MORTGAGE INSTITUTIONS ACT

An Act regulates primary mortgage institutions for home lending, property financing, and fund mobilization. It targets these institutions, homebuyers, developers, and the Central Bank as supervisor. This ensures financial soundness and supports housing development.

What Is This Policy?

An Act that regulates the establishment, operation, and supervision of primary mortgage institutions (PMIs) in Nigeria, providing a legal framework for home lending, property financing, and the mobilisation of mortgage funds. 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

Primary Mortgage Institutions (PMIs) and mortgage banks 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 for home purchase or construction. 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 developers accessing housing finance.

What Does It Aim to Achieve?

Promote home ownership through regulated mortgage lending, protect depositors and borrowers, develop a robust housing finance market, and ensure the financial soundness of mortgage institutions.

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 contributors may access NHF mortgages through accredited PMIs 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