FG Launches Non-interest Mortgage in Kano, Opens Door to All NHF Contributors

Ahmad Sorondinki in Kano

The federal government has launched the Federal Mortgage Bank of Nigeria’s (FMBN) non-interest mortgage product, Ijarah Muntahia Bittamleek Lease-to-Own, in Kano, pledging that no Nigerian should have to choose between homeownership and deeply held financial convictions.

The product was formally launched yesterday by the Minister of Housing and Urban Development, Dr. Muttaqhah Darma, alongside the Managing Director of FMBN, Shehu Osidi.

Under the arrangement, an eligible Nigerian occupies a home through a lease agreement, makes agreed rental payments over a defined period and becomes the owner at the end of the term.

Both speakers described the product as asset-backed, transparent, regulated and open to every eligible contributor to the National Housing Fund (NHF), irrespective of religion.

Darma said more than six million Nigerians contribute to the NHF, yet FMBN has historically booked fewer than 500 individual mortgages annually, with many contributors staying away from interest-bearing loans.

“Those Nigerians have contributed and they have aspirations. From today they have a credible pathway,” he said.

The launch marks the first public product under the National Mortgage Industry Policy issued in July 2026. The policy directs FMBN to disburse at least 40 per cent of each year’s NHF collections as mortgages, raise its loan ceiling from N50 million to N85 million, decide applications within 30 working days through an eight-document process, book 2,000 mortgages this year and 5,000 annually by 2028, and publish mortgage data quarterly.

The FMBN Managing Director said the initiative was not designed for one religious community or one part of the country, but offered an additional option compliant with ethical finance principles. He cited global Islamic finance assets of $5.98 trillion in 2024 and Nigeria’s Islamic finance industry, valued at over N4.4 trillion in 2024, up from N2.5 trillion in 2023, as evidence of a substantial opportunity to deepen inclusion in housing finance.

Both leaders said Kano was deliberately chosen as the commercial heart of northern Nigeria, with strong demand for affordable housing and ethical finance, but stressed that it was only the starting point.

The product will be rolled out to Lagos, Port Harcourt, Enugu, Ibadan, Maiduguri, Sokoto, Abuja and other cities. Meanwhile, NHF membership is targeted to grow from six million to 10 million by 2028 through trade unions, cooperatives, employers and a new diaspora window that will accept foreign-currency contributions.

To demonstrate its commitment to delivery, FMBN has designated its housing project in Bichi, Kano State, developed by AYAB Nig. Ltd., for pilot implementation. Keys will be handed over to the first beneficiaries immediately after the launch ceremony in Bichi.

On consumer protection, Darma announced a Mortgage Consumer Charter that will spell out what every customer pays and how ownership is attained, as well as the role of the Office of the Mortgage Industry Regulatory.

He further explained that the government, together with 19 states and eight professional bodies, had validated a national housing deficit of 15 million units. He said a proposal had been submitted to President Bola Ahmed Tinubu to bring all federal housing, mortgage and related institutions under one ministry.

The proposal is intended to ensure that NHF collections, Mortgage Refinance and Investment Fund (MREIF) refinancing, Federal Housing Authority construction and Family Homes Funds investments operate as a coordinated delivery system to finance homes under the Tinubu Mass Social Housing Scheme in every local government area (LGA).