The Federal Mortgage Bank of Nigeria (FMBN) is offering eligible National Housing Fund (NHF) contributors access to mortgage loans of up to ₦50 million at an interest rate of not more than 6 per cent per annum, with repayment spread over as much as 30 years.
The facility is designed to help eligible Nigerians buy, build, improve or renovate residential properties under the National Housing Fund scheme.
According to FMBN, the NHF Mortgage Loan is provided through accredited and licensed Primary Mortgage Banks (PMBs), which serve as the channel through which contributors access the facility.
How the FMBN mortgage works
An applicant does not simply walk into FMBN and collect the loan. The mortgage application is processed through an FMBN-accredited and licensed Primary Mortgage Bank.
Once approved, the property being financed serves as security for the mortgage.
FMBN says the facility is made available to accredited PMBs at 4 per cent interest for on-lending to NHF contributors at 6 per cent per annum, subject to the applicable terms and conditions.
How much can you borrow?
FMBN’s current NHF Mortgage Loan information places the maximum individual loan at ₦50 million.
However, eligible applicants are not automatically entitled to the full ₦50 million. The amount approved depends on factors including income, affordability and the value or cost of the property.
FMBN’s terms also provide that an individual should generally not receive more than 90 per cent of the cost or value of the mortgaged property.
Prospective borrowers should note that some older FMBN documents still display a ₦15 million ceiling. Applicants are therefore advised to rely on the latest terms published by FMBN and those communicated by accredited mortgage institutions.
What is the interest rate?
The NHF Mortgage Loan is available to eligible contributors at an interest rate of not more than 6 per cent per annum.
FMBN currently states that it lends the facility to accredited PMBs at 4 per cent, with the PMBs on-lending to NHF contributors at 6 per cent.
Repayment can run for up to 30 years
One of the major attractions of the NHF mortgage is its long repayment period.
Eligible borrowers can repay the facility over a maximum period of 30 years, although the actual repayment period is subject to factors such as the applicant’s age, income and years in service.
FMBN also applies an affordability test. Under the NHF framework, not more than one-third of the borrower’s income is generally considered for loan repayment.
Who can apply?
The NHF mortgage is available to eligible contributors who meet the applicable requirements.
Generally, an applicant must:
– Be a Nigerian citizen aged 18 or above.
– Be registered under the National Housing Fund scheme.
– Have made at least six months of continuous NHF contributions.
– Have a stable and regular source of income.
– Provide satisfactory evidence of regular income if self-employed or a non-salaried worker.
– Apply through an FMBN-accredited and licensed mortgage institution.
– Provide a residential property that meets applicable legal, title and planning requirements.
FMBN confirms that contributors can access the mortgage after six months of continuous NHF contributions.
What applicants should know
The NHF mortgage is not a cash grant. It is a secured housing loan that must be repaid, with the financed property serving as security.
The amount a borrower can access will also depend on affordability and the value of the property, meaning an applicant earning a lower income may qualify for considerably less than the ₦50 million maximum.
For Nigerians seeking to become homeowners, however, the scheme provides an opportunity to access long-term mortgage financing at a concessionary interest rate compared with many conventional housing loans.
Prospective applicants can verify their NHF contribution status and access FMBN’s current loan information before approaching an accredited mortgage institution.
Credit: Vanguard
