EXPLAINER: What you should know about FG’s housing schemes
Nigeria has long grappled with a persistent and widening housing deficit estimated at 20-28 million units. This perennial shortage has for decades remained a damning national challenge, defying the efforts of successive administrations. With a current population of approximately 223 million and projections by the World Bank estimating a rise to nearly 263 million by […]
Nigeria has long grappled with a persistent and widening housing deficit estimated at 20-28 million units.
This perennial shortage has for decades remained a damning national challenge, defying the efforts of successive administrations.
With a current population of approximately 223 million and projections by the World Bank estimating a rise to nearly 263 million by 2030 and over 400 million by mid-century, Nigeria is on a trajectory to become the third most populous nation globally.
Although the federal government through the Federal Mortgage Bank and recently Federal Ministry of Finance has rolled out some affordable housing plans for citizens, many Nigerians are unaware of these schemes ranging from mortgage plans to affordable housing schemes.
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Mortgage loans for low, middle-income earners
The Federal Mortgage Bank of Nigeria has introduced different mortgage plans for Nigerians desiring to own homes.
Daily Trust findings also show that the FMBN introduced the Non-Interest Loan, specifically designed for Nigerians who are averse to interest payment, particularly Nigerians of low and middle-income status.
The bank said its new product would eliminate the challenges that eligible Nigerians who want to own homes through the National Housing Fund Scheme face because of the interest-based nature of the bank’s existing housing products.
Another mortgage initiative is the Diaspora Mortgage Loan which is a strategic collaborative initiative between FMBN and the Nigerians in Diaspora Commission (NiDCOM). This initiative is expected to open up opportunities for Nigerians living abroad to invest in real estate back home in Nigeria.
The loan will be processed for interested Nigerians through International Money Transfer Operators (IMTOs). The IMTOs are being engaged to facilitate smooth transactions, with plans for a full rollout of the product expected in Q1 2025.
Daily Trust understands that the product is designed to provide Nigerians living abroad with a structured, and affordable pathway to own homes in Nigeria.
The full rollout will allow more diaspora Nigerians to access mortgage financing tailored to their unique income streams and repayment capabilities and is expected to kickstart before the end of the year.
Another mortgage product recently introduced by the FMBN is the Rent Assistance Loan. The loan is a micro-housing loan product meticulously designed to alleviate the financial burden of rental payments for eligible Nigerians. This product is 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. These loans are available for Nigerians to obtain through the FMBN.
Another affordable mortgage loan for Nigerians is the Ministry of Finance Incorporated (MOFI) Real Estate Fund (MREIF). The initiative with public purpose but private sector-led, MREIF is designed to address the nation’s housing deficit and stimulate economic activity in the real estate and construction sectors. MREIF is a N1-trillion initiative which provides low-interest, long-term mortgages, up to 20 years.
The MOFI has now opened a portal for Nigerians to apply for the real estate loan at a single digit rate.
Housing schemes
Daily Trust reports that under the Renewed Hope Housing Initiatives, the federal government has segmented it into three components.
The first component is the Renewed Hope Cities, which involves the construction of large-scale, integrated housing developments with a minimum of 1,000 units each.
These cities are to be developed in each of the six geopolitical zones and the Federal Capital Territory (FCT), with designs that promote holistic living for access by Nigerians through the renewed hope housing websites.
The second is the Renewed Hope Estates initiative, which focuses on mid-scale housing projects comprising 250 housing units per site.
These estates are currently ongoing in 13 states (Osun, Oyo, Delta, Akwa Ibom, Abia, Ebonyi, Benue, Nasarawa, Katsina, Sokoto, Gombe, Kano and Yobe) and primarily cater to low- and middle-income earners. They are especially targeted at civil servants, and workers in the informal economy, thus broadening access to affordable homeownership for traditionally underserved demographics.
With the pilot phases which include the Ibeju-Lekki Renewed Hope City Project, the FMBN is directly funding a significant part of it to the tune of N27 billion.
Similarly, the FMBN is financing the Renewed Hope City Karsana to the tune of N19.9 billion which if completed, can be accessed by Nigerians at a single digit rate.
The bank, through its Managing Director, Shehu Usman Osidi, had stated that it recognised the urgency of addressing Nigeria’s housing deficit, adding that FMBN is ramping up its partnerships with credible developers to finance more affordable housing estates across the country.
It added that particular emphasis is being placed on cooperative-driven housing projects, which have proven effective in delivering homes that match the income levels of workers.
The bank added that it is also targeting special housing schemes for public servants, teachers and members of the armed forces to further expand access to homeownership.
Daily Trust gathered that the FMBN is currently pushing for the long-awaited review of the National Housing Fund (NHF) and the FMBN Acts.
Experts had noted that modernising these legislations is crucial for unlocking new funding channels, improving loan terms for contributors and enhancing the bank’s capacity to meet the growing demand for affordable housing finance.
The bank had also stated that it is actively engaging with policymakers, lawmakers and key stakeholders to push for reforms that will make housing finance more sustainable and accessible to Nigerians.
The third component of the initiative is the Renewed Hope Social Housing Programme. The scheme plans the construction of 100 housing units in each of Nigeria’s 774 local government areas, amounting to a nationwide target of 77,400 homes.
Sensitisation, recapitalisation of FMBN critical to achieving housing initiatives – Experts
In a chat with Daily Trust, a real estate expert, Ahmad Ibrahim, said that though the mortgage plans and housing initiatives by the federal government through the FMBN are laudable, there is need to recapitalise the bank for optimal performance and housing initiatives for low and middle income Nigerians.
“The housing schemes are good but with FMBN capitalisation at N2.5bn, the bank can’t do more to finance affordable housing. From NHF loans to different housing loans, the bank’s capitalisation quest of N500 billion should be considered to advance the affordable housing course.
“Already, a new board of the bank has been inaugurated to boost capacity but there is a critical need to ensure the bank provides enough liquidity for the Housing initiatives,” he said.
However, stakeholders in the housing sector who spoke to Daily Trust noted that despite the nation’s immense potential, progress in providing affordable housing for citizens has been slow, hindered by legislative hurdles, economic constraints, and the possibilities of Nigerians not being aware of these initiatives.
A past president of the Nigerian Institute of Town Planners, TPL Steve Onu, said the planned 100 social housing units in each local government, requires adequate sensitisation.
Onu told Daily Trust: “Federal government should ensure that for each policy, there is adequate sensitisation for the target audience to even key in because there are different housing initiatives that even the target audience are not aware of.