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, stated this at the official launch of the product on Tuesday in Kano.

Mr Rabe-Darma said the initiative was designed to provide an alternative pathway to homeownership for Nigerians whose financial or ethical convictions might discourage them from using conventional interest-based mortgages.

He said more than six million Nigerians contributed to the NHF, but the bank had historically granted fewer than 500 individual mortgages annually.

According to him, the new product will help address the gap by extending housing finance opportunities to contributors previously excluded from conventional mortgage arrangements.

The minister said the launch was the first public product under the National Mortgage Industry Policy issued by the ministry in July.

He said the policy directed FMBN to disburse at least 40 per cent of annual NHF collections as mortgages and increase its maximum loan limit from N50 million to N85 million.

Mr Rabe-Darma added that the policy targeted 2,000 mortgages in 2026 and 5,000 annually by 2028, with applications to be processed within 30 working days under a simplified eight-document requirement.

He said the policy also sought to increase NHF membership from six million to 10 million by 2028 and ensure that between 30 per cent and 40 per cent of FMBN mortgage bookings went to informal-sector workers, including market traders, artisans and transport workers.

“Housing is an economic asset; it creates jobs and builds household wealth. President Bola Tinubu’s Renewed Hope Agenda places housing at the heart of inclusive growth. We must move from discussion to execution,” he said.

The minister urged employers, cooperative societies, developers, Takaful operators, primary mortgage banks, pension fund administrators and state governments to collaborate with FMBN to expand access to the product.

Earlier, 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.

Mr Usman-Osidi said the product would provide an additional option for eligible NHF contributors who preferred non-interest-based financing.

He stated, “Ijarah Muntahia Bittamleek is based on an Islamic finance arrangement commonly described as lease-to-own.

“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 noted that the bank selected Kano State for the launch because of its commercial importance, large working population and demand for affordable housing.

According to him, the product is open to eligible NHF contributors across the country, irrespective of religion or location.

He noted that the bank designated its housing project in the Bichi Local Government Area of Kano State, developed by AYAB Nigeria Ltd., for the pilot implementation of the scheme.

Mr Usman-Osidi said the minister would proceed to the project site after the ceremony to hand over keys to the first set of beneficiaries under the product.

He said the bank was committed to implementing the initiative with transparency, professionalism and accountability.

The managing director added that the product, alongside other housing finance interventions and the planned Rent Assistance Product, would strengthen efforts to improve access to affordable housing in Nigeria.

Kano State Governor, Abba Kabir-Yusuf, described the launch as an apt and significant milestone in Nigeria’s housing finance sector.

Mr Kabir-Yusuf, represented by the state Commissioner for Housing Development, Ibrahim Yakubu-Adamu, said the initiative would improve access to affordable housing for people. 

(NAN)