Business News

How we overcame the hurdle of 20% equity requirement for mortgages – Ogundimu 

Mr. Kehinde Ogundimu, Managing Director/CEO of the Nigeria Mortgage Refinance Company (NMRC) has said that the company approached the National Pension Commission (PenCom) to address the difficulties faced by Nigerians in meeting the 20% down payments for mortgages. 

Ogundimu stated this while speaking as a panelist at Naijaonpoint Industry Outlook themed “How to succeed in Nigeria’s Real Estate in 2024: Challenges & Opportunities in a High-Cost Environment. 

He noted that the company observed that many Nigerians struggle to meet the 20% equity down payment required for mortgages. 

According to him, this challenge isn’t unique to Nigeria; even in the US, it typically takes seven years to accumulate this amount. 

Ogundimu noted that in order to address the obstacle, the company collaborated with stakeholders and approached the National Pension Commission (PenCom) to propose allowing individuals to access 25% of their Retirement Savings Account (RSA) balances for mortgage down payments. 

This approach according to him ensures that funds are directed towards essential investments like housing rather than non-essential purchases. 

He noted that after a year or two of advocacy, this initiative materialized, enabling individuals to utilize 25% of their RSA balance as a down payment for house purchases. 

Ogundimu noted that the regulatory constraints currently prevent the company from extending its services further down the value chain to refinance mortgages. 

He said the primary achievement thus far has been addressing the major barriers within the mortgage industry, particularly the issue of tenor mismatch.