The term National Housing Fund is one that leaves confusion in the mind of lots of people. Are you one of the those struggling to understand the concept of the National Housing Fund? Here’s what you need to know about the National Housing Fund!
What is the National Housing Fund?
The National Housing Fund (NHF) established by the Act 3 of 1992 is a Federal Government Scheme that entitles all Nigerians over the age of 21 who are employed and earning to a low-interest, government-funded loan. The purpose of the Scheme is to make it easier to raise money to provide cheap housing for Nigerians, guarantee that loans are accessible for Nigerians to build, buy, or repair their homes, and offer low-cost mortgage financing to low-salary earners.
The scheme clearly states that Nigerian workers working in the public and private areas of the economy and making N3,000 or more a year are required to contribute approximately 2.5% of their basic monthly salary to the Fund via the Federal Mortgage Bank of Nigeria (FMBN).
Aims and Objectives of the National Housing Fund.
- Facilitating the mobilization of the fund in order to provide affordable housing for Nigerians.
- Guarantee that loans are available to Nigerians at all times for the building, buying, and upgrading of residential homes.
- Encourage the capital market to invest in real estate development by offering incentives.
- Allow the creation of specific programs that would guarantee the efficient financing of housing development, in particularly affordable housing for low-income employees.
- Offer appropriate policy control on how money and resources are distributed between the housing sector and other parts of the Nigerian economy.
- Give mortgage companies long-term loans so they can re-lend money to Fund contributors.
Who stands to gain from the NHF scheme?
The NHF program is for Nigerians in all facets of the country’s economy, especially for individuals with low and moderate incomes who are unable to afford commercial housing loans. Any person who intends to gain from the NHF scheme must be a registered contributor, and must be up to date with their contributions.
How can just 2.5% of your monthly income be enough to get a loan to build a house?
Contributing 2.5% of your basic monthly earnings makes you eligible to apply for the loan. After contributing 2.5% of your monthly income for a period of six months, you can borrow money from the funds that has been generated by contributors nationwide.
How can you apply for a NHF loan?
First and foremost, you need to know that only contributors are eligible to apply for loans. If you aren’t a contributor, that is, if you don’t contribute 2.5% of your monthly income, you can’t apply for a loan. Individuals who are interested in taking an NHF loan must apply through a recognized and properly licensed Primary Mortgage Institution who will then package and send their application to FMBN, however institutional borrowers such as construction companies, real estate developers can apply directly from the Federal Mortgage Bank of Nigeria (FMBN). The NHF loan can only be obtained once.
What documents are needed to apply for the NHF loan?
- Ensure you have filled out the Application Form.
- Proof of NHF involvement.
- Photocopies of title documents such as Certificate of Occupancy (C of O).
- A copy of your pay slips from the last three months.
- Open a savings account with a licensed Primary Mortgage Institution (PMI).
- Present value report for the home that is being considered for purchase or bills of quantities (BOQ) for the home that is being built.
- Certification of three-year tax compliance.
- Depending on the loan amount requested, equity contribution may be required.
- Possess sufficient proof of a consistent flow of income to guarantee the loan.
What is the highest loan amount a contributor can obtain and what is the repayment period?
The maximum loan that an individual borrower can obtain is ₦15 million, repayable over a maximum period of 30 years at an incredibly low interest rate of 6%. Do note that no person may receive a loan that exceeds 90% of the price or value of the property being mortgaged.
What Collateral is needed to secure the loan?
The only collateral here is the property you want to use the loan for. The loan does not require any other collateral.
How long does it take to get an NHF loan?
Processing of the loan application typically takes three to six months. The swiftness of the loan processing depends on the contributor’s capacity to fulfill all requirements and the location of the property.
How can I find out about my NHF balance?
The procedures below can be used by any NHF contributor who has registered their number with FMBN to rapidly verify their NHF balance or the status of their contribution.
- Dial *219# and send.
- Select option 2 and send.
- Select option 1 and send.
- Type the number option of the month you want to check and click send.
After completing the instructions above, your balance will show up on the screen if the FMBN has reconciled your monthly donations. However, if your balance doesn’t show up on the screen, you should get in touch with the closest FMBN office.
There you have the basic things you need to know about the National Housing Fund. Find out more about the National Housing Fund here! Enjoyed this post? You may also like 5 Top Real Estate Companies In Lagos!