HOW TO OWN YOUR OWN HOUSE IN NIGERIA WITHOUT STRESS.

This is a guest post that promises to be very informative, enjoy.

PREAMBLE:

This write up is born out of a passionate desire to help Nigerians who are desirous to be landlords/landladies through the National Housing Scheme. Shelter is one of the basic necessities of every human being and if one should get his own, sixty percent of his/her life challenges are solved. No wonder housing is one of the transformation agenda of the present administration.

All Nigerians in employment, whether self-employed or paid employment are required by the National Housing Fund (NHF) Act No. 3 of 1992 to contribute 2.5% of their basic salary/income to the fund. The Act stipulates that a Nigerian worker 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/her basic monthly salary to the fund. Though this provision makes it compulsory for Nigerian workers and those in self-employment to participate in this scheme, it should be seen as also offering them the opportunity to enjoy the numerous benefits of the scheme.

The Federal Mortgage Bank of Nigeria was established by the Federal Government to help the low and medium class income earners have their own houses through the National Housing Scheme. The FMBN is the custodian of National Housing Fund (monthly contributions of all the contributors)

It has been discovered that over the years many Nigerians are not well informed of the benefits of this scheme and even some contributors do not know how to access this fund. I strongly believe that after going through this article you will be eager to be a landlord/landlady through this scheme. Our brothers and sisters in the Diaspora own their houses through mortgages and the trend is fast becoming a reality in Nigeria. Why can’t you be a part of this move now?

The Estate development is one of the fastest growing sectors of the economy but unfortunately mostly the rich are targeted neglecting the low and medium class. Developers are encouraged to key into this scheme and cover all classes of people.

AIMS AND OBJECTIVES OF FMBN:

The aims and objectives of the Federal Mortgage Bank of Nigeria are as follows-

1. To   facilitate the mobilization of funds for the provision of houses for Nigerians at affordable prices.
2. To ensure constant supply of loans to Nigerians for the purpose of building, purchasing and improving of residential houses.
3. To provide incentives for the capital market to invest in property development.
4. To provide proper policy control over the allocation of resources and funds between the housing sector and other sectors of the Nigerian economy.
5. To encourage the development of specific programmes that would ensure effective financing of housing development, in particular low income workers.
6. To provide long-term loans to mortgage institutions for on-lending to contributors to the fund.

PROCEDURES FOR REGISTRATION:

1. The Federal Mortgage Bank of Nigeria will supply employer registration form (NHF 1) to employers.
2. Employer will complete form NHF 1 and return to the nearest branch of FMBN.
3. Federal Mortgage Bank of Nigeria will register the employer and issue an employer’s registration number.
4. Federal Mortgage Bank of Nigeria will then issue form NHF.2 to the employers for completion by employees or directly to self employed or individual.
5. Employee will complete the form NHF 2 and return to the employer.
6. The employer or self-employed individuals will return completed form NHF2 to the Federal Mortgage Bank of Nigeria.
7. Federal Mortgage Bank will register employees on Form NHF2 and allocate employee 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 employee and the period covered.
11. Self-employed contributors will also commence monthly remittances of contribution to FMBN.
12. The Federal Mortgage Bank of Nigeria will accept contributions and issue receipts for all payments.
    
    

BENEFITS AND LOAN CONDITIONS.

The National Housing Fund scheme is for all sectors of the economy, particularly  those within the low and medium income levels who cannot afford commercial housing loans e.g. civil servants, traders, artisans, commercial drivers etc.  Any intending beneficiary must be a registered contributor and up to date with his/her contributors.

The 2.5% of monthly basic salary contributions qualify you to access the loan. The pool of funds created by the contributors nationwide becomes available to any contributor to borrow from after contributing for a minimum of six months.

A contributor interested in obtaining the NHF loan applies through a registered and duly accredited Primary Mortgage Bank who packages and forwards the application to the Federal Mortgage Bank.

The loan amount is determined by the applicant’s affordability. This entails his/her income level that will enable repayment of the loan.

Loans from NHF are available for outright purchase of residential houses, build, renovate or expand an existing house.

A contributor can only obtain National Housing Fund loan facility once in a life time.

The only collateral required from the loan beneficiary is the property in question. No other collateral is needed to secure the NHF loan.

A contributor is eligible to access a maximum loan amount of #15million repayment over a maximum period of 30 years or length of service for a civil servant at the interest rate of 6%.

A prospective applicant who wishes to obtain a loan to build a house is expected to have his/her land as well as acceptable title to the land prior to the application for NHF loan.

DOCUMENTS REQUIRED FOR OBTAINING NHF LOAN:

The documents required to obtain the NHF loan include-

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

PURPOSE AND HOW TO APPLY FOR A LOAN.

1. The loan shall be for the purpose of building, purchasing or renovating a residential accommodation.
2. No loan shall be for refinancing.
3. Applicant is to apply through a duly licensed and accredited Primary Mortgage Bank of his/her choice and not directly to Federal Mortgage Bank.
4. The Primary Mortgage Bank of the applicant’s choice must be accredited by FMBN to access the NHF facility.
5. Application forms for NHF loans are obtainable from the Primary Mortgage Bank.
   
   

WHO CAN AND HOW MUCH CAN BE APPLIED FOR:

1. Any Nigerian above the age of eighteen (18) years can apply for the NHF loan.
2. Applicant must be a contributor to the National Housing Fund for a minimum period of six (6) months.
3. A borrower is entitled to a minimum loan of Fifteen Million Naira (#15,000,000) or as determined by the Bank.
4. No individual should be given a loan in excess of 90% of the cost or value of the property to be mortgaged.
5. Equity contribution based on the new loan amounts is as follows-
   #15,000,000 - 30%
   #10,000,000 – 20%
   #5,000,000   - 10%

SECURITY FOR THE LOAN.

1. The property for which the loan is sought shall serve as security for the loan.
2. The property must have valid title document (C of O).
3. The Property shall conform with the existing planning laws and regulations (approved building plan)
4. The property shall possess sufficient value to recover the loan.
5. A mortgage property shall be assured against hazards.
6. The loan shall be secured by first legal mortgage of the property between the applicant and the Primary Mortgage Bank and assigned by FMBN.

REFUND OF CONTRIBUTIONS, WITHDRAWAL FROM THE SCHEME AND SUNDRY ISSUES

The National Housing Fund (NHF) Act No. 3 of 1992 provides that refund shall be made to contributor who has not obtained a housing loan upon:

1. Attaining the age of Sixty (60) years.
2. Retirement from employment and subsequent incapability to continue contribution. 
3. Refunds   are also made to a contributor that has obtained loan, liquidated the loan and has attained the age of sixty (60) years.
4. Refunds are also made to the next-of-kin of deceased contributors.
5. Refunds are processed and repayment effected within three (3) months of receipt of the application.
   
   

   

CONCLUSION

It is worthy to note that contribution records are computerized and statement of accounts is issued to individual contributors periodically.

The Federal Mortgage Bank of Nigeria also issue individual participation number to each contributor as account number which remains unchanged irrespective of transfer or change of place. Contributions are not lost in the event of a change of job or transfer. The affected contributor is expected to submit a duly completed NHF Registration Form (NHF2), indicating such change. The individual registration number which is permanent is then transferred to the new employer to maintain the contributor’s records.

This information will invariably help the developers, contributors and other individuals who are desirous of owning their own houses.

The writer is a fellow membership chairman of the Institute of Business Development. He is also in charge of the National Housing Scheme in NAMA. He can be contacted through amadi@ibdng.org, amadigu@yahoo.com

AMADI GEORGE FBDI

Deputy General Manager (Business Development & Investment).

Nigerian Airspace Management Agency. (NAMA)

An extract from the Instutute of Business Development monthly Newsletter.