Dissecting FG’s mortgage plans for low, middle-income earners

178,619 employees enrolled in NHF in 2024 — FMBN One of the major challenges facing Nigeria is inadequate housing for low- and middle-income citizens to have a decent and comfortable shelter. This is further compounded by the current inflationary trends affecting virtually all sectors of the economy, including the real estate sector. The current situation […]

• 178,619 employees enrolled in NHF in 2024 — FMBN

One of the major challenges facing Nigeria is inadequate housing for low- and middle-income citizens to have a decent and comfortable shelter.

This is further compounded by the current inflationary trends affecting virtually all sectors of the economy, including the real estate sector.

The current situation has seen prices of house rents and property skyrocket to an all-time high due to the high cost of building materials and exchange rates.

Nigeria’s headline inflation has dropped to 24.48% year on year in January 2025, which is a sharp decline from the 34.80% headline inflation recorded in December 2024, according to the National Bureau of Statistics (NBS). Home Loans.

However, the prices of goods and services, including manufacturing and building materials, remain high.

This report re-echoes the need for a conducive business environment, especially in the real estate sector.

Although the National Housing Fund was introduced by the federal government for both public and private sector employees, enrolment still remains low, hence the need for the Federal Mortgage Bank of Nigeria to provide affordable mortgage financing for low and middle-income earners across the country.

The National Housing Fund (NHF) scheme was set up to address the nation’s housing deficit and promote affordable housing. It was founded by the National Housing Authority and is managed by the Federal Mortgage Bank of Nigeria (FMBN). The 1992 Fund Act and the main objective of the NHF Scheme are to give Nigerians access to affordable housing options.

Recently, the Federal Mortgage Bank of Nigeria stated that under the National Housing Fund (NHF)’s operations, collections grew by N3 billion in 2024 resulting in a total collection of N103 billion compared to the N100 billion it recorded in 2023. This increase in NHF contributions demonstrates renewed trust and participation in the NHF scheme by Nigerian workers.

The bank further disclosed that  a total of 658 employer organisations and 178,619 employees were registered in 2024 compared to 556 and 113,577 respectively, in 2023.

FMBN has made significant progress in delivering affordable housing to Nigerians. Over the past year, the bank financed the construction, up to completion level, of over 1,044 housing units across the country, with a total of 6,853 ongoing projects in 106 locations across the country.

These units are located in both urban and rural areas, ensuring that Nigerians of low and middle-income status have access to decent and affordable housing.

On the Renewed Hope Agenda for housing, the Bank said it has provided N100 billion as off-taker guarantee for the Renewed Hope Cities and Estates Programmes, starting with the 3,112 housing units in Karsana, FCT. The programme is being championed by the Federal Ministry of Housing and Urban Development under the leadership of Arc. Ahmed Musa Dangiwa.

In addition, the bank provides loans through its various loan windows to contributors to the NHF scheme nationwide, to off-take houses provided through the programme or to members of beneficiary co-operative societies.

This has contributed to national productivity and economic growth, with the provision of about 171,325 jobs across Nigeria with engineers, architects, surveyors, and even artisans across the value chains in the housing and real estate sector are able to access gainful employment which in turn has ripple effect on the standard of living and economic growth.

New mortgage products for Nigerians

Daily Trust found that FMBN is pursuing the introduction of some new products for middle and low income earning Nigerians and diasporans.

These initiatives are designed to cater to the diverse needs of Nigerians and expand access to affordable housing.

The newly introduced products include the Diaspora Mortgage Loan, Rent Assistance Loan and the non-interest loan.

Diaspora mortgage loan

The Diaspora Mortgage Loan is a strategic collaborative initiative between FMBN and the Nigerians in Diaspora Commission (NiDCOM). The initiative is expected to open up opportunities for Nigerians living abroad to invest in real estate back home.

Additionally, there are ongoing engagements between the Bank, NiDCOM and the Central Bank of Nigeria (CBN) aimed at ensuring seamless transaction processes.

International Money Transfer Operators (IMTOs) are also being engaged to facilitate smooth transactions, with plans for a full rollout of the product expected in Q1 2025.

“The NHF Diaspora Mortgage Loan Scheme is expected to further expand the scope of mortgage accessibility, driving down the housing deficit facing the county,” the bank stated.

Rent assistance loan

Another product recently introduced by the FMBN is the Rent Assistance Loan, which is a micro-housing loan product meticulously designed to alleviate the financial burden of rental payments for eligible Nigerians.

This product has been thoughtfully crafted to ensure accessibility, affordability and flexibility, making it a viable solution for many who have found it challenging to secure housing finance through other traditional financial arrangements. It is also expected to be launched within the first quarter of 2025.

Non-interest loan

Daily Trust findings also show that the FMBN has introduced the Non-Interest Loan, also at the verge of being launched at the end of the first quarter of 2025. This product is specifically designed for Nigerians who are averse to interest payment, particularly Nigerians of low and middle-income status.

What FMBN is saying

The FMBN has stated that over the years, it has struggled to catch up with the huge housing demand in the country, with many applicants waiting for several months before their mortgages are disbursed.

One of the most notable achievements has been the reduction in turnaround time for loan approvals and disbursements.

Speaking recently at a press conference to mark his one year in office, the Managing Director of the bank, Shehu Usman Osidi, stated that “Previously, beneficiaries often faced delays of several months, but the bank has streamlined its processes, cutting the processing time to an average of 30 days, as long as the applicant has properly submitted all required documents and the board has met within the period to initiate approvals.”

He said, “An important driver of this improvement has been the digitization of processes; a key component of the 7-point agenda of the bank’s current executive management. The deployment of digital platforms like the core banking application has significantly reduced bureaucratic bottlenecks.

“Loan applications are now processed online, ensuring faster and more transparent service delivery. This shift to digital platforms has also enhanced the bank’s ability to monitor and evaluate its operations, leading to better decision-making and resource allocation.

“In addition to digitization, the bank has introduced mystery shopping as a strategic tool to improve customer service delivery and enhance customer experience and satisfaction. This has brought about more effective and efficient responsiveness to inquiries and complaints and has been instrumental in addressing the concerns of beneficiaries, ensuring that their needs are met promptly.

As a result, customer satisfaction ratings have improved over the past year, reflecting the bank’s commitment to putting its customers first.”

He added that the bank is further exploring partnership opportunities with the International Union of Housing Finance, Association of African Development Finance Institutions, African Alliance for Youth Empowerment and a host of other like-minded organisations. The FMBN’s engagement with international development agencies and financial institutions is aimed at exploring innovative financing models for affordable housing.

“In line with these partnership initiatives, only recently, the bank signed a Memorandum of Agreement (MoA) with the Kano State Government, formalising the re-integration of Kano State civil servants into the NHF Scheme.

“With Kano State on board the NHF ship, only Oyo State is yet to return to the scheme. By implication, FMBN’s National Housing Fund (NHF) scheme is seeing remarkable growth with a total of 35 states now on board the NHF scheme,” the MD further revealed

On the target for 2025, Osidi stated that NHF collections are targeted to increase to N211.33 billion, leveraging contributions from the informal sector and the diaspora community.

Also, the MD of the bank noted that “Mortgage loan offerings will expand, with new products targeting a total of 4,200 homeownership loans, with 2,500 dedicated to non-interest Rent-to-Own facilities, 1,100 for Mortgage Loan Origination, 400 as Rent-to-Own Facilities and 200 Diaspora Mortgage Loans.

The bank also targets a total of 15,122 home construction loans, focusing on mega and mini city projects, as well as provision of 43,000 housing micro-soft loans in Home Renovation, Rent Assistance and micro home improvement loans.

“In 2025, the bank also aims for an aggressive loan recovery drive, targeting N93.7 billion in recoveries, and will finalise the National Mortgage Registry establishment to improve mortgage processing efficiency,” he explained.