By John M. Agbo

Madariola Adedoyin is one of the beneficiaries of the FMBN estate located at the Olusegun Obasanjo Hilltop, Abeokuta, Ogun State Capital. As a contributor to the National Housing Fund (NHF) Scheme, Adedoyin got the two-bedroom apartment at the estate in 2016 at N6.5 million naira only after paying the equity contribution. “The three necessities of life are food, cloth, and shelter. Once you tackle the housing, you feel relaxed. I prefer the mortgage structure as it relieves the stress and cost of building, and you can enjoy the property while you pay in monthly installments gradually. It is a huge help to people like us,” a happy Adedoyin said.

In Abuja, Nigeria’s capital, Henry Edet Bassey, a senior staff of the Nigerian Nuclear Regulatory Authority (NNRA) and a contributor to the National Housing Fund (NHF) Scheme since 2013 in 2021, received the keys to a three-bedroom flat at the ABSI Estate. It is an FMBN-funded estate located in Kuje, an area council in the Federal Capital Territory, about 40 km southwest of Abuja. Although the property has a market valuation of about N9million, Mr. Bassey, as a contributor to the NHF scheme, did not need to pay any upfront fees, down payment, or mortgage perfection fees to take ownership of the building. He is to pay and own the property in monthly rental payments until he retires from service or hits the 60-year age mark. He also can liquidate the facility anytime he has the financial capacity to do so.

In Kano, Ismail Salisu owns a beautiful three-bedroom semi-detached bungalow under the FMBN Ministerial Pilot Housing Scheme II. He was a contributor to the National Housing Scheme (NHF) but never gave it a thought until 2018, when his wife brought home an FMBN flyer. He followed through the process and now owns the house under the FMBN rent-to-own housing product.

“I was thrilled at the possibility of moving into the house and paying for it in monthly, quarterly, or annual installments without having to pay any upfront equity. I woke up by midnight on my first night in my new home. I was excited at the feeling that I no longer had to pay any rent. What is taken from my salary is so flexible that I don’t get to feel it,” Salisu said.

Access to decent, affordable, quality shelter is a fundamental human right. It is a vital part of the Universal Declaration of Human Rights, which states that everyone has the right to a standard of living adequate for his family’s health and well-being, including food, clothing, housing, medical care, and necessary social services.

The International Covenant on Economic, Social, and Cultural Rights (ICESCR), a multilateral treaty adopted by the United Nations General Assembly with Nigeria as a signatory, also guarantees the right to housing as part of an adequate standard of living. This does not only mean having a roof over one’s head, but it also includes the right to live in safety and dignity in a decent home. It also means affordability, the security of tenure, protection against forced evictions, and availability of services, such as access to drinking water, energy, or transportation.

Furthermore, as a party to the Covenant, Nigeria is expected to ensure that all enjoy all components of the right to adequate housing, including the security of tenure, access to services and infrastructure, affordability, habitability, accessibility, and location in proximity to services.

In section 16 (2) (d), the Constitution of Nigeria provides that the State shall direct its policy towards ensuring suitable and adequate shelter for all citizens.

Despite being a signatory to these noble treaties and constitutional provisions, few people in Nigeria enjoy this right while millions live in substandard housing and informal settlements. The United Nations Special Rapporteur on adequate housing notes that housing conditions remain grossly inadequate for millions of Nigerians living in poverty and excluded from the formal housing sector, leading to informal settlements while luxury developments remain vacant.

At the heart of the problem is the extreme shortage of affordable housing. The cheapest houses built by private developers cost about N15M in Lagos and N7-8M outside Lagos. Most housing developments target the rich instead of the needs of most of the population.

While the debate over the statistical basis for the estimated housing shortfall of over 22million housing units persists, the truth is that the country has a housing crisis that might balloon out of control. Nigeria’s faulty social protection cover, including the lack of decent housing for the majority of its citizens, as evidenced by the increasing insecurity and vulnerability to recruitment by subversive elements, requires fixing a fundamental human right and a political, economic, and social imperative.

FMBN as Catalyst for Mass & Inclusive Housing
Against this background, efforts to turn around the Federal Mortgage Bank of Nigeria (FMBN) are noteworthy. FMBN, the country’s foremost government-owned mortgage institution, has the structural resilience to catalyze affordable housing delivery and drive social inclusion. The Bank prides itself as an institution that believes everyone deserves a home. It subordinates the profit motive to designing and delivering its housing products. It provides the lowest cost construction finance to developers to provide purpose-built homes that fit the incomes of low- and medium-income earners and packages 30-year mortgage loans at single-digit interest rates as low as six percent per annum. Other convenient terms include zero equity contribution for loans of N5million and below, 10% equity for home loans above N5million to N15million and options for rent-to-own for properties that the Bank finances. These unique conditions position FMBN as a leading government driver of inclusive and affordable housing delivery to most Nigerians.

NHF Scheme – Provider of Affordable Housing Finance
Like Madaria Adedoyin, Henry Edet Bassey and Ismail Salisu, an increasing number of Nigerians are leveraging FMBN’s dynamic suite of FMBN affordable housing products. 

At the heart of the FMBN’s affordable housing delivery interventions is the National Housing Fund (NHF) Scheme. The NHF Scheme presents a convenient and cost-effective opportunity for Nigerians, especially those within the low- and medium-income segment, to become homeowners.

The federal Government set up the scheme in 1992, and all Nigerians above eighteen years old and working in the economy’s public, private and informal sectors are eligible to register and participate by contributing 2.5 percent of their monthly incomes. Six months of consecutive contribution to the National Housing Fund Scheme qualifies a subscriber to apply and access a suite of affordable home loans on offer by the Federal Mortgage Bank of Nigeria (FMBN).

This includes the FMBN National Housing Fund Mortgage Loan. The loan provides up to N15million at a six percent interest rate to NHF subscribers to purchase their dream homes. Eligible properties include FMBN-funded properties and homes built by private developers. To ensure the availability of affordable housing stock, FMBN partners with reputable developers to deliver one-, two- and three-bedroom bungalows and apartment buildings at prices ranging from N4M to N15M nationwide. 

Unlike commercial mortgage loans, the FMBN NHF Mortgage loan offers very convenient terms. First, beneficiaries can repay the loans in monthly installments over 30 years. Second, loans of N5million and under attract zero percent equity, and those over N5million to N15million require flat equity of ten percent. 30-year-old Alexander Omoraka is an Assistant lecturer at the Federal University of Technology, Akure, Ondo State. He seized the opportunity to become the owner of a fully detached three-bedroom bungalow at the FMBN FUTA Housing Cooperative estate, Ilara, Ondo State, at 28. Using the FMBN NHF Mortgage loan, Mr. Omoraka secured the house for N7.4million and only paid ten percent of the sum, i.e., N740,000, to take ownership of the property. He conveniently pays the balance over 30 years at an annual interest rate of six percent.

Another FMBN housing product is the individual Home Construction Loan. The loan provides up to N15million to NHF contributors with unencumbered land, legal titles, and approved building plans to undertake self-construction. It is given at a seven percent interest rate to Beneficiaries to pay back over 15 years. 

Contributors to the National Housing Fund Scheme are also eligible to take advantage of the FMBN Rent-To-Own Housing Scheme. The scheme makes it possible for an NHF contributor to move into an FMBN-owned housing property as a tenant and pay towards ownership of the property in monthly or annual installments over 30 years at an interest rate of seven percent! 

Additionally, NHF subscribers can access the FMBN home renovation loan, which provides up to N1million to beneficiaries who already own their homes to carry out improvements. 

To further expand the range of housing product choices available to subscribers to the National Housing Fund Scheme, FMBN recently introduced additional innovative Mortgage products. This includes the Diaspora Mortgage Loan, which would enable Nigerians who live abroad to access up to N50million to own a home in Nigeria. Terms include 30 percent equity payment, a 9 percent interest rate, and a ten-year payback period. 

Next is the Interest-free Rent-to-Own scheme. FMBN developed the product to eliminate the challenges that Nigerians who want to own their homes through the National Housing Fund Scheme face because of the interest-based nature of the Bank’s existing housing products. 

The product uses a rent-to-own model that allows beneficiaries to move into FMBN and non-FMBN-funded homes and pay towards full ownership using monthly/quarterly, or annual rentals.

While it is a fact that owning a home is a capital-intensive venture, registration and contribution to the National Housing Fund Scheme offer Nigerians an affordable path to own their homes. Nigerians should therefore subscribe to the scheme and take advantage of the broad range of affordable FMBN housing products to own their homes. NHF Registration is available at all FMBN Branch offices in state capitals nationwide. 

John Mark Agbo is a housing policy analyst based in Abuja