Nigeria's housing deficit stands between 17 and 20 million housing units. Last year, the speaker of the House of Representatives, Femi Gbajabiamila, said the country requires N6 trillion to address the huge deficit.
As part of efforts to address the problem, the Federal Mortgage Bank of Nigeria or FMBN has unveiled a rent-to-own non-interest loan model to boost housing and financial inclusion for Nigerians.
The new scheme would allow beneficiaries to move into FMBN and non-FMBN funded homes, paying monthly, quarterly, or yearly instalments to eventually take ownership of the homes upon completion of the payment.
This scheme was approved recently by the bank's board of directors as a continuous response to the nation's huge housing deficit and to address the challenges associated with the interest-based product of the National Housing Fund scheme.
"The product uses a rent-to-own model that allows beneficiaries to move into FMBN and non-FMBN funded homes and conveniently pay towards full ownership using monthly/quarterly or annual rentals," said Lawal Isa, the bank's group head of Corporate Communications.
According to Isa, the FMBN retains ownership of the property until the financing term ends or if, during the lease period, the beneficiary purchases the property. He added that the financing structure is based on the non-interest financing contract of ‘Ijarah Muntahia Bitamleek (lease to own)’.
Depending on the beneficiary's age and years in public service, the package can be paid for in 30 years based on a specified payment plan. It is available to Nigerians who contribute to the National Housing Fund (NHF) Scheme.
The plan covers both FMBN and non-FMBN funded properties with a maximum price of N15million.