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Housing finance: Steps to obtaining NHF loan

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The National Housing Fund (NHF) scheme was established by Act 3 of 1992 to enable Nigerians in 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, and commercial drivers etc., to own houses.

The aims and objectives of the fund include: Facilitating mobilisation of fund for the provision of houses for Nigerians at affordable prices; Ensuring constant supply of loans to Nigerians for the purpose of building, purchasing and improving of residential houses; Providing incentive for the capital market to invest in property development; Encouraging development of specific programs that would ensure effective financing of housing development, in particular low cost housing for low income workers and; Providing long term loan to mortgage institutions for on-lending to contributions to the fund.

To be eligible for the NHF loan, an intending beneficiary must be a registered contributor and up to date with his/her contributions – 2.5 percent of monthly basic salary contribution, for a minimum of six months, to qualify for the loan.

A contributor interested in obtaining NHF loan must apply through a registered and duly accredited mortgage loan originator, e.g. a Primary Mortgage Bank (PMB), who packages and forwards the application to FMBN. Applicants are required to provide satisfactory evidence of regular income. Deducted monthly contributions must be remitted to FMBN promptly, and at least 6 months contributions should be made.

The NHF loan cannot be obtained to purchase a piece of land to build house. A prospective applicant who wishes to obtain a loan to build a house is expected to have his/her land as well as an acceptance title to the land prior to the application for NHF loan.

The only collateral required to obtain the NHF loan is the property in question – being built or bought. No any other collateral is needed to secure the NHF loan.

A contributor is eligible to access a maximum loan amount of N15million repayable over a maximum period of 30 years at an affordable interest rate of 6 percent. The loan is repaid on monthly installation from the monthly income of the beneficiary. This mode of repayment has the advantage of been both affordable and convenient.


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