The Federal Mortgage Bank of Nigeria (FMBN) is introducing a non-interest rent-to-own mortgage lending program to increase financial inclusion.
This was stated in a statement signed and delivered yesterday in Abuja by Lawal Isa K/Sauri, Group Head, Corporate Communications FMBN.
According to the statement, the unique housing product, which was recently approved by the FMBN Board of Directors, is meant to allow Nigerians to own their homes without having to engage in an interest-bearing transaction utilizing a mortgage.
The product was created by FMBN to address the issues that qualified Nigerians facing home ownership through the National Housing Fund (NHF) Scheme experience due to the interest-based structure of the Bank’s existing housing products.
The program is based on a rent-to-own model, which allows beneficiaries to move into FMBN and non-FMBN-funded properties and pay monthly, quarterly, or annual rentals toward full ownership.
The product’s financing structure is based on Ijarah Muntahia Bitamleek’s non-interest financing contract (Lease to Own).
FMBN keeps ownership of the property until the financing term expires or the recipient decides to acquire the property at any moment throughout the lease period.
Nigerians who contribute to the National Housing Fund (NHF) Scheme are eligible for the FMBN non-interest rent to own product.
It covers both FMBN and non-FMBN funded properties with a maximum price of N15million. Beneficiaries have the options to pay to own the property in monthly/quarterly or annual rental instalments over thirty (30) years depending on their age and years in service.
In his remarks, the Manager Director / Chief Executive Officer FMBN, Arc. Ahmed Dangiwa noted that the introduction of the non-interest mortgage product represents a historic milestone in the Bank’s drive to bolster access to inclusive mortgage financing for all Nigerians.
“I am excited that we have been able to fix this decades-old problem. For over thirty years, a significant number of the over five million Nigerians who contribute to National Housing Fund (NHF) Scheme have been prevented from taking advantage of their rights because of the interest-based nature of FMBN housing products.
“What we have done with this product is to create a financing arrangement that recognizes, respects, and speaks to their genuine concerns for inclusion.”
