Nigeria faces a housing deficit estimated at 20 to 28 million units, a challenge that has persisted across successive governments. Federal Mortgage Bank of Nigeria (FMBN) Managing Director Shehu Usman Osidi stated, "We have houses we do not need and we need houses we do not have," highlighting the mismatch between supply and affordability. Despite available housing stock, high costs prevent access for millions of Nigerians. Inflation remains a critical barrier, with the February 2026 Consumer Price Index report showing inflation still above 15 per cent, driving up construction material prices. A 50kg bag of cement rose from around N3,000 in 2023 to between N10,000 and N11,000 in 2026. The naira's depreciation and global commodity shocks have worsened the situation.
Structural issues include lack of reliable housing data and over-reliance on imported materials due to insufficient local manufacturing. The Central Bank of Nigeria's benchmark interest rate stands at 26.5 per cent, making mortgage loans unaffordable for most. However, FMBN offers mortgage products at single-digit interest rates as low as 6 or 7 per cent. These include Rent-to-Own, Home Renovation Loans, Non-Interest Mortgage, and the Diaspora Mortgage Product. Over 24,000 Nigerians accessed Home Renovation Loans of up to N1 million each, totalling N21.2 billion in two years. The Micro Home Improvement Loan was introduced to serve informal sector workers, who make up about 80 per cent of Nigeria's workforce.
Shehu Usman Osidi's leadership at the Federal Mortgage Bank of Nigeria stands out not for solving the housing crisis, but for exposing how deeply affordability—not just supply—defines it. His admission that "we have houses we do not need and we need houses we do not have" cuts to the core of a system where housing finance is structurally disconnected from the realities of most Nigerians. The FMBN's shift to single-digit interest loans, including products like the Micro Home Improvement Loan, signals a rare institutional attempt to align policy with the informal economy's dominance.
Yet the context remains harsh. With inflation above 15 per cent and cement prices tripling in three years, even low-interest loans struggle to offset the real cost of construction. The absence of comprehensive housing data and local manufacturing means the FMBN operates in a vacuum, forced to innovate within a broken ecosystem. While 24,000 renovation loans disbursed over two years reflect progress, they are a fraction of what is needed in a country where 80 per cent of workers earn irregular incomes and lack formal credit histories.
For ordinary Nigerians, especially those in the informal sector, the FMBN's new products offer a sliver of hope—but only if access barriers like documentation, land tenure, and financial literacy are addressed. A 6 per cent mortgage means little if applicants cannot prove income or secure collateral. The real impact lies in whether these products can scale beyond urban centres and reach low-income families in secondary cities and rural areas.
This effort fits a broader pattern: Nigerian institutions forced to retrofit colonial-era frameworks to serve a population they were never designed for. The mortgage system is no longer just about lending—it's about reengineering access in a country where formal structures exclude the majority.
