FMBN launches lease-to-own non-interest mortgage for housing fund contributors
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The Federal Mortgage Bank of Nigeria has launched Ijarah Muntahia Bittamleek, a lease-to-own product aimed at National Housing Fund contributors who cannot or will not use interest-based mortgages.
The Federal Mortgage Bank of Nigeria (FMBN) has launched a non-interest mortgage product, Ijarah Muntahia Bittamleek, to expand access to homeownership among eligible National Housing Fund (NHF) contributors. The product, also known as lease-to-own, allows beneficiaries to occupy homes through an agreed rental arrangement and acquire ownership at the end of the contract, subject to fulfilment of the agreed terms.
The Minister of Housing and Urban Development, Muttaqha Rabe-Darma, announced the launch in Kano on Tuesday, saying it was designed to provide an alternative pathway for Nigerians whose financial or ethical convictions might discourage them from using conventional interest-based mortgages. He said more than six million Nigerians contribute to the NHF, but the bank had historically granted fewer than 500 individual mortgages annually.
According to the minister, the product is the first public offering under the National Mortgage Industry Policy issued by the ministry in July. The policy directs FMBN to disburse at least 40 per cent of annual NHF collections as mortgages, targets 2,000 mortgages in 2026 rising to 5,000 annually by 2028, and requires applications to be processed within 30 working days under a simplified eight-document requirement. It also seeks to raise NHF membership from six million to 10 million by 2028 and to ensure that between 30 per cent and 40 per cent of FMBN mortgage bookings go to informal-sector workers, including market traders, artisans and transport workers.
The Managing Director of FMBN, Shehu Usman-Osidi, said the initiative was intended to make housing finance more inclusive and responsive to the diverse needs of Nigerians. “Our objective is to widen the mortgage market, provide an additional pathway to homeownership and ensure that eligible NHF contributors are not excluded from housing finance,” he said.
Rabe-Darma urged employers, cooperative societies, developers, Takaful operators, primary mortgage banks, pension fund administrators and state governments to work with FMBN to expand access to the product. “Housing is an economic asset; it creates jobs and builds household wealth,” he said, adding that the administration's housing agenda now needed to move “from discussion to execution.”