Challenges of Housing Finance and It Implications on Home Ownership by the Low and Medium Income Earners in Nigeria (A Case Study of Port Harcourt, Rivers State)

Finance for housing development has become a perennial problem to certain categories of individuals in Nigeria. As a result of this financial need, the government devised a means of raising fund through compulsory deductions of 2.5% from workers earnings following the enactment of the National Housing Policy (NHP).The Federal Mortgage bank of Nigeria became the regulatory body through which the fund can be accessed by the Primary Mortgage Institutions (PMIs) and in turn disburse to the contributors in the form of housing finance loan. This study examines the challenges of financing housing development for the low and medium income earners in Port Harcourt, Rivers State, Nigeria. The study explores the sources of housing finance available to the low and medium income earners as well as the requirements for accessing housing loans through the PMIs, performance of the PMIs and most importantly ways of mitigating the problems low and medium income earners face in accessing housing finance loans. To achieve these objectives, the structured and unstructured questionnaires were designed for the study. Three hundred and eighty five structured questionnaires were administered to the low and medium income earners and five unstructured questionnaires were administered to the officials of the PMIs. The quantitative method was used for data analysis and the result of the analysis shows that the difficult requirements laid down by the PMIs to grant housing loans have prevented the low and medium income earners from having access to the National Housing Fund through the PMIs. The study also revealed that if the informal sources are advanced upon, it can serve as an alternative source of housing finance. The study suggests that stringent measures should be put in place to check the activities of the PMIs.