Abstract:
Tanzania have housingdeficit both in rural and urban areas. In order to improve this
gap, Mortgage loan is the key elements whichcanenable the increase of construction
of houses for all classes of income earners such as highlass, low income earners and
middle class. National housing as a corporation and Individual clients faces different
challenges in acquisition of Mortgage loans.
The major objective of the study is to identify those challenges which affect
acquisition of mortgage loans from different financial institution. A detailed
literature review was done in order to set the study within its wide context and to
show the reader how the study supplements’ the work has already done. A case study
was adopted where National Housing Corporation was chosen as a case.
The findings of the study shows major factors which hindering the acquisition of
mortgage loans in differentfinancial institutions which includes High interest rates
charged by financial institutions, lack of long termfunds, weak collateral securities
of the applicants, low income to Tanzanians where by most of them have no enough
ability to pay back the mortgage loans ,strictly and too long applications procedures
from financialinstitutions, High taxes on building materials and tax charged on
houses for sale which increase the Mortgage product cost, Lack of enough capital to
the bank to provide mortgage loans, Lack of enough Affordable houses and lack of
enough skills or knowledge for Mortgage management.
The findings reveals that there is the relationship between dependent variable and
independent variables where by Mortgage accessibility have direct relationship
between bank capital, ability to repay the mortgageloan, strong collateral securities,
creditpolicies and procedures and loan repayment period
The researcher recommended that the government should minimize tax liability on
building materials and sale of houses so that it can reduce the cost of houses for sale
Government charges VAT of 18% on Building material and houses sold which
increases the cost of houses. The interest rate charged on Mortgage loans should be
minimized so that the total cost cost of purchasing the house will be low and all
income earners can manage to purchase and acquire the mortgage loan from financial
institution.
