SEC and FMBN Partnership to Roll Out Non-Interest Mortgage Scheme

On November 14, 2025, the Securities and Exchange Commission (SEC) and the Federal Mortgage Bank of Nigeria (FMBN) joined forces in Abuja to tackle Nigeria’s massive housing gap—28 million units and counting. Their plan? Build a solid Non-Interest Mortgage SCHEME that finally includes the millions of Nigerians who, for religious or ethical reasons, avoid traditional, interest-based loans. They’re rolling out Sharia-compliant financing options, like Sukuk (Islamic bonds) and other non-interest tools, to make affordable housing possible for everyone. This isn’t just about homes; it’s about stability, financial inclusion, and lining up with the Federal Government’s Renewed Hope Agenda. This report breaks down how this partnership came to be, what it involves, why it matters, and where it’s headed—drawing on official updates and industry insights.

Nigeria’s housing crisis is huge. Over 28 million homes are missing, and it’s the working class—especially in big cities like Lagos and Abuja—who feel it most. The National Housing Fund (NHF), which FMBN has managed since 1992, was supposed to help. It offers loans at a subsidized 6% interest rate, which sounds good on paper. But here’s the catch: because the loans are interest-based, more than half of Nigerians—those who follow Islamic law and can’t pay or receive interest—are left out of the system entirely.

Recent reforms, like the Petroleum Industry Act, have opened doors to new ways of financing. Still, the housing sector hasn’t kept pace with non-interest options. That’s where the SEC-FMBN partnership comes in. It’s a direct answer to this gap and builds on FMBN’s earlier promises. Back in August 2025, FMBN’s boss, Shehu Osidi, announced a committee to create Non-Interest Mortgage and Rent Assistance Products. That move set the stage for November’s deal, which now combines SEC’s regulatory know-how with FMBN’s experience delivering mortgages. As Director-General Emomotimi Agama put it, this partnership is key to unlocking long-term funding for housing through well-regulated, non-interest financial products.

This whole initiative taps into the global boom in Islamic finance—now worth over $3 trillion—and echoes local efforts, like the Ministry of Finance Incorporated’s Real Estate Investment Fund (MREIF), which manages a ₦1 trillion pool for single-digit mortgages and is planning non-interest options for the Nigerian diaspora. By breaking down old barriers, this plan sets Nigeria up as a leader in inclusive housing finance across Africa.

Details of the Partnership

At its core, the SEC-FMBN partnership is about building the rules and systems needed to offer NIM products that work for regular people. Here’s how it plays out: the SEC will oversee the launch of Sukuk and other Sharia-compliant, non-interest financial instruments, making sure everything sticks to Islamic principles while protecting investors and keeping the market fair. They’re putting together clear guidelines for risk-sharing setups like Musharakah (where the bank and the homebuyer share ownership and split returns) and Ijarah (basically, a lease-to-own option).

FMBN’s job is to bring these new products into the NHF, so contributors can finally get mortgages without paying interest. To qualify, you need to be an NHF subscriber—meaning you put 2.5% of your monthly income into the fund—but the scheme gives some wiggle room for folks who want to opt in for ethical reasons. The initial rollout targets both formal and informal workers, and they’re planning special loans (up to ₦50 million at good rates) for Nigerians living abroad. Alongside mortgages, there’ll be Rent Assistance Loans to help people transition from renting to owning.

Some big steps are already underway: they’re drafting standard contracts, building digital application platforms, and training Primary Mortgage Banks so they can handle non-interest loans. Funding will come from NHF’s ₦2 trillion in contributions, new Sukuk issues, and partnerships with private investors. FMBN expects to put ₦100 billion into the first round of NIM products in 2026.

How the Non-Interest Mortgage Scheme Works

The Non-Interest Mortgage Scheme, or NIM, takes a different route than traditional mortgages. Instead of piling interest onto your loan, NIM runs on profit-and-loss sharing and uses real assets as its backbone. That way, it lines up with ethical and Sharia principles. If you want in, you start by contributing to the National Housing Fund (NHF) and apply through a certified mortgage bank. They’ll check your credit, but the focus isn’t just your debt-to-income ratio—it’s about steady income and whether the property makes sense.

Here’s how it goes, step by step. First, you register with the NHF and make contributions for at least six months. Next, you send in your application with all the property info and proof it meets ethical standards. If you get the green light, the funding comes from Sukuk-backed sources, and your repayments are set up as profit shares—think an effective rate somewhere between 5% and 7%, stretched out over ten to thirty years. Once you pay everything off, the property’s yours, plain and simple. The property itself serves as collateral the whole time. FMBN takes care of the paperwork and title transfer, while the SEC keeps an eye on things to make sure the system stays on track.

This whole setup isn’t just about following Islamic law—it also keeps risk in check by tying every deal to something real, cutting down on speculation and pushing for genuine, sustainable growth. They’re planning to blend this with FMBN’s Rent-to-Own and Home Renovation Loans, so tenants already in the system can upgrade easily.

Economic and Strategic Implications

The NIM scheme opens a lot of doors. On the economic side, it brings in fresh capital from people who want their investments to match their beliefs. That means more money for housing, and the construction and finance sectors could see over half a million new jobs by 2030. More homes mean a smaller housing gap, a stronger GDP—housing already chips in 5–7% to Nigeria’s economy—and rental prices that don’t drain families dry. That extra breathing room lets people spend or invest in other ways.

Strategically, this partnership pulls more people into the financial system—about 10 to 15 million who were left out before—and pushes Nigeria closer to its goals for sustainable cities. It also boosts Nigeria’s reputation as a hub for Islamic finance, drawing in foreign investors from the Gulf and making it easier for Nigerians abroad to send money home through custom-made products. As Osidi put it, “Homeownership shouldn’t be out of reach just because conventional mortgages don’t fit someone’s beliefs.” The whole point is to make housing more inclusive.

Of course, there are some hurdles. The Sukuk market still deals with liquidity issues, and mortgage banks need to be ready for Sharia audits. There’s also the headache of forex swings, especially when importing building materials. Getting the SEC and Central Bank of Nigeria (CBN) on the same page will matter—a lot—to keep things running smoothly.

Future Outlook

The plan is to roll out the NIM framework in the second quarter of 2026. FMBN wants to hand out ₦500 billion in NIM loans in just three years, teaming up with states to put up more than 50,000 new homes a year under the Renewed Hope Cities program. They’re already thinking about the next steps: green Sukuk for eco-friendly housing, even blockchain for keeping everything transparent. But it all comes down to whether people buy in. Experts are calling for a big push in awareness to get things moving.

FMBN’s not starting from scratch. They’ve already recovered more than ₦22 billion in overdue payments and are looking to raise another ₦500 billion to boost lending. Digital dashboards from the SEC will help keep tabs on everything, and if the NIM works as planned, it could be a blueprint for other sectors—think agriculture.

The SEC-FMBN partnership on the Non-Interest Mortgage Scheme is a big step forward for fair and accessible homeownership in Nigeria. By putting ethical finance and real housing needs together, it goes after the 28 million-unit housing deficit and lays the groundwork for a stronger, more inclusive economy. As Agama said, this alliance “strengthens market integrity while widening access.” If everyone follows through, the scheme could turn homeownership into a right, not a privilege, no matter your faith. Now it’s up to the key players to deliver and make good on the promise—dignity and a decent roof over every head. Report compiled November 17, 2025, based on official SEC and FMBN releases and industry analysis.