in Fadare, S.O. and D.A. Adesanya (Eds), Sustainable Environment, Faculty of Environmental Design and Management, Obafemi Awolowo University, Ile Ife, Nigeria, pp 223-232 2010 FINANCING HOUSING FOR SUSTAINABILITY IN NIGERIA: OPTIONS AND CHALLENGES. Oyewole, M.O and Oladokkun T.T Department of Estate Management, Obafemi Awolowo University, Ile Ife, Osun State Contact E Mail: wolesike@yahoo.com Tel: 08033846037 Abstract Housing is second most essential of life to food. Despite this, its financing has been problematic. This paper therefore reviewed financing options for housing development which include sourcing from private and public sectors, institutional lenders and capital market. The paper observes that each option presents different challenges of application in the context of social, economic and political environments in Nigeria. The paper concludes that the government must create an enabling environment for successful application of these options. Keywords: sustainable housing development, affordable housing, finance options, challenges Introduction Rapid urbanization due to continuing rural-urban migration, high population growth and a relatively inelastic housing supply have contributed to the worsening housing situation in Nigeria. The democratization of the nation’s policy and recent economic growth has failed to create enough jobs for a rapidly expanding labour force. The growth in joblessness has compounded the already precarious situation of low-income households driving them to join the swelling ranks of slum dwellers. The grim situation with regard to housing is further manifested in overcrowding and squatter settlements. Many urban families especially in large metropolis like Lagos, Abuja and Port Harcourt live in makeshift dwellings, most in slum areas and informal settlements with no security of tenure, facing daily risks from hazardous conditions. In essence, housing is simply not affordable for the teeming urban poor. They lack access not only to appropriate housing but also to affordable shelter financing and sustainable subsidies and the means to provide their own house [Falegan, 1985]. Most of the issues on the housing sector in developing countries usually centre on affordability and the problems that households face to achieve home ownership (Olufemi, 1993).