MORTGAGE INSTITUTION ACT

An Act regulates the establishment and operation of mortgage institutions for home lending and property financing. It targets mortgage banks, homebuyers, developers, and the Central Bank as regulator. This promotes home ownership and a stable housing finance market.

What Is This Policy?

An Act that regulates the establishment, operation, and supervision of mortgage institutions in Nigeria, providing a legal framework for home lending and property financing. Central Bank of Nigeria Act; Banks and Other Financial Institutions Act (BOFIA); Companies and Allied Matters Act; Land Use Act 1978; National Housing Fund Act; Federal Mortgage Bank of Nigeria Act

Mortgage banks and primary mortgage institutions Homebuyers seeking mortgage financing Developers relying on mortgage finance Central Bank of Nigeria as regulator

Who Does It Target?

Individuals and households seeking mortgage financing to acquire homes. Primary mortgage institutions (PMIs) licensed to provide housing loans. The Central Bank of Nigeria and the Federal Mortgage Bank of Nigeria regulating mortgage lending. Real estate developers and property buyers accessing housing finance.

What Does It Aim to Achieve?

Promote home ownership through regulated mortgage lending, protect depositors and borrowers, and develop a robust housing finance market in Nigeria.

Key Features

Licensing Requirement: All mortgage institutions must obtain a licence from the Central Bank of Nigeria before operating. Capital Requirements: Prescribes minimum paid-up capital for mortgage institutions to ensure financial soundness. Supervision Framework: Empowers the CBN to supervise, audit, and if necessary, take over failing mortgage institutions. Consumer Protections: Requires clear disclosure of mortgage terms including interest rates, fees, and repayment conditions.

Current Status

Rollout Stage: Active - Federal Mortgage Bank of Nigeria and primary mortgage institutions are operational Coverage: Nationwide Beneficiaries: Homebuyers, depositors in mortgage banks, housing sector Funding: Private capital of licensed institutions; National Housing Fund contributions

How to Access

Mortgage institutions: apply for a licence from the CBN Borrowers: must meet individual institution credit criteria National Housing Fund contributions are required for NHF mortgage access Application method: Borrowers apply to licensed Primary Mortgage Institutions (PMIs). Institutions apply to CBN for licensing.

Important Terms

Mortgage terms must be in writing and disclosed before signing Default may lead to property foreclosure after due process NHF mortgages are limited to NHF contributors

Official Resources

Website: https://www.cbn.gov.ng Contact: Central Bank of Nigeria (CBN) / Federal Mortgage Bank of Nigeria

Legal Framework

Central Bank of Nigeria Act; Banks and Other Financial Institutions Act (BOFIA); Companies and Allied Matters Act; Land Use Act 1978; National Housing Fund Act; Federal Mortgage Bank of Nigeria Act