FACTS ABOUT NATIONAL HOUSING FUND

 

This Publication is to inform you about the National Housing Fund, its operations, what is expected of you and what to expect of  the fund.

 

The Fund’s Mission

The National Housing Fund was established by Decree No. 3 of 1992 to facilitate the continuous flow of low-cost funds for long term investment in housing for the benefit of all Nigerians.

 

Management of the Fund

The Fund is to be managed and administered by Federal Mortgage Bank of Nigeria essentially to provide long-term housing loans to individuals through wholesale lending to primary mortgage institutions.

 

Who is to contribute?

 

The Fund is to be subscribed by mandatory contributions as prescribed in the Decree:

 

Any Nigerian earning an income of N3,000.00 and above per annum should contribute 2’5 per cent of his her basic monthly salary or income to the Fund.

 

K you are self-employed or you own your own business, whether as a trader, artisan professional, or business person, etc., you are expected to contribute to the Fund. In addition, commercial and merchant banks, insurance companies and the Federal Government will also contribute to the Fund.

 

How to Contribute

 

 (i)                  Registration:

All potential contributors to the Fund are to be registered by FMBN. A Registration Form will be issued by FMBN to an employee through his/her employer. This should be completed and returned as indicated on the Form. Each Employer is to be similarly registered to facilitate the deduction and remittance of contributions.

 A participation Number will be allocated to you and would remain the same, even when you change your place of employment.

 if you are self-employed you are also expected to register. You are to collect a form from any Branch of FMBN. Your employees (any) should be equally registered. 

 

(ii)                Payment of Contribution:

Following your registration with the Fund, your employer is expected to deduct 2’5 per cent from your salary monthly and remit to FMBN. K you are self-employed you may pay directly to any office of FMBN. A passbook shall be issued to you to record your monthly contributions. This passbook must be securely kept, as it will be required for every transaction.

  (iii).      Remittance of Contributions:

Employers must deduct the appropriate amount of contribution from the salary of every worker registered with the Fund, and remit same promptly to FMBN. A yearly statement of your contributions shall be sent to you.

  Benefits of the Scheme

 (i)            Housing Loan:

The pool pf contributions is to provide housing loan for every Nigerian at relatively lo rate of interest. To borrow from the Fund you must be a contributor. The Housing Loan will assist you either to buy, build or improve your house. Should you want to borrow from the Fund all you need is to apply to any mortgage institution, where you will receive further information and assistance.

 (ii)          Fixed Rate of Interest:

The interest rate applicable at the time you take the loan will remain fixed until the loan is fully repaid.

 (iii)         Long Repayment Period:

You will be able to repay the loan over a period of twenty –five (25) years

 Whether or not you borrow from the Fund your contributions shall. Attract interest.

  Refund of Contributions

Your contribution together with the accrued interest will be refunded to you when you are sixty (60) years or retired or cannot longer continue in employment due to II-health.  

PROCEDURE FOR REGISTRATION

  All Nigerians in employment, whether self-employed or in paid employment, are required by Decree No. 3 of 1992 to contribute ‘2.5% (two point five percent) of their salary / income to the Fund.

 

The Procedure for registration is as follows

 

(1)               The Federal Mortgage Bank of Nigeria (FMBN) will supply Employer’s Registration Form NHF 1 to Employer or Self – employed.

(2)               Employer will complete Form NHF 1 and return to Federal Mortgage Bank of Nigeria

(3)               Federal Mortgage Bank of Nigeria will register the Employer and issue an Employer’s Registration Number.

(4)               Federal Mortgage Bank of Nigeria will issue Form NHF 2 to Employer for completion by Employees.

(5)               Employee will complete the Form NHF 2 and return to Employer.

(6)               Employer will return completed Form NHF 2 to Federal Mortgage Bank of Nigeria.

(7)               Federal Mortgage Bank of Nigeria will register Employee on Form NHF 2 and allocate Employee’s Participation Number.

(8)               At this point, Employee is now a participant; Employer will commence deduction of contributions at source.

(9)               Employer will remit contributions to Federal Mortgage Bank of Nigeria.

(10)           Federal Mortgage Bank of Nigeria will accept contributions ad issue receipt; a Passbook will be issued to every contributor.

(11)           All contributions will be recorded in the Passbook.

  WHO CAN APPLY?

(a)                Any Nigerian above the age of 21.

(b)               You must be a contributor to the National Housing Fund for a period of not less than six months.

(c)                You must have satisfactory evidence of regular flow of income to guarantee loan payment

 

PURPOSE

(a)          The loan shall be for the purpose of building, purchasing or renovating a residential accommodation.

(b)          No loan shall be for refinancing.

 

HOW TO APPLY

(a)         You are to apply to a duly licensed Primary Mortgage Institution (PMI) of your choice and NOT directly to Federal Mortgage Ban of Nigeria (FMBN).

(b)          You are to obtain loan application form from the same PMI.

 

SECURITY FOR THE LOAN

(a)       The property (residential accommodation) for which the loan is sought shall serve as security for the loan.

(b)        The property must have valid title documents (C of O).

(c)        The property shall conform to the existing planning laws and regulations (approved building plans).

(d)        The property shall possess sufficient value to recover the loan.

(e)        A mortgage property shall be insured against hazards.

(f)         The loan shall be secured by a first legal mortgage between you and the PMI.

 

 

HOW MUCH TO APPLY FOR

(a)          A borrower is entitled to a maximum amount of One million and Five Hundred Thousand Naira (N1, 500,000.00).

(b)          No individual shall be granted a loan in excess of 90% of the cost or value of the property to be mortgaged.

(c)            80% of the loan shall be provided by the Fund and 20% by the PMI.

 

INTEREST RATE

Interest rate shall be as prescribed by the National Housing Fund Decree No.3 of 1992 i.e. not more than 9% per annum.

 

HOW TO REPAY

(a)        The maximum repayment period shall be 25 years (b) Individual borrowers shall make repayments to the PM Is.

  FOR FURTHER DETAILS

(a)         You should contact a Primary Mortgage Institution (PMI) of your choice

(b)        You can obtain a copy of the Statutory Instrument on “Terms and Conditions for Obtaining NHF Loans by PMI and Individual Contributors’ AT N200.00 from 

FEDERAL MORTAGE BANK OF NIGERIA
PLOT 124 FESTIVAL ROAD,
AREA 2, GARKI –ABUJA
LOANS AND ADVANCES UNIT.