The national housing fund is one of the ways by which we can access finance to purchase your choice property. It’s been anchored by the Federal Mortgage Bank of Nigeria. They distribute or loan out the money through the banks we call primary mortgage institutions; that is the regular mortgage banks we see around in conjunction with the Federal Mortgage Bank to get the money across to Nigerians. Make it easier for people to access it that way.

Any Nigerian that is above 18 years, has a source of livelihood, and is contributing to the fund can access that money. They have three categories of loan amount given: five, ten, and fifteen million. It used to just be five million until it became apparent that five million could not purchase any property of real value, or it limited what one could do with the money. After a review, the ten and fifteen million category was added.

However, if you are taking the five million option, you need to make a contribution of ten per cent equity contribution of 500,000 ; that is at the end of the day, the bank will give you 4.5 million. If you are taking the 10 million option, you will need to make 20 per cent equity contribution, which is 2 million, then the bank gives you 8 million. If its 15 million, then you have to make that equity contribution 0f 30 per cent; you bring 4.5 million, the bank gives you 10.5 to make it fifteen million.

But there are ways you can access these loans, people know about NHF, but get frustrated by the process. Especially if they have no knowledge of the workings. You are told normally, that you can actually access the fund for renovating a house, to purchase a new house, or to construct a house.

Sincerely, it works best for purchasing a new house from a developer who is working with the Federal Mortgage Bank already.

There are two aspects to NHF we need to take note of, there is the aspect that deals with the developer, whereby the developer is given money to build, then they can loan to the buyer to buy from the developer. The loan they gave to the developer now goes to the person buying, he will now pay up over a long period.

If you are wondering how long it will take to contribute for instance 10 million or more? It really does depend on how far you are from sixty (which is the retirement age) in terms of age, you can pay for as much as thirty years. Imagine that you borrowed 5 million when you were twenty-five and had just started to work? That means that you have about thirty five years, if you want to take that whole stretch.

At the end of the day it comes to a reasonable amount of money. One factor that determines your qualification may include what you earn, because you are expected to contribute and contribute 2.5% of your basic monthly income for the rest of your work life.

You may also ask, what if I want to make the payment in a shorter time instead of the long duration? Its possible, but you know that generally for example, the UN accepted standard is that you contribute at least or not more than 33% of income towards housing.

So if what you presented as your income allows you pay 33% within a shorter period, why not? It can be accepted, because the aim is really not to put do much pressure on your funding, that’s why the rate is the best you can get. It’s the only single digit mortgage facility available in the country at 6%, no matter the amount of the other charges accrued, for instance from the primary mortgage firm, when summed up, its not up to ten, neither does it cross into double digit.

In the midst of all these, if you fail to meet up with the payment at the expected time, your property being your security for the deal is lost, taken. In the case of an extended pay time, that can be discussed with the primary mortgage institution. They are the people on ground to administer the loan process, they will give you the disbursement and monitor the payment.

Whatever your issues always refer back to them and you will be sorted out, but ordinarily its supposed to run smoothly. Since the start of the NHF scheme in 1992, they have given out on record about a 100 billion so far. However, sharing it between the developers (estate developer loan) and the mortgage (the housing loan itself), the developers have got more share; about sixty billion naira.

Here’s how it works, the estate developer gets his money, builds his property and pays back in two years. Within the period of two years, he is expected to have generated NHF subscribers that will be interested in purchasing that property, then they will sign on to buy the property and take the loan from Federal Mortgage Bank. That’s how the developer gets paid or reduces the loan taken from FMB.

When you have a developer actually building and constructing, the loan will perform; it is when the developer fails to do so that issues arise. Some of these are being dealt with at the moment, and it’s been sorted out with the help of REDAN and the developers involved. Some logistics issues cause the default in payment, but it is being worked out by the bodies involved.

To Get NHF Here’s What To Do:

· Usually some workplaces provide room for the NHF contribution deducted from their staff salaries; if its not in place, you can walk into a mortgage bank and tell them you want to open an NHF account for your NHF contribution. They will assess you and tell you what you can pay once you give them your payroll.

· You need to have contributed for at least six months before you are eligible to apply for a loan.

· You need to have a satisfactory source of income as earlier stated, to guarantee the loan.

· There is the informal sector for the self-employed, this can be carried out under a cooperative umbrella or on their own. It is advisable though that they come as a group. People in this category can join NHF minded co-operatives and apply through them, because they will have projects that will suit the scheme and allow them apply. Here is the rest of what you need to get National Housing Fund Loan Scheme:

= Apply on a prescribed mortgage loan application form
= Submit photocopies of valid title documents (C of O)
= Approved survey/site plans
= Approved building plans
= Letter of consent to mortgage to a chosen mortgage home of your choice
= Priced bill of Quantities where applicable
= Valuation report prepared by a firm of registered surveyors and valuers where applicable
= Offer letter / Acceptance and Allocation letter (In case of Governments projects)
= In case of registered self employed, he/she must submit a copy of Articles and Memorandum of Association, and a copy of Articles and Memorandum of Association, and a copy of Certificate of Incorporation evidencing his/her employment status.
For give away you can download the NHF Act here and read more for yourself.
Nigeria Real Estate Hub
http://www.nigeriarealestatehub.com/building-and-owning-your-own-property-using-nhf.html
To your SUCCESS!!!

@OP, nice topic. I was discussing with a couple of friends recently on the need to access this fund. Not many Nigerians are aware of this fund though. Thanks all the same for sharing, I have one addition to my knowledge about this fund.

@ Iphyzi... Do you by any chance know any developer looking for buyers that want to pay through NHF?
Thanks for the info