Rent-to-Own Housing Schemes in Nigeria: Are They Worth It?

By Favorite Grace On Jul 5, 2025

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A detailed guide on Rent-to-Own Housing Schemes in Nigeria can be found here on TJ News Nigeria.

For many Nigerians, buying a home outright is financially out of reach. As inflation erodes purchasing power and property prices soar, a growing number of prospective homeowners are exploring rent-to-own housing schemes as a more flexible path to ownership.

TJ News Nigeria reports that public and private developers have launched various rent-to-own programs across Nigeria, often targeting civil servants, young professionals, and low-to-middle-income earners. But how do these schemes work—and are they really worth it?

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What Is a Rent-to-Own Housing Scheme?

A rent-to-own scheme allows a tenant to rent a property with the option—and often the obligation—to buy it after a period of time. Part of the monthly rent goes toward eventual ownership, making it a hybrid between renting and financing a mortgage.

Key Characteristics:

You live in the house while paying monthly rent
A portion of the rent is credited toward homeownership
Full ownership is transferred after a set term (usually 10–30 years)

Types of Rent-to-Own Schemes in Nigeria

1. Federal Mortgage Bank of Nigeria (FMBN) Rent-to-Own Scheme

Targets NHF contributors
Provides fully-built homes in FMBN estates
6% interest rate
Tenure: Up to 30 years
No equity contribution required

TJ News Nigeria learnt that FMBN’s scheme is one of the most affordable in the country, especially for civil servants and formal sector workers.

2. State Government Schemes

Examples:

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Lagos State Rent-to-Own Scheme (LagosHOMS)
Abuja Housing Scheme for Federal Workers
Kano and Ogun State Urban Housing Projects

Features:

5–10% initial down payment
Monthly rent over 10–20 years
May include maintenance obligations

3. Private Developer Rent-to-Own

Some developers now offer flexible rent-to-own options in estates such as:

Mixta Africa
RevolutionPlus
Landwey
Adron Homes

Terms vary but typically include:

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Initial deposit (₦500,000 – ₦5 million)
Monthly or quarterly payments
Full ownership after 3–15 years

Eligibility and Application Process

While terms vary by provider, applicants generally need:

Requirements:

Valid means of ID (NIN, voter’s card, or international passport)
Proof of income (payslips, business registration for self-employed)
NHF registration (for FMBN schemes)
Employment letter or confirmation of steady income

Steps to Apply:

Identify a verified rent-to-own provider or estate
Submit application and income documentation
Make the required deposit or first rent payment
Move in and start paying toward ownership

Some schemes may require legal agreements and proof of NHF contributions.

Cost Comparison: Rent-to-Own vs Traditional Mortgage

Factor	Rent-to-Own	Traditional Mortgage
Down payment	Low (₦0 – ₦5 million)	10%–30% of property value
Interest rate	Often lower (6% FMBN, or 0% developer promos)	9%–22% depending on lender
Monthly payment	Rent + ownership credit	Mortgage principal + interest
Tenure	10–30 years	5–30 years
Title transfer	At end of payment term	At start (bank holds title)

Pros and Cons of Rent-to-Own in Nigeria

Advantages

No large upfront payment like traditional mortgage
Live in the property while paying gradually
Flexible repayment for those without mortgage eligibility
Ideal for self-employed Nigerians or informal sector workers
Some schemes have 0% interest

Disadvantages

Not all payments may count toward ownership
Risk of eviction or contract cancellation for missed payments
May cost more long-term than buying outright
Some schemes lack clear title or government backing
Developers may delay final ownership transfer

Real-World Examples (2024–2025)

FMBN Rent-to-Own Homes in Gwagwalada (Abuja)

₦3 million 1-bedroom apartments
₦6 million for 2-bedrooms
Monthly payment: From ₦22,000
Owned in 15–30 years

LagosHOMS Scheme (Lagos State)

Initial deposit: 5% of home value
Repayment: Over 10 years
Monthly rent: From ₦40,000
Estates in Igbogbo, Ikorodu, and Surulere

Expert Tips Before Signing a Rent-to-Own Agreement

Check property documents: Ensure C of O or R of O exists
Verify developer’s track record
Insist on a written agreement: Must include ownership timeline, penalties, refund terms
Avoid verbal promises: Everything should be documented and signed
Involve a lawyer: Especially for long-term private developer contracts
Confirm ownership transfer process: Ask who holds the title and when it changes hands

So, Are Rent-to-Own Schemes in Nigeria Worth It?

TJ News Nigeria reports that for Nigerians unable to afford hefty down payments or qualify for commercial mortgages, rent-to-own options are a realistic and low-barrier path to homeownership.

However, not all schemes are equal. Government-backed options like FMBN and state housing boards offer more transparency and affordability, while some private developer schemes may carry higher risk and costs.

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They are worth it — if the scheme is transparent, the property has a valid title, and your payments are properly documented.

Final Word

As Nigeria’s housing deficit remains above 17 million units, rent-to-own is becoming a lifeline for many households. While not perfect, these schemes provide flexibility for workers and entrepreneurs who lack access to traditional loans.

TJ News Nigeria gathered that more states and developers are embracing the model, especially with support from the Federal Mortgage Bank of Nigeria and NHF contributors.

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