What You Need To Know About The National Housing Fund

The term National Housing Fund leaves confusion in the mind of lots of people. Are you one of those struggling to understand the concept of the National Housing Fund? We got you covered!

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 21 who are employed and earning to a low-interest, government-funded loan. The aim of the NHF 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 must 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.

  1. It facilitates the mobilization of funds to provide affordable housing for Nigerians.
  2. Guarantee that loans are always available to Nigerians for building, buying, and upgrading residential homes.
  3. Encourage the capital market to invest in real estate development by offering incentives.
  4. Allow the creation of specific programs that would guarantee the efficient financing of housing development, particularly affordable housing for low-income employees.
  5. Offer appropriate policy control on how money and resources are distributed between the housing sector and other parts of the Nigerian economy.
  6. Give mortgage companies long-term loans so they can re-lend the 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 cannot afford commercial housing loans. Any person who intends to gain from the NHF scheme must be a registered contributor and be current 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 six months, you can borrow money from the funds generated by contributors nationwide.

How can you apply for a NHF loan?

Firstly, you need to know that only contributors can 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 interested in taking an NHF loan must apply through a recognized and properly licensed Primary Mortgage Institution, which will package and send their application to FMBN. However, institutional borrowers such as construction companies and real estate developers can apply directly from the Federal Mortgage Bank of Nigeria (FMBN). The NHF loan can only be obtained once.

What paperwork is required to apply for an NHF loan?

  1. Ensure you have filled out the Application Form.
  2. Proof of NHF involvement.
  3. Photocopies of title documents such as Certificate of Occupancy (C of O).
  4. A copy of your pay slips for the last three months.
  5. Open a savings account with a licensed Primary Mortgage Institution (PMI).
  6. Present value report for the home being considered for purchase or bills of quantities (BOQ) for the home being built.
  7. Certification of three-year tax compliance.
  8. Depending on the loan amount requested, equity contribution may be required.
  9. 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 an individual borrower can obtain is ₦15 million, repayable over 30 years at a meager 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 required is the property for which you want to use the loan. The loan does not require any other collateral.

What is the turnaround time for 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 property’s location.

How can I find out about my NHF balance?

Each NHF contributor who has registered their number with FMBN can quickly check their NHF balance or contribution status by following the steps below.

  1. Dial *219# and send.
  2. Select option two and send.
  3. Select option one and send.
  4. Type the number option of the month you want to check and click send.

After completing the instructions above, your balance will appear on the screen if the FMBN has reconciled your monthly donations. However, if your balance doesn’t appear on the screen, you should contact 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!

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