Financing of Real Estate/Real Estate finance at its name implies is simply concerned mainly with decision about fund that are involved in Real Estate transaction. Most of the transaction involves the exchange of cash for Real Estate (property). Furthermore, most of the cash borrowed money from financial institution such as mortgage banks the political fluctuation and slump in the Nigerian Economy has gross effect on various sector of the economy especially Real Estate Sector. This project is intended looking at the impact of depressed economy on Real Estate Financing.        


Title page i

Certification ii

Dedication iii

Acknowledgment iv

Abstract v

Table of content vi


1. Introduction 1

1.1 Background of the study 1 – 2 

1.2 Aim 2

1.3 Objective 2

1.4 Statements of the problem 2 – 3 

1.5 Research methodology 3 

1.6 Scope of the study 3 

1.7 Justification of the study 3 – 4 

1.8 Limitation of the study 4 


2. Literature review 5 

2.1 Definition of terms 5 – 6  

2.2 Concept of financing 6 – 8 

2.3 Sources of finance 9 – 10 

2.4 Concept of real estate 10 – 11 

2.5 The real estate finance 11 

2.6 Characteristics of real estate 12 

2.7 Source of fund 12 – 15 

2.8 Instrument of financing 15 

2.9 Role of financial intermediaries 16 

2.10 Micro and macro-economic factors affecting real estate 16 – 17 

2.11 Real estate financing in strategy area  17 

2.12 The problem of financing of real estate 17 – 18 

2.13 Indicators of depressed economy  18 – 19 

2.14 The effect of depressed economy on real estate financing 19 


3.0 Research Methodology  20 

3.1 Introduction 20

3.2 Target population/sample frame 20

3.3 Data requirement 20

3.4 Data collection 21

3.4.1 Primary source of data 21

3.4.2 Secondary source of data 21

3.5 Sample size 21

3.6 Sampling techniques 22

3.6.1 Purposive sampling 22

3.7 Types of sampling method 22

3.8 Method of data presentation and analysis 23


4.0 Data presentation, analysis and interpretation 24

4.1 Data presentation 24

4.2 Data analysis 24 – 28 

4.3 Data interpretation        28 


5. Summary of findings, recommendation and conclusion 29

5.1 Summary of findings 29

1. Recommendation 29 – 30 

5.3 Conclusion  30


Appendix   32 – 33 




In the minds of most people “financing” as its name implies conjure up visions of inexplicable exchanging of piece of paper which involves something called “interest” that take place generally anywhere.

Those who trail their interest in finance swiftly find out that you don’t have to go that level before getting involved in a financial transaction. The major brokerage houses have branches in most communities. 

Furthermore there are usually commercial banks and savings institutions as well as microfinance banks and many communities, regardless of their various sizes. Infact, financial transaction can take place almost anywhere there is no need to go to a commercial bank. All you need is two or more populace.

Chika E Udechwuku (2008) says real estate financing is the process of acquiring funds or capital generally for the purpose of development in order to gain control over the property or assets there are two ways of classifying estate finance which tend to overlap themselves

1. Whether the financing is internal or external to the real estate owners or developer.

2. The above two depend on the third which is the duration of estate in question.

Sherman J. Maise (1987) also says real estate finance is concerned mainly with the decisions by which many resources are raised for the purpose of owing or developing real estate. Although all decision could be sometimes are made by a single person two or three separate are usually active in a financing transaction. 

In addition most of the cash is borrowed from financial institution such as Mortgage Banks. Moreover financing of real estate or real estate finance involves evaluating the situation adjourning the transaction and deeding the best method of financing of real estate given the risk and certainty of situation. Given many ways in which financing can be structured professionals must understand how the alternative differ in their ability to increase potential gains and raise or lower the risk of failure.

New pressures have altered traditional mortgage lending in years back, most mortgage money came from local lenders. Every loan was treated differently, and once made loans were held until the debt was paid off. Today mortgage are traded in national market. In 1987 Sherman J. Maise also stated that:

1. A users of capital developers and owners of real Estate must obtain financings in order to build own operate properties. Very different financial analysis i.e. behind decisions made by the largest group of users, those who wish to own home compare top the decisions made in buying income properties or land.

2. Funds are supplied by a variety of individuals. Firms institutions and government. Some of these institutions will be discussed. Government and their agencies have become increasingly important sources of funds as have foreign investors. However the importance of serious groups has been growing mortgage and real estate brokers helps to locate funds and advice users about the best sources of funds.

1.2 AIM

The main aim is to carry out the study on the impact of depressed economy on real estate financing


1. To examine the impact of depressed economy on real estate financing.

2. To observe how finance can be acquired and the variety of financing that is appropriate to real estate development. 

3. To examine the tool used in financing of real estate and steps to take to sourcing for real estate finance.


Financing of real estate has a lot challenges faced by particular investors in Real Estate finance whether it is a home owner seeking a loan, someone planning to sell or invest in real property an employee of a financial institution active in lending and building a mortgage portfolio, or a mortgage or investment banker developing new ways to raise money on securities require certain basic knowledge to function well.

In line with this, this project will see to what determine interest rate level, who lends on mortgage and how can home buyers obtain affordable financing even when the economy is depressed.   


The procedure followed in the selection of information and data for the work include both primary and secondary sources of information.

Primary source include the procurement of some vital information interview, personal observation and the use of questionnaire.

Secondary source of information were through the use of textbooks relating to real estate finance in Nigeria. References were also made to journals conference papers and other relevant published material we also consult organizations.


The study will see to financing of real estate with particular references to Osun state. In carrying out this study there is need to investigate some various theories of financing and how these have an effect on the efficiency of real estate.

This study also covers the activities of government on housing finance. This dissertation limited itself to those what being found in Osogbo.


Financing real estate especially in a depressed economy is a big task to individual investor, government and cooperate bodies. It is however important to carryout a study on this topic in order to ameliorate the fear being exercised by real estate investors during the period when economy is depressed. The study will equally bring out various issues and problems that may be encountered in financing real estate in a depressed economy hence one may need to prepare and take precautions for such entilalitie. In addition various sources of financing real estate shall be made known to people in the course of the study. 


During the course of the study some problem were encountered, which however gave limitation to the study such problem are as follows financial constrains and time factors.  



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