Federal Mortgage Bank of Nigeria launches non-interest mortgage product

The Federal Mortgage Bank of Nigeria (FMBN) has introduced a non-interest mortgage product titled ‘Ijarah Muntahia Bittamleek’, also known as ‘Lease-to-Own’. Launched in Kano, the initiative aims to expand homeownership access for National Housing Fund (NHF) contributors whose financial or ethical convictions prevent them from using conventional interest-based mortgages.

Under this Islamic finance structure, beneficiaries occupy a property through a rental arrangement and acquire full ownership upon the fulfillment of agreed contractual terms at the end of the period. The FMBN has designated a housing project in Bichi as the pilot implementation for this product.

The launch aligns with the National Mortgage Industry Policy issued in July, which directs the FMBN to disburse at least 40 per cent of annual NHF collections as mortgages. The policy also seeks to increase the maximum loan limit from N50 million to N85 million and aims to expand NHF membership from six million to 10 million by 2028. Additionally, the ministry targets increasing mortgage bookings for informal-sector workers, such as artisans and traders, to between 30 and 40 per cent.