The Federal Government, through the Federal Mortgage Bank of Nigeria (FMBN), offers loan to eligible Nigerians seeking to buy, build, improve or renovate their homes under the National Housing Fund (NHF) scheme.
The Federal Government Loan is currently available to eligible contributors at an interest rate of up to six per cent per annum, with a repayment period of up to 30 years.
According to information published by FMBN, eligible contributors can access up to ₦50 million, subject to affordability, the value of the property and other lending conditions.
Here are the key things applicants need to know about the scheme and how to apply for the federal government loan.
What is the FMBN mortgage loan?
The NHF Mortgage Loan is a housing finance facility administered by FMBN through accredited and licensed Primary Mortgage Banks and other approved mortgage loan originators.
The facility can be used to purchase, construct, improve or renovate an owner-occupied residential property, with the property serving as security for the loan.
Unlike conventional commercial mortgages, the NHF facility offers contributors a longer repayment period and a concessionary interest rate.
Who is eligible?
Applicants generally have to meet the following conditions:
Be a Nigerian citizen aged 18 or above.
Be a contributor to the National Housing Fund.
Have made continuous NHF contributions for at least six months.
Have a stable source of income or, for self-employed applicants, provide evidence of regular income.
Apply through an FMBN-accredited and licensed mortgage loan originator or Primary Mortgage Bank.
Have a property that meets relevant legal and planning requirements.
FMBN also assesses an applicant’s repayment capacity, with loan repayment generally subject to an affordability threshold based on income.
How much can you borrow?
FMBN’s current NHF Mortgage Loan information states that contributors can access up to ₦50 million, subject to affordability and other lending conditions.
The value of the property is also taken into consideration. FMBN’s published conditions state that an individual should not receive more than 90 per cent of the cost or value of the property being mortgaged.
The older ₦15 million limit still appears in some FMBN documents and online materials. Applicants should therefore rely on the latest terms provided by FMBN and their accredited mortgage institution when applying.
What is the interest rate?
The interest rate for NHF contributors is not more than six per cent per annum.
FMBN currently states that the facility is provided to accredited Primary Mortgage Banks at four per cent for onward lending to NHF contributors at six per cent.
How long do you have to repay?
The maximum repayment period is 30 years, subject to factors such as the applicant’s age, income and years in service.
Repayments are made through the mortgage loan originator or Primary Mortgage Bank through which the applicant obtained the facility.
How to apply
1. Confirm your NHF contribution
Applicants must first be registered as NHF contributors and meet the required contribution conditions.
FMBN provides an online personal or individual NHF registration platform for new contributors.
2. Choose an accredited mortgage institution
Applicants do not simply walk into FMBN to collect the mortgage loan directly.
The application is made through a licensed and FMBN-accredited Primary Mortgage Bank or mortgage loan originator, which processes the application and submits it to FMBN where applicable.
3. Obtain the mortgage application form
The accredited mortgage institution will provide the relevant application form and guide the applicant on the documents required for the particular application.
4. Prepare your documents
Depending on the nature of the application, applicants may be required to provide:
Completed mortgage loan application form;
Evidence of NHF contributions;
Proof of income;
Recent payslips or other evidence of income;
Property title documents;
Valuation report;
Bill of quantities where the loan is for construction;
Relevant tax and employment documents; and
Other legal documents required by the mortgage institution.
The exact documentation may vary depending on whether the applicant intends to buy, build or renovate a property.
5. Submit the application
The completed application and supporting documents are submitted to the accredited mortgage institution.
The institution assesses the applicant’s income, repayment capacity, property and documentation before forwarding the application to FMBN where applicable.
6. Property and legal checks
The property undergoes valuation and legal checks.
FMBN’s conditions require the mortgaged property to provide adequate security and comply with relevant planning and legal requirements.
7. Approval and disbursement
Once the required conditions are satisfied and the loan is approved, the funds are disbursed through the mortgage loan originator for the approved housing purpose.
What can the loan be used for?
The NHF Mortgage Loan can be used to:
Buy a residential property;
Build a home;
Improve an existing home; or
Renovate an existing home.
FMBN specifically lists these as eligible housing purposes under the NHF facility.
How can Nigerians check their NHF contributions?
FMBN provides digital channels through which contributors can access information about their NHF accounts.
The bank’s website also provides online registration and account-related services for contributors.
Important warning for applicants
Applicants should be wary of individuals who claim they can “secure” an FMBN loan in exchange for money.
FMBN has issued warnings about fraudsters posing as NHF facilitation officers. Applicants should deal only with FMBN and its accredited mortgage institutions and verify any request for payment before proceeding.
Before submitting an application, prospective borrowers should confirm the latest eligibility requirements, loan limits, interest rates and documentation directly with FMBN or an accredited mortgage institution, as these terms may be updated.
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