₦8-15 million. Construction costs, materials, labor, and developer profits push the final price to ₦25-40 million minimum. The math simply doesn’t work.

Private developers aren’t really greedy, they’re being rational, despite what people on X and Instagram will have you believe. They can’t sell homes at a loss, so they focus on the market segment that can afford their products: the upper middle class and wealthy. This is why you see luxury developments everywhere while affordable housing remains scarce.

The same dynamic played out in Singapore before government intervention. Private developers focused on high-end properties because the margins were better. Left to pure market forces, over 70% of Singaporeans would still be renting today, like in Lagos, instead of the 90% who now own homes.

3. Capital Requirements That Break Private Markets

Housing also faces capital requirements that dwarf most other sectors. A single housing development serving 1,000 families requires ₦20-50 billion in upfront capital. That’s more than the market capitalization of many Nigerian companies outside of banking and oil.

Even worse, housing has long payback periods,15 to 25 years for most buyers. Private investors want returns in 3-7 years maximum. This timing mismatch means private capital gravitates toward quick-flip luxury developments rather than long-term affordable housing.

Commercial banks won’t lend for affordable housing development at rates that make economic sense. If banks charge developers 25-30% for project financing, how can the final housing prices be affordable for middle-class buyers? The mathematics don’t work unless someone subsidizes the cost of capital.

This is exactly what happens in some developed countries. Government-sponsored entities provide cheap capital to housing developers and mortgage lenders. Even if the government doesn’t directly build houses, it ensures that private sector players have access to low-cost funds specifically for housing.

4. The Network Effects Problem

Housing also suffers from network effects that make pure private solutions insufficient. A house is only as valuable as the infrastructure around it, like roads, schools, hospitals, electricity, water, security. Private developers can’t build all of this infrastructure for individual projects; it requires coordinated public investment.

This is why most private developments in Nigeria are either luxury estates with private infrastructure (unaffordable for most people) or poorly serviced areas where residents struggle with basic amenities. The middle ground, affordable housing with decent infrastructure, requires government coordination. Even luxury estates need government infrastructure intervention because every rainy season, we’re awashed with news of Banana Island flooding or some estates not having light because of issues with the developers.

Singapore understood this early. Their Housing Development Board didn’t only build houses, but communities with schools, medical centers, shopping areas, and transport links. Lagos HOMS do the same thing too in their estates. Private developers could never coordinate this level of infrastructure development across multiple projects.

5. When Government Steps Back, Inequality Explodes

The United States offers a cautionary tale about what happens when the government reduces its role in housing. During the 1980s and 1990s, federal housing programs were scaled back in favor of market solutions. The result? Housing affordability crisis, increased homelessness, and entire cities where teachers, police officers, and firefighters can’t afford to live.

San Francisco is the extreme example. Average home prices exceed $1.5 million because supply is constrained and demand is high. The private market works perfectly for tech millionaires but fails completely for everyone else. Teachers live in cars, and janitors commute three hours each way because they can’t afford housing in the city where they work.

Nigeria is heading down this same path. Lagos property prices have doubled in two years while incomes remained flat. Left unchecked, we’ll end up with a city where only the wealthy can afford housing while everyone else is perpetually displaced to farther and farther suburbs like Mowe, Ikorodu, Epe and Sango.

6. Even Government-Subsidized Private Development Fails

The UK’s recent housing crisis shows why even well-intentioned partnerships with private developers don’t work. The British government spent billions subsidizing private developers through programs like Help to Buy, thinking they could stimulate affordable housing construction through market incentives.

The result? House prices increased even faster because developers simply raised prices to capture the government subsidies. First-time buyers found themselves competing against investors who knew the government would help cover costs. The subsidies became a transfer of public money to private developers rather than a solution for housing affordability.

Even worse, private developers in the UK began building smaller, lower-quality units to maximize profits while meeting government quotas. The infamous “rabbit hutch” apartments, some as small as 16 square meters, became common because developers prioritized quantity over quality to capture maximum subsidies.

This is exactly what we’re seeing in Nigeria’s limited government housing partnerships. Private developers inflate prices for “affordable” units, knowing that government programs will help cover the costs. The ₦50 million NHF-approved apartments in Ayobo that should cost ₦30-35 million are perfect examples of this dynamic.

Only Direct Government Provision Works

The evidence is clear: housing is too important and too complex for market solutions, even subsidized ones. Singapore’s success came from direct government provision through the Housing Development Board, not from subsidizing private developers.

When government builds and sells housing directly, it can:

• Price units based on affordability rather than profit maximization
• Ensure quality standards without cutting corners for higher margins
• Integrate housing with infrastructure development
• Create long-term communities rather than short-term developments

States like Lagos have the resources and authority to implement this model. They don’t need to wait for federal government approval or rely on private developers who have different incentives. They can build directly, finance affordably, and create the integrated communities that their residents need.

Other Considerations (Read: Rants)

The Renewed Hope Reality Check

The renewed hope project is a nice step in that direction, but it’s not enough, and not being built fast enough either.

President Tinubu’s Renewed Hope programme sounds impressive on paper. ₦100 billion committed, 10,112 housing units under construction across 14 locations. But let’s do the math.

The numbers sound impressive until you apply proper analysis to these figures. ₦100 billion sounds like a lot, but it’s barely enough to build 20,000-30,000 housing units at current construction costs. Nigeria needs 20-28 million housing units to close its housing deficit. At this rate, it would take 600-800 years to address the housing shortage, clearly not a modern solution.

Moreover, the location strategy reveals outdated thinking. Government housing projects in places like Ikorodu ignore the realities of modern work patterns. When young professionals work on Lagos Island but live in Ikorodu, the commute alone costs ₦500,000-₦1 million annually and takes 3-4 hours daily. Where time is the ultimate currency, these “affordable” housing projects become economically irrational.

Expensive Government Projects

Consider this pricing reality check: a 3-bedroom apartment in a block of flats in Ayobo costs ₦50 million, while a standalone 3-bedroom house in the same area costs ₦30 million. Even at MREIF’s 12% interest rate over 10 years, the total payment for the government apartment would be ₦66.6 million, more than double the cost of a comparable private property.

This pricing disparity is the result of a cozy relationship between government housing agencies and select developers who’ve mastered the art of inflating prices for “affordable” housing. These developers know that government programs will help cover the costs, so they price accordingly.

The math is straightforward: building costs in Ayobo shouldn’t exceed ₦25,000-₦30,000 per square meter for basic construction. A 120-square-meter apartment should cost ₦3-3.6 million to build, plus land costs of ₦8-12 million, bringing the total to ₦11-15.6 million. Add a reasonable 30% profit margin and you’re looking at ₦14-20 million maximum.

So how does a ₦20 million apartment become ₦50 million? Simple: layers of middlemen, inflated specifications that buyers don’t need, and the knowledge that government mortgage programs will subsidize the difference. 

The developers aren’t building affordable housing; they’re building wealth extraction vehicles disguised as social programs.

Lagos has done it before, when the Amuwo Odofin housing estate and many other low-cost housing estates were built in a short period of time. They were truly low cost, built by the government directly without layers of private contractors marking up costs at every stage. But today’s government projects involve private developers who treat “affordable housing” as a premium product category.

The tragedy is that these inflated prices make even government housing unaffordable for the people it’s supposed to serve. A civil servant earning ₦300,000 monthly can’t afford a ₦50 million apartment, even with NHF assistance. The system has been captured by developers who profit from artificial scarcity while ordinary Nigerians remain locked out.

Real Estate Appreciation Myth and Cash Flow Reality

When evaluating a property, my rule of thumb is: with the current rent in the area, and say some renovations to improve the property, can the rent in 10 years pay for the current price of the property? If the land value in the area is great, or it’s on 1000 square meters for example, as opposed to the standard 500 sqm, then I can extend it to 12 years rent.

This rental yield analysis is crucial because it reveals the fundamental disconnect in Nigeria’s property market, and why real estate might not be the investment asset many believe it to be. In most developed markets, properties yield 5-8% annually in rental income. In Nigeria’s major cities, rental yields have dropped to 3-5% due to inflated property prices and stagnant rental income growth.

Consider a ₦100 million property in Gbagada that rents for ₦4 million annually. That’s a 4% gross yield, which drops to about 2.5% after taxes, maintenance, and vacancy allowances. Now compare this to the risk-free alternatives available today:

• Nigerian Treasury Bills: 18-22% annually
• Federal Government Bonds: 15-19% annually
• Sukuk Bonds: 19.75% annually
• Even commercial bank fixed deposits: 15-20% annually

The opportunity cost becomes brutal when you run the numbers. That ₦100 million property generating ₦2.5 million annually after expenses could earn ₦18-20 million risk-free in government securities. You’re literally leaving ₦15-17 million on the table annually by choosing real estate over bonds.

The problem is compounded by mortgage interest rates. If you’re paying 27% on a mortgage while getting 4% rental yield, you’re losing 23% annually on your investment, before considering maintenance, taxes, and vacancy costs. Even with MREIF’s 12% rate, you’re still losing 8% annually compared to what the property generates.

This arithmetic simply doesn’t work, which explains why most property purchases in Nigeria are cash transactions. But even cash buyers face the opportunity cost problem. Why tie up ₦100 million in a property earning 2.5% when government bonds offer 15-19% with better liquidity?

Property appreciation is the usual counter-argument, but Nigerian real estate hasn’t delivered the returns people expect. Lagos property prices have doubled in two years, but this is largely due to naira devaluation rather than real value creation. In dollar terms, many properties have actually lost value or stayed flat.

The harsh reality is that Nigerian real estate works as an inflation hedge, not an investment. It preserves wealth against currency devaluation but rarely generates superior returns compared to properly structured financial assets. For most people, a diversified portfolio of bonds, REITs, and index funds would deliver better risk-adjusted returns than direct property ownership.

That said, not everything has to be measured financially. There’s a certain peace that comes with being in your own home, and not worrying about landlord shenanigans, and this will be even better if the mortgage system works as one can have the best of both worlds; have a house and also have an investment portfolio. 

The REITs Question

We need more REITs too, but can they compete against T-Bills, Green Bonds and Sukuk’s returns?

Real Estate Investment Trusts (REITs) could democratize property investment in Nigeria’s economy, but they face stiff competition from high-yielding government securities. Nigerian Treasury Bills currently offer 18-22% risk-free returns, while Nigerian REITs average only 5-7% annually.

This creates a fundamental investment dilemma. When government securities offer superior risk-adjusted returns with better liquidity, why would rational investors choose REITs? Recent data shows Nigeria’s Sukuk bonds paying around 19.75% per year, nearly triple the returns of most REITs.

For Nigerian REITs to compete effectively, they need complete structural innovation:

• Development REITs with Technology Integration: Instead of buying existing properties, these REITs should focus on developing smart buildings with integrated technology. Solar panels, battery storage, high-speed internet, and smart home features could command premium rents that justify higher returns.
• Affordable Housing REITs with Government Partnership: Partner directly with state governments to build affordable housing at scale. The REIT provides capital, the government provides land and regulatory support, and both share the returns. This model could target 8-12% returns while serving a social purpose.
• Commercial REITs Focused on High-Yield Sectors: Target logistics, warehousing, and e-commerce facilities that generate higher rental yields than traditional office buildings. The growth of online shopping and improved logistics infrastructure makes this a compelling opportunity.
• Infrastructure REITs Supporting Smart Cities: Invest in the infrastructure that supports urban development like parking facilities, business parks, integrated residential-commercial complexes. These assets often have more stable cash flows than standalone properties.
• Diaspora-Targeted REITs: Create REITs specifically designed for diaspora investment, with dollar-denominated returns or hedged currency exposure (there are risks of further naira devaluation that could badly impact government finances, given the forex exposure). This taps into the ₦3.2 trillion annual remittance market while providing stable returns.
• Build-to-Rent REITs: Focus on purpose-built rental properties rather than buying existing homes. Purpose-built rentals can achieve 6-8% rental yields compared to 3-5% for converted residential properties.

The key insight is that REITs can’t compete by doing what individual property investors do, but worse. They need to access opportunities and efficiencies that individuals can’t achieve; scale advantages, professional management, development expertise, and diversification across property types and locations.

REITs also need regulatory support to compete. The government should consider tax incentives for REITs that invest in affordable housing or infrastructure development. When REITs serve social purposes, they deserve tax treatment that helps them compete with government securities.

Most importantly, REITs need transparency and professional management that individual property ownership can’t provide. Real-time reporting, professional property management, and liquid secondary markets make REITs attractive even at lower yields than direct property ownership.

The Diaspora Goldmine We’re Ignoring

Nigerian diaspora remittances exceed $20 billion annually, more than the federal government’s entire capital budget. This represents massive untapped potential for housing finance innovation. The FMBN is developing a diaspora mortgage product, but current initiatives need amplification.

Diaspora Nigerians face unique challenges: they earn in foreign currencies but want to invest in naira assets; they have stable incomes abroad but limited credit history in Nigeria; they want to invest remotely but fear bureaucratic obstacles and corruption.

Think about it: a Nigerian software engineer in Toronto earning CAD $120,000 annually should qualify for a ₦100 million mortgage based on income alone. But try explaining our mortgage system to them. They’d rather buy property in Dubai or Atlanta where processes are transparent, timelines are predictable, and ownership rights are secure.

The missed opportunity is staggering. If just 10% of diaspora remittances went into housing finance, we’d have ₦3.2 trillion annually, enough to build over 200,000 homes per year. Instead, most diaspora investments go into buying raw land or funding family businesses because the formal housing finance system is too broken to access.

Technology and Transparency

What Nigeria needs is complete transparency in housing finance. Right now, getting accurate information about mortgage rates, terms, and requirements is like trying to find a needle in a haystack made of bureaucracy.

Here’s what real transparency would look like:

• Real-time Interest Rate Publishing: All mortgage lenders should publish rates, terms, and conditions online with regular updates. No more surprise discoveries that the 6% NHF rate is actually 27% for self-employed people.
• Blockchain Property Registration: Complete computerization of property registration with tamper-proof records. The current system where land titles can be forged or lost is a joke in 2025.
• Open Banking for Mortgages: Allow customers to compare mortgage products across lenders through unified platforms. Why should I visit five different banks to get mortgage quotes when technology can aggregate this information?
• AI-Powered Credit Assessment: Use comprehensive data to offer better rates to creditworthy borrowers. Your consistent bill payments, business revenue, and financial behavior should matter more than whether you have a traditional salary slip.
• Alternative Credit Scoring: Mobile money transactions, utility payments, and behavioral data for informal sector workers. The woman who runs a successful catering business and pays her electricity bills on time is a better credit risk than someone with a fancy job title but poor financial habits.

What Can Be Done

The housing crisis is a social and economic problem that undermines Nigeria’s development prospects. Countries with high homeownership rates typically have higher economic growth, better political stability, improved credit markets, and reduced income inequality.

Nigeria’s low homeownership rate perpetuates economic problems: businesses can’t access credit because owners lack property collateral; high housing costs leave families with no money for investment; young professionals emigrate partly because they can’t afford housing; rates, but below are some other to-dos that can unlock more value.  

1. Smart Interest Rate Policy

The Central Bank should create a differentiated mortgage rate regime, separate from general monetary and without property wealth, families remain vulnerable to economic shocks.

The most important thing to do is to build more houses and finance same at lower interest policy. Rather than a blanket reduction, it can be done by creating intelligent, risk-based pricing that reflects actual borrower risk rather than blanket high rates that assume everyone is equally likely to default.

Using AI and big data analytics, rates could be personalized based on borrower profiles, property types, and economic conditions. A civil servant with 15 years of consistent salary payments should get a different rate than a new graduate. A property in a well-planned estate with good infrastructure should command better rates than one in an area with poor utilities.

The CBN should establish a National Mortgage Rate Database where all lenders publish rates in real-time, creating transparency and competition. When borrowers can compare rates instantly, lenders will compete on price and service rather than relying on information asymmetry.

Most importantly, the CBN should create a special mortgage refinancing window at 8-12% specifically for residential mortgages. Banks can access this facility only for verified residential mortgages, ensuring that lower funding costs translate into affordable mortgage rates for consumers.

2. Blockchain Land Reform

The Land Use Act needs fundamental modernization, but we don’t need to wait for constitutional amendments. State governments should implement blockchain-based land registries with smart contracts for automatic transfers, eliminating multiple approvals and reducing costs from millions to thousands.

Here’s what this looks like in practice: every piece of land gets a unique digital identity stored on a blockchain. When you buy property, the smart contract automatically transfers ownership, updates tax records, and notifies relevant agencies. Instead of visiting 17 different offices over 15 months, the entire process completes in 72 hours.

Lagos State, with its tech-forward reputation, should lead this transformation. They already have the Lagos State Resident Registration Agency (LASRRA) database. Connecting this to property records through blockchain would create an integrated system where property ownership, taxes, and development approvals flow seamlessly.

The economic impact would be immediate. When property registration costs drop from ₦2.5 million to ₦50,000 and completion time drops from 15 months to 3 days, more people will formalize their property ownership. This unlocks the ₦300-900 billion in dead capital currently trapped in unregistered properties.

3. Smart Infrastructure Investment

Instead of building only analog houses, the governments should also focus on modern infrastructure like fiber optic networks, smart grids, IoT-enabled utilities etc that make areas attractive for private investment and remote workers.

The traditional approach of building houses first, then hoping infrastructure follows, is backward. Smart states should build integrated communities where digital infrastructure comes first. Imagine housing estates where every home has gigabit internet, solar panels with battery storage, smart water meters, and integrated security systems, and not priced into hundreds of millions like what obtains currently.

This approach will attract middle-class buyers who can afford higher prices because they’re getting superior value. It also attracts remote workers and digital nomads who need reliable infrastructure to work from anywhere. When Lagos competes with Dubai and Cape Town for remote workers, infrastructure quality becomes the differentiator.

The private sector will also build housing in areas with excellent infrastructure because demand is guaranteed.

4. Regulatory Sandboxes

We can toy with regulatory environments where fintech companies can experiment with mortgage products using cryptocurrency, peer-to-peer lending, and alternative credit scoring without full compliance burdens.

Nigeria’s fintech success story from mobile money to digital banking shows what happens when regulators create space for innovation. The same approach should apply to mortgage finance. Instead of forcing fintech companies to comply with banking regulations designed for traditional lenders, create specialized frameworks for mortgage innovation.

Think of peer-to-peer mortgage platforms where diaspora Nigerians can lend directly to local homebuyers. Or blockchain-based mortgage pools where investors can buy shares in mortgage portfolios. These models exist successfully in other countries but can’t scale in Nigeria because of regulatory restrictions.

The CBN should establish Mortgage Innovation Zones where companies can test new models with limited regulatory compliance requirements. Successful innovations can then be scaled across the broader market with appropriate safeguards.

5. Secondary Markets

We need to develop platforms where banks can sell mortgages to institutional investors, freeing capital for new lending while providing transparency and liquidity.

Currently, Nigerian banks hold mortgages on their books for the entire loan term, tying up capital that could be used for new lending. This is why mortgage lending remains limited, banks can’t afford to have billions tied up in 20-year mortgages.

A robust secondary market would allow banks to sell mortgages to pension funds, insurance companies, and other institutional investors who need long-term assets. The bank earns fees for originating and servicing the mortgage, while investors get stable returns over time.

Blockchain technology will ensure transparency and trust in these transactions. Every mortgage payment is recorded on the blockchain, providing real-time performance data to investors. This reduces the risk of the opacity and fraud that have plagued mortgage securitization in other countries.

6. State-Level Singapore Model Implementation

State governments should stop waiting for federal action and implement Singapore-style housing systems using their existing powers and resources.

Lagos State has the foundation: LBIC for development, Lagos Mortgage Board for financing, and sufficient resources to scale. They need to restructure these entities to serve first-time homebuyers specifically, not just high-net-worth individuals.

The model is straightforward: create a State Housing Development Board that builds affordable housing, provides financing at 8-12% interest rates, and accepts pension contributions as down payments. The board should be self-sustaining through land sales, loan repayments, and housing bonds.

Other states can adapt this model based on their resources and population needs. Rivers State, with its oil revenues, could create an even more ambitious program. 

7. Pension Fund Integration

Nigerian pension funds manage over ₦15 trillion in assets, mostly invested in government bonds yielding 15-19%. A significant portion of these funds should be redirected to housing finance at 10-12% rates, creating a win-win scenario.

The current system allows only 25% of RSA balances for housing equity, which is restrictive and bureaucratic. Singapore allows 100% of pension savings for housing because they understand that homeownership is retirement security.

Nigerian pension fund administrators should be required to allocate 20% of their portfolios to housing finance within five years. This would inject ₦3 trillion into the housing market, enough to build over 200,000 homes annually.

The regulatory framework should allow pension funds to invest directly in housing development, not just mortgage lending. This creates competition for traditional developers while ensuring that pension funds get the returns they need to meet their obligations.

8. Diaspora Integration

Nigerian diaspora remittances exceed $20 billion annually, more than the federal government’s entire capital budget. This represents massive untapped potential for housing finance innovation.

The FMBN’s diaspora mortgage product is a good start, but it needs amplification and simplification. Diaspora Nigerians should be able to apply for mortgages online, get approvals based on their foreign income, and complete purchases remotely through digital platforms.

We need special diaspora REITs that allow overseas Nigerians to invest in housing development with transparent returns and professional management. These REITs should be listed on international exchanges, making them accessible to diaspora investors.

Most importantly, we need to establish diaspora-focused mortgage banks that understand the unique needs of overseas Nigerians. These banks should have offices in major diaspora cities i.e. London, Houston, Dubai and provide services that traditional Nigerian banks can’t match.

9. Technology Integration

Every aspect of housing finance should be digitized: applications, approvals, documentation, payments, and transfers. The current system of physical visits, paper forms, and manual processing is inefficient and a barrier to access.

There needs to be a National Housing Portal where Nigerians can search for properties, compare mortgage rates, apply for loans, and complete purchases online. This portal should integrate with banks, developers, and government agencies to provide a seamless experience.

Use artificial intelligence for credit assessment, incorporating non-traditional data sources like mobile money transactions, utility payments, and business revenue. The informal sector worker who pays bills consistently is a better credit risk than someone with irregular income despite having a formal job.

We can also implement blockchain-based smart contracts for property sales, eliminating the need for multiple lawyers and reducing transaction costs by 60-80%. When property transfers are automated and transparent, more people will participate in the formal housing market.

10. Alternative Credit Scoring

Most Nigerians work in the informal sector but are excluded from mortgage finance because they lack traditional credit histories. This is economically irrational and socially harmful.

Develop alternative credit scoring models that include mobile money transactions, utility payments, rent payments, and business revenue.

The government needs to partner with fintech companies that already have data on informal sector workers. Companies like Flutterwave, Paystack, and Kuda have transaction data that reveals creditworthiness better than traditional bank statements.

Institutions can also create graduated mortgage products that start small and grow with the borrower’s financial capacity. Instead of requiring a ₦50 million mortgage upfront, offer a ₦15 million starter mortgage that can be increased as the borrower demonstrates payment capacity.

What Individuals Can Do

While we wait for systemic reforms, individuals can take practical steps to navigate the current broken system and position themselves for future opportunities.

1. Explore Alternative Locations

Instead of chasing overpriced Lekki or Victoria Island properties, consider emerging corridors with strong infrastructure fundamentals. The Lagos-Ibadan Expressway corridor through Mowe, Ibafo, and Arepo offers land at ₦5-15 million per plot versus ₦80-200 million in established Lekki areas.

Watch for government infrastructure projects that signal long-term growth. The ongoing Red Line rail project makes areas like Agbado, Iju, and Agege attractive for the next 5-10 years. Similarly, the proposed Fourth Mainland Bridge will transform property values in Ikorodu, Ibeju-Lekki, and parts of Ogun State.

Look for areas with existing commercial activity and decent road access. Magodo Phase 2 Extension, Omole Phase 2, and parts of Isheri North offer 40-60% lower prices than prime GRA like Ikeja areas while maintaining good infrastructure and appreciation potential.

2. Consider MREIF

MREIF’s 12% rate beats commercial bank mortgages at 25-35%, but the real advantage is the ₦100 million cap that covers quality housing in most Nigerian cities.

The application process requires minimum ₦10 million annual income, 6 months bank statements, and property insurance. Processing typically takes 6-8 weeks versus 4-6 months for traditional mortgages. The fixed rate protects against CBN policy changes that have pushed some variable mortgages from 18% to 35% in recent years.

Focus on properties in the ₦60-90 million range to leave room for renovation and furnishing costs.

3. Build Gradually

If it suits your circumstances, you might want to consider buying land and building in phases rather than taking large mortgages for completed properties. This approach reduces your financing needs and allows you to build equity gradually.

Start with land purchase in areas with basic infrastructure already in place. A 600-800 sqm plot in Mowe, Ibafo, or Arepo costs ₦8-15 million versus ₦30-80 million for similar plots in established areas. Ensure the land has proper documentation (C of O or Governor’s Consent) and survey plans.

• Phase 1 (₦15-25 million): Land purchase, perimeter fencing, gate, borehole, and electrical connection. This establishes your presence and prevents encroachment while you plan construction.
• Phase 2 (₦20-30 million): Foundation, ground floor structure, and roofing. Focus on quality materials for foundation and Damp Proof Course (DPC) to avoid future problems. This creates a livable space you can move into or rent out.
• Phase 3 (₦15-25 million): Upper floors, finishing, and external works. This staged approach typically saves 30-40% versus buying completed properties while giving you control over quality. A self-built 4-bedroom duplex might cost ₦60-80 million total versus ₦120-150 million for equivalent completed properties.

4. Join Cooperatives

Most existing cooperatives tend to focus on land acquisition rather than housing delivery. The cooperative model works best for land acquisition because it requires less capital coordination than house construction.

However, there’s a significant gap in cooperatives that can manage full housing development. Most lack the project management capacity, financing structures, and technical expertise to deliver completed houses. 

This creates an opportunity for tech-enabled cooperatives that can coordinate member contributions, manage construction timelines, and ensure quality delivery.

You can consider joining established cooperatives for land acquisition while checking out newer digital platforms for housing delivery. Some fintech companies are experimenting with cooperative savings products specifically for real estate, though most are still in early stages.  

5. Focus on Cash Flow

If you’re investing for income rather than pure speculation, target properties that generate at least ₦150,000-300,000 monthly rental income relative to your investment. With mortgage rates at 25-30%, any property that doesn’t cover its financing costs plus maintenance will steadily drain your resources.

I’d typically look for reasonably priced buildings in high-demand rental areas like Surulere, Ikeja, or Gbagada in Lagos. University towns like Ile-Ife, Zaria, or Nsukka also offer consistent student rental demand, though seasonal vacancy and strike periods require financial planning.

Multi-family properties (duplexes converted to flats) or mixed-use buildings with ground-floor shops and upper residential units typically yield more compared to single-family homes.

6. Document Everything

Nigerian property disputes can drag for decades without proper documentation. Keep originals of your Certificate of Occupancy, Survey Plans, Building Approvals, and Property Tax receipts in a bank safe deposit box. Scan everything to cloud storage with timestamps.

Beyond basic documents, maintain detailed records of all improvement costs, contractor payments, and rental income for tax purposes. Use property management apps or simple spreadsheets to track monthly cash flows, maintenance schedules, and tenant information.

Get building insurance through companies like Leadway or AIICO, even though it’s uncommon. Climate change is increasing flood and storm risks, and a ₦20 million property can be adequately insured for ₦100,000-200,000 annually. The peace of mind is worth it. 

7. Build Your Credit Profile

Nigerian banks are moving toward credit scoring systems similar to international markets. Start building your profile now by maintaining consistent relationships with 2-3 major banks and keeping your accounts active with regular transactions. I don’t recommend neo-banks because they don’t have the integration or reach that traditional banks have, even though they are more convenient and reliable for daily usage. 

Also, open a dedicated “housing fund” account and automate monthly transfers of ₦50,000-1,000,000 depending on your income. This creates a savings pattern that mortgage lenders recognize and provides your eventual down payment. After 24 months of consistent savings, you’ll have both the funds and the banking relationship necessary for mortgage applications.

For self-employed individuals, maintain separate business accounts, file annual tax returns even if you don’t owe taxes, and keep detailed income records. The informal sector worker who can show ₦200,000 monthly income for 18 months is more attractive to lenders than the salaried worker with irregular banking patterns.

8. Network and Learn

Join specific groups like the Real Estate Developers Association of Nigeria (REDAN) local chapters, or online communities like Nigerian Property Centre forums where active investors share market insights and deal opportunities.

Attend monthly meetings of investment clubs in your location too. Have contacts of real estate agents too as they often post about distressed property sales. 

Follow key industry figures like Snag Inspector, Scott Iguma, Folajomi Ibrahim, Propsult and more on social media for market insights and policy updates. When the CBN announces new mortgage policies or state governments launch housing programs, these sources provide analysis within hours rather than waiting for mainstream media coverage.

Before I Shut Down My Laptop

I don’t claim to be a housing expert, or to understand every nuance of this very complex ecosystem. 

There are topics I barely scratched, like the developers’ mortgage products that ask you to pay 50% before taking possession, which frankly seem designed to benefit everyone except the buyer. But in a market this broken, even suboptimal products can seem attractive when they’re the only game in town.

This post isn’t financial advice, obviously. I’ve done my research and these are my conclusions, but you need to do yours too. What’s true today might be obsolete tomorrow.

I suspect I’ll be writing more about housing and mortgage issues, especially as I navigate this maze myself. The system is so fundamentally broken that every interaction reveals new layers of dysfunction worth documenting.

My goal remains straightforward: acquire a block of flats where I can live in one unit and rent out the rest. I’m targeting properties where the rental income, after that initial 20-30% deposit, can cover the monthly mortgage payments. The math needs to work from day one; no hoping for future appreciation to bail me out of poor cash flow.

Whether this strategy survives contact with Nigeria’s mortgage reality remains to be seen. But after months of research and bank visits, I’m convinced that waiting for the system to fix itself is a luxury most of us can’t afford. Sometimes you have to work within broken systems while advocating for better ones.

Like I said earlier, the housing crisis isn’t only about individual homeownership, but entails economic development, wealth creation, and social stability. Until we solve it, we’re essentially asking an entire generation to build their lives on rented foundations.

I’ll keep documenting what I learn. In a market this opaque, every piece of real information has value. I hope you’ll document your own experience too, and I’ll love to read about it and learn about how you’ve navigated the system and/or alternatives.