FMBN’s Non-interest Mortgage as Alternative to Solving Housing Deficit
By Richard Imhoagene According to data from the Housing Market Information Portal (HMIP) of the Federal Government’s National Housing Data Steering Committee, Nigeria has a staggering housing deficit of just
In Nigeria, there is a significant housing deficit of around 15 million units, which is not only a matter of constructing more homes but also ensuring affordable access to decent living spaces for ordinary Nigerians. This problem extends beyond mere construction and touches upon the challenges of accessing suitable financing arrangements aligned with Nigerians' income, circumstances, and preferences, particularly for those who abstain from interest-based transactions.
This has prompted the Federal Mortgage Bank of Nigeria (FMBN) to introduce the Non-Interest Mortgage Product, formally known as the Non-Interest Lease-to-Own Housing Scheme. Launched in October 2026, it follows the Ijarah Muntahia Bittamleek (IMBT) model and is designed to address the diverse needs of the population, including those who have ethical or religious reservations against interest-based financing.
The Non-Interest Mortgage Product opens up alternative financing avenues for eligible National Housing Fund (NHF) contributors, allowing them to access housing and eventually own their properties. This initiative aims to enhance inclusion in Nigeria's mortgage market by providing an alternative to conventional interest-based financing, which has historically limited participation.
Unlike traditional mortgage financing, where borrowers repay loans with interest, the Non-Interest Lease-to-Own Scheme operates on a lease-to-own model. In this arrangement, the property is owned by the financial institution, leased to the customer at an agreed rental rate, and eventually transferred to the customer upon completion of the lease term.
This approach offers up to N50 million in financing, a lease period of up to 30 years, and incorporates insurance to mitigate risks. By offering a financing option that does not rely on interest payments, this scheme opens up homeownership opportunities to a broader range of Nigerians, catering to those with different financial preferences and ethical considerations.
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