By Yinka Kolawole, with agency report

There are several factors inhibiting the average worker from accessing NHF loans to build, renovate or purchase a house.

These factors, according to experts, include lack of access to land, workers’ inability to repay loans or fear of the burden of loan repayment and the perceived mindset of the average Nigerian towards honouring long-term agreements. Others are low wages, low savings and inadequate mortgage facilities and, ignorance.

Indeed, investigations have revealed that many civil servants and private employees are not fully aware of the opportunities that exist in the National Housing Fund (NHF) for mortgage finance. Most government workers are in the dark about the operations of the scheme, in spite of the monthly NHF deductions from their salaries.

Some experts however noted that there options open to workers to enable them have easier access to the fund. President of Real Estate Developers Association (REDAN), Chief Olabode Afolayan, noted that workers can acquire land as a group, either through cooperative societies or as unions affiliated to the Nigeria Labour Congress (NLC).

“If they acquire land as a group or as a cooperative society, they can engage a developer and a mortgage bank to work out the modalities of developing the land through their access to the NHF loan.

“Such arrangements will also make the processing of the title documents relatively easier. Each of the workers who would benefit from such arrangement should be able to pay 10 per cent of the cost of the house they are proposing to build or acquire and the amount will represent their equity contributions to the property’s development,’’ he declared.

Afolayan further declared that workers can also approach estate developers building houses to see how they can get allocations to houses as NHF contributors. He noted that many estates have been developed to cater for the housing needs of workers in Kwara State through this means.

Former President of the Nigerian Institute of Town Planners (NITP), Mr Remi Makinde, asserted that many workers will be able to acquire their own houses if they explore the mortgage finance opportunities of the NHF to the fullest. “Workers should be aware that they are entitled to apply for NHF loans after six months’ contributions to the Fund; they can also ask questions from FMBN that manages the Fund.

Workers should also know the quantum of their NHF contributions in their respective offices, while consulting with mortgage banks on the procedures of getting the loan. They should similarly liaise with estate developers, as part of efforts to overcome any seeming obstacles to their obtaining the NHF loans,” he stated.

Under the NHF Act of 1992, employers of labour in the public and private sectors are mandated to deduct 2.5 percent of basic monthly from salaries of workers who earn N3,000 or more directly from source as their NHF contributions and remit same to the Federal Mortgage Bank of Nigeria (FMBN), the agency in charge of the Fund’s administration.

Contributors can apply for loans ranging from N5 million to N15 million, to be repaid over a maximum period of 30 years at 6 per cent interest rate. The law also made provision for refund to any contributor who has not obtained a house loan from the bank and has attained the age of 60 years; or retired from his employment and becomes incapable of continuing the contribution to the fund as specified in this act.

Requirements for obtaining NHF loan: Land ownership with transferable title; Be a contributor to NHF for at least the past six (6) months; Open an Account with a reputable PMI and build up 10 percent equity contribution to the funding of the project; Submit handwritten application; Obtain duly complete NHF loan application form/statement of income; Approved Survey Plan and; Approved Building Plan.

Others are: Priced Bill of Quantities from Quality Surveyor for new construction and estimate of works to complete the house for a building under construction; Valuation report from qualified Estate Surveyor (for existing structures, to be accompanied by photographs of the house; Offer letter (for purchase of existing building), where allocation paper/form is given, it shall only serve as evidence of offer and not a title document; In case of outright purchase an undertaking from the vendor to convey necessary title upon full payment.

(The payment of deposit can constitute your equity contribution) and; Cash flow projection on loan repayment with evidence of steady stream of income (pay slips for past 3 months, bank statement for past 3 years and /or a letter from your employer stating your total remuneration).