WHAT YOU NEED TO KNOW ABOUT THE NATIONAL HOUSING FUND

The National Housing Fund is a scheme set up by the Nigerian Government pursuant to the provisions of the National Housing Fund Act, CAP N45, LFN 2004, first established in the year 1993. Sounds strange, doesn't it? Well, if you didn't know about this, you are part of the 93.7% of Nigerians still unaware. Don't feel bad about that, you're at the right place. 

The NHF was established to enable Nigerians in all sectors of the economy, particularly those within the low and medium income levels who cannot afford commercial housing loans, such as civil servants, traders, artisans, and commercial drivers etc., to own houses.

HOW IS IT FUNDED?

The Act stipulates that funding of the scheme will come from mandatory contribution of 2.5 percent of monthly income of Nigerians earning N3000 and above per annum, in both public and private sectors; commercial and merchant banks to invest 10 percent of their loans and advances portfolio; insurance companies to invest 20 percent of non-life and 40 percent life funds in the housing sector, with 50 percent of these directly in NHF and; financial contributions of the Federal Government. The pool of funds created by these becomes available to any contributor to borrow from, after contributing for a minimum of six months.

WHO CAN ACCESS THE FUND?

• Any Nigerian above the age of 21 can apply for this fund. However, they must be a contributor to the National Housing Funds for a period of not less than six months. This condition is easy to ascertain for applicants in paid/salary employment. 
• For individual borrowers there must be satisfactory evidence of regular flow of income to guarantee loan repayment. This means that if you are not working directly for the government or a registered company or organisation, you must present proof of a means of steady flow of income. So, if you own a business or private outfit, you can also access the loan. For the people in private/trading businesses, there might be need to resort to their bank statements of account.
• Also, To be eligible for the NHF loan, a contributor interested in obtaining NHF loan must apply through a registered and duly accredited mortgage loan originator, e.g. a Primary Mortgage Bank (PMB), who packages and forwards the application to Federal Mortgage Bank of Nigeria. Applicants are required to provide satisfactory evidence of regular income. Deducted monthly contributions must also be remitted to the FMBN promptly, and at least 6 months contributions should be made.

• Alongside the facts stated above, the NHF loan cannot be used to purchase piece of land to build a house. A prospective applicant who wishes to obtain a loan to build a house is expected to have his/her land as well as an acceptance title to the land prior to the application for NHF loan.
• Contributors can apply as an individual for NHF loan to develop a land or buy directly from government consort estate or private estate developer. The only collateral needed for NHF loan is the property in question. No other collateral is required to secure the loan.These loans can also be processed and accessed on your behalf with the help of a Real Estate Agency such as ours. At White Avenue Real Estate, we are more than willing and happy to help you process your NHF loan free of any extra charges.

Benefits available to contributors include: 

• Housing loan of up to 90 percent of the cost of the house; 
• Interest on loans remains fixed throughout the life of the mortgage at 6 percent per annum;
• Long period of repayment of up to 30 years; Contributions can serve as additional old age security; 
• Refunds with 2 percent interest on retirement and finally, 
• Maximum loan of N15 million can be borrowed.

Documents Required to Process the Loan:

1. Completed application form.
2. Photocopy of title documents
3. Current valuation report on the proposed house to buy or bills of quantities (BOQ) for the house to build.
4. Three years tax clearance certificate.
5. Evidence of NHF participation
6. Copy of pay slips for the previous three months.
7. Equity contribution or personal stake of 30%, 20% or 10% depending on the loan amount applied for.

 To access your loan, you must first be registered as a contributor. How can this be done? The procedure is stated as follows: 

(Pay close attention, this is the important part!)

1.The Federal Mortgage Bank of Nigeria (FMBN) will supply Employer Registration Form (NHF1) to employers.

2.Employers will complete form NHF1 and return to the nearest branch of the 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 NHF2 to employers for completion by employees or directly to self employed or individual.

5.Employee will complete the form NHF2 and return to the employer.

6.The employer or self-employed individuals will return completed form NHF2 to Federal Mortgage Bank of Nigeria.

7.Federal Mortgage Bank of Nigeria will register Employees on Form NHF2 and allocate employees participation number to each employee/self-employed individual.

8.Federal Mortgage Bank will issue a passbook to each of the registered employees where the monthly deduction of his/her 2.5% basic salary will be posted by the employer.

9.At this point, an employee is now a registered participant of the National Housing Fund.

10.Employer will commence deduction of contributions at source. Such deductions/contributions are remitted to Federal Mortgage Bank of Nigeria with schedule of payment indicating the amount contributed by each employee and the period covered.

11.Self –employed contributors will also commence monthly remittances of contributions to FMBN.

12.Federal Mortgage Bank of Nigeria will accept contributions and issue receipts for payments.

Now that you are now a registered contributor, you can access your funds so long as the procedure above has been followed through and you have contributed to the fund for up to six months. The next step would be find your property. Remember, the NHF would not be granted to purchase land, so, you have to have your property already. What the NHF would do would be to support you in developing your property. 

Still confused? Look at it from this angle: The NHF would not be granted in whole to pay for your house, this means that a percentage of it has to be paid for already. What the NHF does is to support your passion to own a home in Abuja. We share this vision here at White Avenue. We are equally passionate in delivering service and excellence while changing the face of real estate development in Abuja. This is everything you need to know about the NHF Scheme and we are programmed to bring you more. 

At White Avenue, we bring your housing dreams to life. Not only do we help you process and access your loan when you purchase any of our properties, you can be assured of the best deals and plans to suit your needs. All you have to do is sit back and watch your investment grow. We carry you along every step of the way and tailor your investment to suit your ideals and preferences. At White Avenue, we are client centric and that is what makes us the best in Abuja.

Knowledge is power but what you do with makes the difference. Make the right choice today by joining us at White Avenue!

Visit us at 5th Floor Yobe Investment House, 

Plot 823 Ralph Shodehinde Street, Central Business District 

You can also give us a call on 09099582911, 08187845406. 
We look forward to hearing from you, Thank you.