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Tag: FMBN

  • SEC, FMBN partner on non-interest mortgages

    SEC, FMBN partner on non-interest mortgages

    Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) and the Federal Mortgage Bank of Nigeria (FMBN) have reached agreement on a strategic collaboration that will see the development of a robust non-interest mortgage framework.

    The agreement, reached at the weekend in Abuja, seeks to create and regulate viable, Sharia-compliant financing structures that will enable millions of Nigerians, particularly those excluded from conventional interest-based loans, to access affordable homeownership.

    With Nigeria’s housing deficit estimated to be over 28 million units, the initiative is a potential game-changer. It directly addresses a key barrier to homeownership: the affordability and religious compliance of mortgage products for a significant segment of the population.

    Director General, Securities and Exchange Commission (SEC), Dr. Emomotimi Agama said the SEC would provide the necessary regulatory guidance and framework to facilitate the issuance of Sukuk and other non-interest capital market products to fund mortgages.

    He said: “Our collaboration with FMBN is pivotal to unlocking long-term financing for the housing sector. By creating a clear regulatory pathway for non-interest mortgage-backed securities, we can attract ethical investors, both domestic and international, to channel funds into this critical area. This will create a virtuous cycle of funding, construction, and ownership”.

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    Managing Director, Federal Mortgage Bank of Nigeria (FMBN), Mr. Shehu Osidi, said the collaboration marked a critical step in fulfilling the bank’s mandate to provide affordable housing for all Nigerians.

    “For a long time, a substantial number of our citizens have been unable to participate in the National Housing Fund (NHF) scheme due to the interest-based nature of conventional mortgages. This partnership with SEC is a strategic response to that gap.”

     We are committed to developing non-interest mortgage products that are not only ethical and inclusive but also financially sustainable,”Osidi said.

    Also commenting, housing and finance expert, Mr Ebilate McYoroki , welcomed the development describing it as “long overdue.”

    He said: “This is a masterstroke in financial inclusion. It taps into a vast pool of potential homeowners and investors who have previously been on the sidelines. If implemented transparently, it could significantly accelerate the pace of housing delivery in the country”.

    He said the successful implementation of this framework is expected to not only reduce the housing deficit but also stimulate the construction industry, create jobs, and foster greater financial inclusion, ultimately contributing to national economic growth.

    Unlike conventional mortgages that charge interest, non-interest financing is based on principles of risk-sharing, asset-backing, and equitable returns. The models under consideration include Musharakah or Diminishing Partnership, under which the bank and the customer jointly purchase a property. The customer gradually buys out the bank’s share through periodic payments, eventually becoming the sole owner. There is also Ijara or Lease-to-Own, where the bank buys the property and leases it to the customer for a fixed period. A portion of the rental payments goes towards the eventual ownership transfer and Murabaha or Cost-Plus Sale, through which the bank acquires the property and sells it to the customer at a pre-agreed markup, payable in installments.

  • FMBN raises NHF loan limit to N50m

    FMBN raises NHF loan limit to N50m

    • Bank pledges affordable housing for citizens boss

    The Federal Mortgage Bank of Nigeria (FMBN) has increased the maximum National Housing Fund (NHF) mortgage loan from N15 million to N50 million per applicant.

    The bank said the increase is meant to expand access to affordable housing, particularly for high-income earners in the private sector.

    FMBN’s Managing Director/Chief Executive Officer Shehu Usman Osidi announced this in a goodwill message he delivered through the bank’s Executive Director of Loans and Mortgage Services, Dr. Muhammad Sani Abdu, at the FMBN Day during the 46th Kaduna International Trade Fair.

    Osidi said the increased loan ceiling has sparked renewed interest in the NHF scheme with applications now being processed more efficiently.

    The FMBN boss reaffirmed the bank’s commitment to addressing Nigeria’s housing deficit by continuously evolving its mortgage products to cater for all income brackets — low, middle, and high.

    “In this regard, several initiatives and products are being introduced to meet the diverse needs of NHF contributors,” he said.

    Read Also: FMBN increases national housing fund mortgage loan to N50m

    Osidi highlighted FMBN’s unique position as the only institution offering single-digit mortgage interest rates of six to seven per cent through its unique products, such as the NHF Mortgage Loan, Individual NHF Construction Loan, Home Renovation Loan, and Rent-to-Own scheme.

    Despite the nation’s economic challenges, the managing director assured the bank’s customers that FMBN would maintain affordable mortgage rates to sustain home ownership opportunities for Nigerians.

    He hailed the Kaduna Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA) for organising the trade fair, which he described as a vital platform for advancing discussions on national development.

    Dr. Abdu was accompanied at the event by FMBN’s Group Head of Corporate Communications, Mrs. Virginia Jang; the bank’s Kaduna Zonal Manager, Mr. Abubakar Ahmed; the Kaduna Branch Manager, Mrs. Hadiza Hamidu, and other staff members from the bank’s headquarters and Kaduna branch.

  • FMBN increases national housing fund mortgage loan to N50m

    FMBN increases national housing fund mortgage loan to N50m

    The Federal Mortgage Bank of Nigeria (FMBN) has raised the maximum National Housing Fund (NHF) Mortgage Loan from N15 million to N50 million per applicant to enhance access to affordable housing, particularly for high-income earners in the private sector.

    FMBN’s Managing Director/Chief Executive, Shehu Usman Osidi, announced the development in a goodwill message delivered by the Bank’s Executive Director of Loans and Mortgage Services, Dr. Muhammad Sani Abdu, during the 46th Kaduna International Trade Fair.

    Osidi stated that the increased loan ceiling has generated fresh interest in the NHF scheme, with applications now being processed more efficiently.

    He reaffirmed FMBN’s commitment to bridging Nigeria’s housing deficit, emphasizing that the bank will continue evolving its mortgage products to cater to all income brackets—low, middle, and high earners.

    “In this regard, several initiatives and products are being introduced to meet the diverse needs of NHF contributors,” he stated.

    He highlighted FMBN’s unique position as the only institution offering single-digit mortgage interest rates of 6-7%, through products such as the NHF Mortgage Loan, Individual NHF Construction Loan, Home Renovation Loan, and Rent-to-Own scheme.

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    Despite economic challenges, he assured that FMBN would maintain affordable mortgage rates to sustain homeownership opportunities for Nigerians.

    Osidi also commended the Kaduna Chamber of Commerce, Industry, Mines & Agriculture (KADCCIMA) for organizing the Trade Fair, describing it as a vital platform for advancing discussions on national development.

    Dr. Abdu was joined at the event by FMBN’s Group Head of Corporate Communications, Mrs. Virginia Jang, Kaduna Zonal Manager, Mr. Abubakar Ahmed, Kaduna Branch Manager, Mrs. Hadiza Hamidu, and other staff from the Bank’s headquarters and Kaduna branch.

  • FMBN set to deliver 343 housing units

    FMBN set to deliver 343 housing units

    The Managing Director/Chief Executive of the Federal Mortgage Bank of Nigeria (FMBN), Shehu Usman Osidi, has pledged the bank’s commitment towards the delivery of 343 housing units for members of the Abuja Metropolitan Management Council (AMMC) Cooperative Society.

    In a statement made available to The Nation by the Group Head, Corporate Communications, Mrs Virginia Jang, she said the leadership of the council had visited the bank to request the approval and release of the second tranche of funding to complete its ongoing project of 343 housing units designed to ease the housing needs of its members.

    The project, which is  delivered under the Cooperative Housing Development Loan (CHDL), is one of the bank’s numerous projects across the country to provide access to affordable housing to cooperative societies whose members are contributors to the National Housing Fund (NHF).

    Osidi applauded the management of AMMC for judiciously utilising the first tranche of funding that amounted to N500 million, released by the bank to them in 2023. Expressing the bank’s readiness to support continuity of the project, he emphasised that, “the bank is open to doing business with organisations that demonstrate seriousness.”

    Read Also: FMBN denies involvement in N40m scheme

    The MD noted that the bank approves loans based on milestones, after verifying that funds disbursed have been utilised in a judicious manner. Accordingly, he informed that the bank would do its due diligence after which the next tranche of funding would be released. He added that the Executive Director of Loans and Mortgage Services, Dr. Muhammad Sani Abdu would facilitate the process, expressing hope of seeing the 343 housing units completed and commissioned in no distant time.

    Also speaking during the visit, Mr. Obuah appreciated the bank for its invaluable assistance to the AMMC Cooperative Society. He revealed that the cooperative had acquired 4.2 hectares of land from the Federal Capital Development Authority (FCDA) to build residential houses for its members and commenced the construction of the 343 housing units in 2020.

    The Coordinator further noted that the Cooperative Society had secured N500 million as the first tranche of funding from the Bank in 2023 and contributed N220 million as equity. He added that out of the 343 houses under construction, 30 have been completed and are ready to be handed over to the allottees.

    The Bank’s support for this initiative marks another significant effort in bridging the housing deficit in the country through tailored products, services, and interventions.

  • FMBN to tackle housing deficit

    FMBN to tackle housing deficit

    The Federal Mortgage Bank of Nigeria (FMBN) hosted Mr. Mark Weinrich, Secretary General of the International Union for Housing Finance (IUHF) in a bid to accelerate solutions to Nigeria’s housing deficit.

    In his remarks at the at the Bank’s headquarters in Abuja, FMBN Managing Director/CEO, Mr. Shehu Usman Osidi underscores FMBN’s strategic push to leverage global expertise and resources to provide affordable housing for millions of Nigerians.

    He hailed the visit as a landmark moment, emphasizing the importance of international partnerships in closing Nigeria’s staggering housing deficit.

    “Our collaboration with IUHF will fast-track access to technical assistance, global best practices, and foreign investment that are essential for transforming Nigeria’s housing sector,” Osidi declared.

    Read Also: FMBN denies involvement in N40m scheme

    He noted that central to FMBN’s efforts is its recent ₦100 billion Bankable Off-Taker Guarantee under the Federal Government’s Renewed Hope Agenda.

    He explained that the initiative will provide single-digit interest financing for potential homeowners, significantly lowering barriers to homeownership for low- and middle-income Nigerians.

    “This guarantee will empower thousands of Nigerians to become homeowners while boosting confidence in the real estate sector,” Osidi said.

    Mr. Weinrich lauded FMBN’s commitment to innovation and affordability, pledging IUHF’s full support.

    He stated that the FMBN’s approach to addressing housing finance challenges is impressive.

    He reassured that IUHF is ready to provide strategic advice and global templates to help Nigeria meet its ambitious housing goals.

    According to Osidi: “FMBN’s bold moves include a partnership with Shelter Afrique to attract foreign direct investment and the creation of a digital National Mortgage Assets Registry to unlock Nigeria’s dead capital.

    “New products like non-interest rent-to-own schemes and diaspora mortgage loans are being introduced to expand access to affordable housing.”

    Despite the enormity of the challenge, Osidi expressed confidence in FMBN’s ability to deliver results.

    “Our focus on prudent management, business process automation, and innovative financing solutions is already yielding measurable success. This partnership with IUHF will accelerate our impact,” he said.

    He maintained that with Nigeria’s housing deficit estimated in the millions, this collaboration signals a crucial turning point. By aligning with global leaders like IUHF, FMBN is positioning itself to drive transformative change in the housing sector, offering hope to millions of Nigerians seeking affordable homes.

  • FMBN denies involvement in N40m scheme

    FMBN denies involvement in N40m scheme

    Federal Mortgage Bank of Nigeria (FMBN) has disassociated itself from claims linking it to a N40 million mortgage pre-financing scheme promoted by Housing Exchange Africa (HXAfrica).

    In an official disclaimer issued at the weekend, Virginia Jang, FMBN’s Group Head of Corporate Communications, clarified that the bank has no formal partnership or approval arrangement with HXAfrica concerning the alleged scheme.

     “The management of the Federal Mortgage Bank of Nigeria wishes to disclaim reports in the media by HXAfrica (Housing Exchange Africa) on a purported N40 million mortgage pre-financing scheme, which referred to FMBN as a partner,” Jang stated.

        She further explained that while HXAfrica had applied for engagement with the bank, no approvals had been granted, and no formal agreements had been finalized.

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        Jang emphasized that FMBN remains committed to advancing housing initiatives, including the forthcoming Diaspora Mortgage Scheme, which is being developed in collaboration with the National Diaspora Commission (NIDCOM)

        “While the FMBN and NIDCOM remain committed to the roll-out of the Diaspora Mortgage Scheme after obtaining the necessary regulatory approvals, we will endeavour to provide official information and updates on our respective websites and social media handles to prevent the public from being misled,” she added.

        The statement also revealed that NIDCOM had issued a similar disclaimer regarding the HXAfrica scheme, urging the public to be cautious of unverified claims.

        FMBN assured citizens that details of the official Diaspora Mortgage Scheme would be communicated through authorized channels once regulatory approvals are secured.

        The bank reiterated its dedication to delivering credible housing solutions while encouraging the public to rely only on updates from its verified platforms.

  • How FMBN is revolutionising home ownership for Nigerians

    How FMBN is revolutionising home ownership for Nigerians

    For many Nigerians, owning a home is a distant dream due to high property costs, limited access to affordable financing and bureaucratic hurdles. However, the Federal Mortgage Bank of Nigeria (FMBN) is bridging this gap through its National Housing Fund (NHF) Scheme, a compulsory savings programme that provides affordable housing finance for Nigerians. BOLAJI OGUNDELE delves into the workings of the NHF Scheme, its innovative products and how it is making homeownership a reality for millions of Nigerians.

    For many Nigerians, owning a home is a lifelong aspiration, symbolising stability, security and success. It’s a fundamental human right, as affirmed by the UN-Habitat, which emphasises the importance of access to safe, secure, habitable and affordable housing.

    However, the journey to home ownership can be daunting, especially for low-and middle-income earners, who face numerous challenges. High property costs, limited access to affordable financing and bureaucratic hurdles are just a few of the obstacles that stand in the way of Nigerians realising their dream of home ownership.

    The situation is further exacerbated by the home rental segment, dominated by shylock landlords and impacted by inflationary trends, leaving many Nigerians struggling to make ends meet. It’s this dire situation that the Federal Mortgage Bank of Nigeria (FMBN) was established to address.

    Mandated by the FMBN Act 82 1993 to serve as the apex mortgage institution in Nigeria, the Bank has taken on the role of Nigerians’ best chance at affordable housing. Primarily, the Bank was empowered to administer and manage the National Housing Fund (NHF), a contributory savings scheme established in 1992 under the National Housing Fund Act of 1992.

    The primary objective of the NHF is to provide affordable housing finance to Nigerians, especially low-and middle-income earners, who might otherwise struggle to access housing loans from traditional financial institutions.

    The motivation behind the Scheme was the urgent need to combat Nigeria’s growing housing deficit, which was aggravated by the lack of affordable financing options for home ownership.

    Prior to the establishment of the NHF, the housing finance ecosystem in Nigeria was practically non-existent, with the few available commercial players showing limited interest and their loans largely inaccessible to the average Nigerian. High-interest rates, stringent loan conditions, and short repayment terms made mortgages unattainable for most Nigerians, particularly those in the low-income brackets.

    Recognising these barriers, the NHF Scheme was conceived as an affordable, long-term solution to provide affordable mortgage loans and products. By mandating contributions from Nigerian workers, the NHF sought to create a sustainable pool of funds from where contributors can access single-digit loans for home acquisition and/or construction. The goal was to democratise access to housing finance and make home ownership a reality for a broader segment of the population.

    Through the NHF Scheme, FMBN is helping Nigerians to realise their dream of home ownership, providing a sense of fulfilment and a better life. By addressing the challenges of affordable housing, the Bank is contributing to the overall well-being of Nigerians and the country’s socio-economic development.

    A closer look at the Scheme

    The National Housing Fund (NHF) Scheme, managed by the Federal Mortgage Bank of Nigeria (FMBN), is a ground-breaking initiative designed to make home ownership a reality for Nigerians. This compulsory savings programme requires workers in both the public and private sectors to contribute a percentage of their monthly income to the Fund, fostering a culture of savings and investment in housing.

    One of the Scheme’s innovative features is its inclusiveness. Not only are workers in the formal sector required to contribute 2.5 per cent of their monthly income, but economically viable individuals in the informal sector are also encouraged to participate. This recognises the significant role that workers in the informal sector play in the country’s labour market.

    To ensure widespread participation, the Scheme mandates contributions from all Nigerian workers earning the national minimum wage and above. This applies to both public and private sector employees, who contribute 2.5 per cent of their monthly income to the Fund.

    Meanwhile, informal sector workers are required to calculate their monthly income and contribute 2.5 per cent of that amount, gaining access to housing finance through a range of products.

    By harnessing the power of collective savings, the NHF Scheme is revolutionising access to affordable housing in Nigeria, making it possible for millions of Nigerians to own their own homes.

    Refunds to contributors

    A unique aspect of the NHF Scheme is its provision for refunds to contributors upon retirement or the attainment of 60 years. Refunds are for all NHF contributors at the end of their active years of work, whether or not the beneficiary benefits from the scheme. Total contributions made throughout the individual’s active years along with a two per cent interest are put together and paid to the individual.

    In essence, the NHF Scheme provides a safety net for those who may not have been able to secure a mortgage in the course of their active years, while also ensuring there’s something significant waiting for every retiree who contributed to the scheme.

    Either way, whether a contributor secures the NHF loan or not, they still benefit immensely by getting back all their savings, which they may have been impossible to do without the NHF Scheme.

    Low-interest mortgage loans and longer repayment tenure

     A defining feature of the NHF Scheme is its provision of low-interest mortgage loans to contributors. Unlike commercial bank loans, which come with high-interest rates ranging from 15 per cent to 25 per cent, loans gotten through the NHF Scheme come with an affordable interest rate of six per cent. This significant reduction in interest makes its housing loans more accessible and affordable, particularly for low and middle-income earners who are the primary beneficiaries of the Scheme.

    Moreover, the NHF Scheme allows for extended repayment periods of up to 30 years, depending on the borrower’s age and loan terms. This long repayment tenure reduces the monthly financial burden on beneficiaries, making it easier for them to manage their mortgage obligations without compromising their overall financial stability.

    FMBN’s innovative products available to NHF subscribers:

    FMBN NHF mortgage loan

    The National Housing Fund (NHF) Mortgage Loan is a flagship product of the Federal Mortgage Bank of Nigeria (FMBN). It is designed to provide affordable housing loans to Nigerian workers who contribute to the NHF Scheme. This facility is granted at four per cent interest to accredited Primary Mortgage Banks (PMBs) for on-lending at six per cent to NHF contributors over a maximum tenure of 30 years, which is secured by the mortgaged property.

    A contributor can access up to ₦50 million from the Fund through an accredited and licensed PMB as a mortgage loan to build or buy a home after six months of continuous contributions. The long repayment period and low interest rate make this product the most affordable mortgage option in Nigeria as of today, significantly reducing the financial burden on homeowners.

    FMBN Rent-To-Own

    The FMBN rent-to-own scheme is an innovative housing solution that allows Nigerians to live in FMBN-funded properties as tenants while gradually paying towards ownership. This product is designed to ease the burden of large upfront payments typically required to purchase a home. Under this scheme, tenants make affordable monthly, quarterly, or annual rent payments, with a portion of the rent contributing towards the purchase of the property. Over time, as the tenant pays off the balance, the home fully becomes theirs.

    With an interest of seven per cent of the price of the property annually, this approach makes homeownership more accessible, especially for low and middle-income earners who may struggle with traditional mortgage requirements. Also, no equity contribution is required from the subscriber before moving into the property.

    FMBN home renovation loan

     The FMBN Home Renovation Loan (HRL) has become one of the bank’s most successful products. It is aimed at helping existing home owners improve or expand their homes. This product offers up to N1 million at a single-digit interest rate, with a repayment period of up to five years.

    The loan is specifically designed for individuals who already own a property but need financial assistance to make renovations, repairs or upgrades. The Home Renovation Loan provides an affordable alternative to high-interest loans, enabling home owners to enhance their living conditions without overextending their finances. This product is ideal for families that need to upgrade their living conditions without taking on large, high-interest loans.

    Read Also: FMBN to tackle non-performing loans

    FMBN cooperative housing development loan

    The Cooperative Housing Development Loan (CHDL) is a collective financing solution that enables cooperative societies to obtain funds for constructing houses for their members. Under this scheme, a cooperative society finds a land, identifies a developer, designs their own estate and then approaches the bank for construction finance. Once the homes are completed, FMBN then goes ahead to provide mortgage loans to individual members of the cooperative at six per cent interest rate to enable them off take the homes. This product leverages the strength of group savings and collective bargaining, making it easier for members to access affordable housing finance.

    The loan can cover the cost of land acquisition, site development and construction, providing a comprehensive solution for cooperative societies aiming to deliver housing projects for their members.

    FMBN individual construction loan

    The FMBN Individual Construction Loan is designed for Nigerians who already own titled land and wish to build their homes. This loan provides up to N50 million, depending on the applicant’s income and repayment capacity, with an interest rate of seven per cent per annum.

    The loan covers the cost of building materials, labour and other construction-related expenses. The repayment period is up to 15 years, depending on the applicant’s age and income. This product empowers individuals to construct their dream homes without the need for large upfront capital, providing a flexible financing option for self-build projects.

    FMBN Diaspora NHF mortgage loan

    The Diaspora NHF Mortgage Loan is tailored for Nigerians living abroad who wish to own property in Nigeria. While it is yet to be fully operational, the Bank has finalised modalities with other parties such as the Nigerians in the Diaspora Commission (NiDCOM) and the Central Bank of Nigeria on technical issues. This product will allow Nigerians in the diaspora to access mortgage loans for purchasing, building, or renovating homes in Nigeria. Like the NHF Mortgage Loan, it offers up to N50 million at a competitive interest rate of nine per cent per annum.

    The loan is repayable over a period of up to 10 years, making it a convenient option for diaspora Nigerians to invest in real estate back home, thereby contributing to the development of the Nigerian housing sector as well as reducing the country’s housing deficit.

    FMBN introduces rental assistance loan

    In a bold move to address the housing challenges faced by Nigerians, the FMBN has introduced the Rental Assistance Loan, an innovative micro-housing loan product designed to provide financial relief to individuals and families burdened by high rental costs.

    This groundbreaking product, soon to be launched, offers a maximum loan amount of N2, 000,000, subject to the beneficiary’s affordability, and is specifically tailored to alleviate the financial strain of rental payments for eligible Nigerians. The Rental Assistance Loan is accessible, affordable, and flexible, making it an attractive solution for those who have struggled to secure housing finance through traditional means.

    To be eligible, applicants must be contributors to the National Housing Fund (NHF) Scheme for at least six months, with a consistent payment history. This emphasizes the importance of enrolling in the NHF Scheme, which serves as a gateway to accessing FMBN’s products and achieving homeownership aspirations.

    In a country where owning a home often seems like a distant dream, the NHF Scheme and FMBN’s innovative products are bridging the gap, making home ownership more attainable than ever before. By providing practical solutions to housing challenges, the NHF Scheme is revolutionizing the housing landscape in Nigeria, offering hope to those who thought homeownership was out of reach.

  • How FMBN is revolutionising home ownership for Nigerians

    How FMBN is revolutionising home ownership for Nigerians

    For many Nigerians, owning a home is a distant dream due to high property costs, limited access to affordable financing and bureaucratic hurdles. However, the Federal Mortgage Bank of Nigeria (FMBN) is bridging this gap through its National Housing Fund (NHF) Scheme, a compulsory savings programme that provides affordable housing finance for Nigerians.  BOLAJI OGUNDELE delves into the workings of the NHF Scheme, its innovative products and how it is making homeownership a reality for millions of Nigerians.

    For many Nigerians, owning a home is a lifelong aspiration, symbolising stability, security and success. It’s a fundamental human right, as affirmed by the UN-Habitat, which emphasises the importance of access to safe, secure, habitable and affordable housing.

    However, the journey to home ownership can be daunting, especially for low-and middle-income earners, who face numerous challenges. High property costs, limited access to affordable financing and bureaucratic hurdles are just a few of the obstacles that stand in the way of Nigerians realising their dream of home ownership.

    The situation is further exacerbated by the home rental segment, dominated by shylock landlords and impacted by inflationary trends, leaving many Nigerians struggling to make ends meet. It’s this dire situation that the Federal Mortgage Bank of Nigeria (FMBN) was established to address.

    Mandated by the FMBN Act 82 1993 to serve as the apex mortgage institution in Nigeria, the Bank has taken on the role of Nigerians’ best chance at affordable housing. Primarily, the Bank was empowered to administer and manage the National Housing Fund (NHF), a contributory savings scheme established in 1992 under the National Housing Fund Act of 1992.

    The primary objective of the NHF is to provide affordable housing finance to Nigerians, especially low-and middle-income earners, who might otherwise struggle to access housing loans from traditional financial institutions.

    The motivation behind the Scheme was the urgent need to combat Nigeria’s growing housing deficit, which was aggravated by the lack of affordable financing options for home ownership.

    Prior to the establishment of the NHF, the housing finance ecosystem in Nigeria was practically non-existent, with the few available commercial players showing limited interest and their loans largely inaccessible to the average Nigerian. High-interest rates, stringent loan conditions, and short repayment terms made mortgages unattainable for most Nigerians, particularly those in the low-income brackets.

    Recognising these barriers, the NHF Scheme was conceived as an affordable, long-term solution to provide affordable mortgage loans and products. By mandating contributions from Nigerian workers, the NHF sought to create a sustainable pool of funds from where contributors can access single-digit loans for home acquisition and/or construction. The goal was to democratise access to housing finance and make home ownership a reality for a broader segment of the population.

    Through the NHF Scheme, FMBN is helping Nigerians to realise their dream of home ownership, providing a sense of fulfilment and a better life. By addressing the challenges of affordable housing, the Bank is contributing to the overall well-being of Nigerians and the country’s socio-economic development.

    A closer look at the Scheme

    The National Housing Fund (NHF) Scheme, managed by the Federal Mortgage Bank of Nigeria (FMBN), is a ground-breaking initiative designed to make home ownership a reality for Nigerians. This compulsory savings programme requires workers in both the public and private sectors to contribute a percentage of their monthly income to the Fund, fostering a culture of savings and investment in housing.

    Read Also; Stop distracting Tinubu with 2027 presidential election- Mumuni warns APC chieftains 

    One of the Scheme’s innovative features is its inclusiveness. Not only are workers in the formal sector required to contribute 2.5 per cent of their monthly income, but economically viable individuals in the informal sector are also encouraged to participate. This recognises the significant role that workers in the informal sector play in the country’s labour market.

    To ensure widespread participation, the Scheme mandates contributions from all Nigerian workers earning the national minimum wage and above. This applies to both public and private sector employees, who contribute 2.5 per cent of their monthly income to the Fund.

    Meanwhile, informal sector workers are required to calculate their monthly income and contribute 2.5 per cent of that amount, gaining access to housing finance through a range of products.

    By harnessing the power of collective savings, the NHF Scheme is revolutionising access to affordable housing in Nigeria, making it possible for millions of Nigerians to own their own homes.

    Refunds to contributors

    A unique aspect of the NHF Scheme is its provision for refunds to contributors upon retirement or the attainment of 60 years. Refunds are for all NHF contributors at the end of their active years of work, whether or not the beneficiary benefits from the scheme. Total contributions made throughout the individual’s active years along with a two per cent interest are put together and paid to the individual.

    In essence, the NHF Scheme provides a safety net for those who may not have been able to secure a mortgage in the course of their active years, while also ensuring there’s something significant waiting for every retiree who contributed to the scheme.

    Either way, whether a contributor secures the NHF loan or not, they still benefit immensely by getting back all their savings, which they may have been impossible to do without the NHF Scheme.

    Low-interest mortgage loans and longer repayment tenure

     A defining feature of the NHF Scheme is its provision of low-interest mortgage loans to contributors. Unlike commercial bank loans, which come with high-interest rates ranging from 15 per cent to 25 per cent, loans gotten through the NHF Scheme come with an affordable interest rate of six per cent. This significant reduction in interest makes its housing loans more accessible and affordable, particularly for low and middle-income earners who are the primary beneficiaries of the Scheme.

    Moreover, the NHF Scheme allows for extended repayment periods of up to 30 years, depending on the borrower’s age and loan terms. This long repayment tenure reduces the monthly financial burden on beneficiaries, making it easier for them to manage their mortgage obligations without compromising their overall financial stability.

    FMBN’s innovative products available to NHF subscribers:

    FMBN NHF mortgage loan

    The National Housing Fund (NHF) Mortgage Loan is a flagship product of the Federal Mortgage Bank of Nigeria (FMBN). It is designed to provide affordable housing loans to Nigerian workers who contribute to the NHF Scheme. This facility is granted at four per cent interest to accredited Primary Mortgage Banks (PMBs) for on-lending at six per cent to NHF contributors over a maximum tenure of 30 years, which is secured by the mortgaged property.

    A contributor can access up to ₦50 million from the Fund through an accredited and licensed PMB as a mortgage loan to build or buy a home after six months of continuous contributions. The long repayment period and low interest rate make this product the most affordable mortgage option in Nigeria as of today, significantly reducing the financial burden on homeowners.

    FMBN Rent-To-Own

    The FMBN rent-to-own scheme is an innovative housing solution that allows Nigerians to live in FMBN-funded properties as tenants while gradually paying towards ownership. This product is designed to ease the burden of large upfront payments typically required to purchase a home. Under this scheme, tenants make affordable monthly, quarterly, or annual rent payments, with a portion of the rent contributing towards the purchase of the property. Over time, as the tenant pays off the balance, the home fully becomes theirs.

    With an interest of seven per cent of the price of the property annually, this approach makes homeownership more accessible, especially for low and middle-income earners who may struggle with traditional mortgage requirements. Also, no equity contribution is required from the subscriber before moving into the property.

    FMBN home renovation loan

     The FMBN Home Renovation Loan (HRL) has become one of the bank’s most successful products. It is aimed at helping existing home owners improve or expand their homes. This product offers up to N1 million at a single-digit interest rate, with a repayment period of up to five years.

    The loan is specifically designed for individuals who already own a property but need financial assistance to make renovations, repairs or upgrades. The Home Renovation Loan provides an affordable alternative to high-interest loans, enabling home owners to enhance their living conditions without overextending their finances. This product is ideal for families that need to upgrade their living conditions without taking on large, high-interest loans.

    FMBN cooperative housing development loan

    The Cooperative Housing Development Loan (CHDL) is a collective financing solution that enables cooperative societies to obtain funds for constructing houses for their members. Under this scheme, a cooperative society finds a land, identifies a developer, designs their own estate and then approaches the bank for construction finance. Once the homes are completed, FMBN then goes ahead to provide mortgage loans to individual members of the cooperative at six per cent interest rate to enable them off take the homes. This product leverages the strength of group savings and collective bargaining, making it easier for members to access affordable housing finance.

    The loan can cover the cost of land acquisition, site development and construction, providing a comprehensive solution for cooperative societies aiming to deliver housing projects for their members.

    FMBN individual construction loan

    The FMBN Individual Construction Loan is designed for Nigerians who already own titled land and wish to build their homes. This loan provides up to N50 million, depending on the applicant’s income and repayment capacity, with an interest rate of seven per cent per annum.

    The loan covers the cost of building materials, labour and other construction-related expenses. The repayment period is up to 15 years, depending on the applicant’s age and income. This product empowers individuals to construct their dream homes without the need for large upfront capital, providing a flexible financing option for self-build projects.

    FMBN Diaspora NHF mortgage loan

    The Diaspora NHF Mortgage Loan is tailored for Nigerians living abroad who wish to own property in Nigeria. While it is yet to be fully operational, the Bank has finalised modalities with other parties such as the Nigerians in the Diaspora Commission (NiDCOM) and the Central Bank of Nigeria on technical issues. This product will allow Nigerians in the diaspora to access mortgage loans for purchasing, building, or renovating homes in Nigeria. Like the NHF Mortgage Loan, it offers up to N50 million at a competitive interest rate of nine per cent per annum.

    The loan is repayable over a period of up to 10 years, making it a convenient option for diaspora Nigerians to invest in real estate back home, thereby contributing to the development of the Nigerian housing sector as well as reducing the country’s housing deficit.

    FMBN introduces rental assistance loan

    In a bold move to address the housing challenges faced by Nigerians, the FMBN has introduced the Rental Assistance Loan, an innovative micro-housing loan product designed to provide financial relief to individuals and families burdened by high rental costs.

    This groundbreaking product, soon to be launched, offers a maximum loan amount of N2, 000,000, subject to the beneficiary’s affordability, and is specifically tailored to alleviate the financial strain of rental payments for eligible Nigerians. The Rental Assistance Loan is accessible, affordable, and flexible, making it an attractive solution for those who have struggled to secure housing finance through traditional means.

  • ‘Only FMBN offers single-digit mortgage finance’

    ‘Only FMBN offers single-digit mortgage finance’

    Managing Director, Federal Mortgage Bank Nigeria (FMBN), Shehu Osidi, has reiterated the bank’s  dedication to making housing accessible to all Nigerians.

    He said only the FMBN can provide mortgage financing at single-digit interest rates.

    Osidi made these remarks during a courtesy visit by a delegation from the Ekiti State Government in Abuja.

    He emphasised the unparalleled position of FMBN in extending mortgage financing at interest rates in the single digits, a rate significantly lower than those offered by commercial banks.

    “At FMBN, all financed houses are inherently affordable. Our mandate is rooted in providing accessible mortgage financing for all.

    “While commercial banks typically offer mortgage rates ranging from 25 per cent to 28 per cent, FMBN stands out by offering mortgages at rates as low as six per cent, with its construction finance window at 9.5 per cent,” Osidi said.

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    He stressed that FMBN is the sole institution in the country capable of financing both construction and mortgages at single-digit rates.

    Addressing concerns about affordability, Osidi underscored the relative nature of the concept, noting that housing affordability is contingent upon individual circumstances and definitions.

    He highlighted various financing options available through FMBN, including cooperative development loans tailored to affordability thresholds and individual construction loans.

    He said: “We have created many loan windows, for instance we have the corporative development loan windows, which allows members of a corporative society to actually design the kind of houses they want, according to the affordability of their members.

    “Individuals can also benefit. Once they contribute to our national housing program for six months, they become eligible to apply for our mortgage loans depending on their affordability.

    “We also have individual construction loan windows where an individual with C of O can actually approach the FCMB to take a loan to build house by himself.”

    Gboyega Oloniyo, the Special Adviser to the Governor on Housing and Mortgage Development, representing the Governor of Ekiti State, emphasized the state government’s commitment to addressing housing challenges.

    Governor Biodun reiterated the importance of housing as a basic necessity, expressing plans to collaborate with FMBN to tackle the issue of rising building material costs.

    The governor unveiled ambitious plans to deliver 2,000 housing units in Ekiti state, catering to various segments of the population, including civil servants and the diaspora community.

    Gboyega commended Osidi for his compassionate leadership at FMBN, acknowledging the pivotal role of the institution in advancing housing accessibility across Nigeria.

  • Tinubu appoints management leaderships for FMBN, FHA

    Tinubu appoints management leaderships for FMBN, FHA

    President Bola Tinubu has approved the reconstitution of the executive management teams of two parastatals under the Federal Ministry of Housing and Urban Development.

    A statement yesterday in Abuja by his Special Adviser on Media and Publicity, Ajuri Ngelale, said the parastatals are: the Federal Mortgage Bank of Nigeria (FMBN) and the Federal Housing Authority (FHA).

    The statement said Mr. Shehu Usman Osidi is the new Managing Director/CEO of FMBN, Mr. Ibidapo Odojukan will serve as Executive Director (Finance & Corporate Services), Mr. Muhammad Sani Abdu will serve as Executive Director (Loans & Mortgage Services), and Ms. Chinenye Anosike will serve as Executive Director (Business Development & Portfolios).

    For the FHA, Oyetunde Oladimeji Ojo is the new Managing Director/CEO; Mr. Mathias Terwase Byuan will serve as Executive Director (Housing Finance & Accounts); Mr. Umar Dankane Abdullahi will take the Executive Director (Business Development) position; Oluremi Omowaiye will be Executive Director (Project Implementation); and Ezekiel Nya-Etok will serve as Executive Director (Estate Services).

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    The statement said the President’s approval was part of a holistic approach to repositioning the national housing and urban development sector to meet the present and future needs of Nigerian families.

    It added: “The new FMBN CEO, Mr. Shehu Osidi, is a banker with over 30 years of work experience, including 13 years of experience in mortgage banking. He is an alumnus of Harvard University’s Kennedy School of Government as well as the University of Pennsylvania’s Wharton School of Housing Finance.

    “New FHA CEO, Oyetunde Ojo, is a former member of the House of Representatives with over a decade of work experience in the housing and hospitality industries. He holds a Master’s degree in Peace and Conflict Studies from the University of Greenwich, United Kingdom.

    “In view of President Bola Tinubu’s historic approval of the establishment of Building Materials Hubs across all six of the nation’s geo-political zones; financing and establishment of a National Social Housing Fund for low income and vulnerable groups, and land reforms to collaboratively streamline access to land across all states and unlock nearly $300 billion of dead capital in the sector, his expectations are high that the above-named appointees will hit the ground running in the delivery of affordable housing for millions of Nigerians in need, while providing millions of new job opportunities for Nigeria’s talented youth population presently searching for work.”