Psst… I have a secret!!!

Have you ever heard about the NHF (National Housing Fund) mortgage loan in Nigeria? Ha, you haven’t heard? You can access this trust fund to get a mortgage facility from FMBN (Federal Mortgage Bank of Nigeria) to build a house. Yes, you!

The information about this loan has been so shrouded in secrecy; a lot of Nigerians who actually qualify for the loan do not even know they are eligible. As always, the government of Nigeria will not share information with the populace but never mind, I am going to give you the inside scoop.

The NHF was designed for medium income earners to assist them in building homes. In fact, it is compulsory to contribute- according to the NHF Act No. 2 of 1992 which stipulates that a Nigerian earning the minimum national wage and above per annum in either the public or private sectors of the economy shall contribute 2.5% of his monthly salary to the fund. The NHF scheme is for Persons/workers and self-employed in different sectors of the economy. It is particularly for the benefit of medium-income earners who cannot afford commercial housing loans e.g. civil servants, traders, artisans, commercial drivers etc.

So you ask, how do I make contributions? Your employer is required to deduct 2.5% from your monthly basic salary and remit it to the FMBN within one month of deduction. Self-employed individuals are to pay their own contribution directly to a Primary Mortgage Institution (PMI). All the payments should be duly receipted.

To confirm your contribution status, all you need do is check with your PMI who will inquire from FMBN. You don’t have a PMI? You need one to be able to apply for the mortgage. If you have contributed continuously for at least 6 months, your PMI can package the application and forward to FMBN.

What you’ll need to apply are:

1. Completed application form
2. Photocopy of Title documents (for the house/land you wish to take the loan for; you must already have the land though)
3. Current valuation report on the proposed property
4. 3 years tax clearance
5. Evidence of the NHF participation (your contribution)
6. Copy of recent pay slips for the previous three months
7. 10% personal stake (you need to contribute 10% of the cost of the property)

As you can see, you really have to take the loan to buy, build or refurbish a house; you can’t use the loan for anything else. It must also be a residential property. The repayment of the loan is for about 30 years which is more than enough time for you to finish the property (if you are building from scratch) and even make money off it! The repayment is quite easy and affordable: repayment of monthly installments just like rent and at a convenient interest of 6%.

Don’t know any PMIs in Naija doing this? Or you have more questions? Ask me, I’ll let you know…