MORTGAGE INSTITUTIONS AMENDMENT ACT 2016
Act · Finance
Policy date: 2016-01-01
An Act amends the Mortgage Institutions Act by updating licensing requirements and capital standards for primary mortgage banks. It targets primary mortgage banks and the Central Bank of Nigeria to regulate housing finance. This strengthens the sector and increases affordable housing options.
What Is This Policy?
An Act amending the Mortgage Institutions Act to update the licensing requirements, capital adequacy standards, and regulatory framework for primary mortgage banks (PMBs) in Nigeria, strengthening the institutional base for housing finance.
Who Does It Target?
Primary mortgage banks and housing finance institutions Central Bank of Nigeria as the regulator Homebuyers seeking mortgage financing Real estate developers and housing corporations
What Does It Aim to Achieve?
To strengthen the primary mortgage banking sector, enhance consumer protection in housing finance, increase the volume of mortgage lending, and improve the availability of affordable housing finance across Nigeria.
Key Features
Revised Capital Requirements: Increases minimum paid-up capital for PMBs to ensure financial stability. Licensing Regime: Updates criteria for granting, renewing, and revoking PMB operating licences. Consumer Protection: Strengthens disclosure requirements on mortgage terms, fees, and interest rates. Foreclosure Procedures: Clarifies and streamlines the process for recovering mortgage debt. CBN Oversight: Expands CBN supervisory and enforcement powers over mortgage institutions.
Current Status
In force. The amended Mortgage Institutions Act governs the licensing and operations of primary mortgage banks in Nigeria, actively enforced by the Central Bank of Nigeria.
Apply for a mortgage loan directly at any licensed primary mortgage bank Open a National Housing Fund (NHF) account through an employer or PMB Provide evidence of income, property documents, and meet minimum contribution requirements Application method: Licensed primary mortgage banks across Nigeria; Federal Mortgage Bank of Nigeria
Important Terms
Mortgage interest rates must be disclosed in full before loan agreement signing Foreclosure is only permissible after prescribed notice periods and default conditions are met NHF contributions are required for access to FMBN-backed mortgage loans
Official Resources
Website: www.cbn.gov.ng / www.fmbn.gov.ng Policy Summary Document | Federal Republic of Nigeria
Legal Framework
The Mortgage Institutions Amendment Act 2016 amended the Mortgage Institutions Act, which is the primary legislation governing primary mortgage banks. It operates under the Central Bank of Nigeria Act 2007, the Banks and Other Financial Institutions Act 2020 (BOFIA), and the National Housing Fund Act. The Federal Mortgage Bank of Nigeria Act provides the complementary framework for secondary mortgage operations. International alignment is with IUHF (International Union for Housing Finance) standards on mortgage regulation.