Nigeria is confronted with a persistent and escalating housing deficit, with estimates ranging from 20 to 28 million units. This long-standing deficiency has been a major national challenge, largely unaffected by the initiatives of various governments.
Millions of Nigerians reside in homes that are inadequate, overcrowded, and insecure, lacking access to decent and affordable housing.
Industry experts identify several contributing factors to this situation, including a weak mortgage system, restricted access to credit, ineffective housing policies, and an urbanisation rate that continues to exceed housing supply.
Subsequently, the Managing Director of the Federal Mortgage Bank of Nigeria (FMBN), Shehu Usman Osidi, has stated that in Nigeria, "We have houses we do not need and we need houses we do not have. It is true that Nigeria has a staggering housing deficit, but it is also true that there are many available houses that people cannot afford."
This statement highlights the necessity for a robust and accessible mortgage system that can ensure affordability.
Challenges within the Mortgage Sector
Inflation continues to be the most significant hurdle for the sector. The National Bureau of Statistics' Consumer Price Index report for February 2026 indicated a slight moderation in Nigeria's inflation rate compared to preceding months and the same period last year. However, analysts note that an inflation rate exceeding 15% still hinders substantial progress in Nigeria's property market.
A primary driver of this inflation is the depreciation of the naira, combined with global commodity price volatility, both of which have dramatically increased the cost of construction materials. For instance, the price of a 50kg bag of cement escalated from approximately N3,000 in 2023 to between N10,000 and N11,000 by 2026.
Another structural issue is the lack of reliable housing data. The government has not conducted a comprehensive audit of existing, abandoned, or informal housing stock, which complicates the development of effective policies and the allocation of resources.
Furthermore, Nigeria's inability to establish manufacturing hubs that would reduce import costs and boost local production has been a major challenge for the mortgage sector. This is because developers incur high costs when importing materials, which consequently impacts the affordability of housing financed through mortgages.
Similarly, the prevalent double-digit lending rates have discouraged many Nigerians from seeking mortgage loans.
The current interest rate set by the Central Bank of Nigeria (CBN) stands at 26.5%. Experts suggest that primary mortgage banks lending at such rates might undermine government efforts to promote affordable mortgages.
Stakeholders in various forums have advocated for a more comprehensive strategy from the Federal Mortgage Bank of Nigeria, under the leadership of Shehu Usman Osidi, to address these issues.
Daily Trust's investigations reveal that the FMBN has introduced several initiatives, including expanded mortgage accessibility, digital banking services, rent assistance loans, and non-interest mortgage loans, among others.
FMBN's Initiatives
An examination by Daily Trust shows that the Federal Mortgage Bank has broadened its product portfolio to include offerings such as Rent-to-Own, Home Renovation Loans, Rent Assistance, Non-Interest Mortgage, and the Diaspora Mortgage Product.
Data from the FMBN indicate that through the Home Renovation Loan scheme, over 24,000 Nigerians have received up to N1 million each, totalling N21.2 billion over the past two years, to enhance their homes without the rigorous requirements typically associated with mortgages.
The MD of FMBN, Shehu Usman Osidi, stated that "FMBN loans are structured to remain accessible, given at single-digit interest rates of 6 or 7 percent. Our pricing structure is also anchored on affordability."
"We have also introduced non-interest mortgage products to cater to Nigerians who prefer ethical financing models, ensuring inclusivity across different income and belief systems."
"Our products are specifically designed to cushion low-income earners from prevailing market conditions, and our financing model is robust and inclusive. So, while inflation and interest rates are realities in the broader economy, our interventions are designed to mitigate their impact on low-income earning Nigerians," he stated.
The FMBN MD also noted that "The core banking application has digitized access to affordable homeownership for more Nigerians, and today, a contributor can register, monitor contributions, and initiate transactions through our online platforms and USSD code (*219#)."
"In 2024, the Bank financed approximately 2,165 housing units. By 2025, that number increased significantly to 6,911 units, a rise of over 300%.
Beyond these figures, we are supporting large-scale developments under the Renewed Hope Housing Programme. For instance, in Karsana, Abuja, we have funded 864 housing units at advanced stages of completion with an approved N19.9 billion in direct funding, out of which N14.3 billion has been disbursed. This is in addition to the N100 billion approved as an off-taker guarantee for the project.
"In Ibeju-Lekki, Lagos, 258 housing units have already been completed and are ready for commissioning, out of a total of 1,500 units planned in phases. Over N8 billion has already been disbursed. Additionally, we have approved N7.8 billion for the Renewed Hope project in Enugu, further contributing to making homes available for Nigerians."
Regarding the impact, he highlighted that "In 2025 alone, over 15,000 Nigerians accessed Home Renovation Loans, while hundreds benefited from Rent- to-Own. These beneficiaries are not from the elite class; they include teachers, civil servants, traders, and small business owners."
"Our collaboration with labour unions such as the NLC and TUC ensures that organised workers, representing the middle and lower-income segments, are direct beneficiaries of our housing programmes."
"With our newly introduced Non-Interest, Rent Assistance, and Micro Home Improvement Loan, which targets the informal sector, FMBN is fostering an era of unprecedented financial inclusion for previously underserved populations.
These products are designed to ensure that every segment of Nigerian society, including the grassroots, can access affordable housing finance," he added.
Loans for Nigerians in the Informal Sector
Nigeria's informal sector constitutes the majority of the workforce, estimated at about 80%.
In recent years, there have been increasing calls for integrating this sector into the mortgage system to enable them to afford decent homes.
Further checks reveal that the federal government, through the FMBN, has launched the Micro Home Improvement Loan, specifically designed for individuals with smaller, irregular incomes.
"We are also utilizing cooperatives and associations as entry points, allowing groups of informal workers to participate collectively in the NHF Scheme. This approach reduces risk and enhances accessibility.
Essentially, we are no longer expecting the informal sector to conform to our existing system; rather, we are adapting our system to suit them. We are meeting Nigerians where they are," stated FMBN through its MD, Shehu Usman Osidi.
The Bank also reported that the deployment of the Core Banking Application has revolutionized transaction processing, significantly accelerating tasks that previously took weeks.
"In the past, FMBN's operations were largely manual; loan processing was paper-based, approvals were slow, and contributors had limited access to their records. This resulted in bottlenecks, delays, and considerable customer frustration. However, the implementation of a core banking application has fundamentally altered that scenario.
"Processing timelines have improved substantially, particularly for NHF refunds, alongside the introduction of digital channels to enhance customer engagement. For example, NHF refund processing has shown significant gains in both speed and volume, with over N15.6 billion disbursed to more than 55,000 beneficiaries in 2025 alone."
Affordable Loans Remain Realistic with Policy Support – Expert
A housing expert, Musa Inuwa, acknowledged that Nigeria's primary housing finance institution, FMBN, continues to offer mortgages at single-digit interest rates as low as 6%, with repayment periods extending up to 30 years, rates far below those offered by any commercial bank.
However, he suggested that through bulk financing, off-taker guarantees, and strategic partnerships, cost pressures could be further mitigated, ensuring affordability is maintained as much as possible.
Regarding areas for improvement, he proposed that recapitalizing the bank to N750 billion would significantly enhance its capacity to provide long-term mortgage financing on a large scale.
Additionally, the expert noted that while the deployment of the Core Banking Application has improved efficiency, transparency, and turnaround times, making mortgage processing faster and more reliable, there needs to be an expansion of the NHF base.
"With over 300,000 new contributors added in two years and higher record collections, more Nigerians should be brought into the scheme to boost mortgage lending."
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