The Federal Mortgage Bank of Nigeria (FMBN) has disclosed plans to introduce a non-interest rent-to-own loan product to boost financial inclusion in home ownership.
In a statement yesterday, the group head, corporate communications of FMBN, Lawal Isa Sauri, stated that the product was approved by its board of directors to enable Nigerians own their homes using a mortgage plan without an interest-bearing transaction.
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The statement reads in part: “The product’s financing structure is based on the non-interest financing contract of Ijarah Muntahia Bitamleek (lease-to-own). Under this arrangement, FMBN retains ownership of the property until the financing term ends or at any time during the lease period that the beneficiary wishes to purchase the property.
“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.”
It added that the product was to eliminate the challenges that eligible Nigerians who wanted to own their homes through the National Housing Fund (NHF) faced because of the interest-based nature of the bank’s existing housing products.
It, however, noted that the product would only be available to Nigerians who were contributors to NHF, stressing that it covered both FMBN and non-FMBN funded properties with a maximum price of N15m.
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