HOW TO APPLY: FG Offers Nigerians N50m Housing Loans at 6% Interest
The Federal Government, through the Federal Mortgage Bank of Nigeria (FMBN), is offering eligible Nigerians access to housing loans of up to N50 million under the National Housing Fund (NHF) scheme.
The facility is designed to enable eligible NHF contributors to purchase, construct, improve or renovate residential properties at a concessionary interest rate of not more than six per cent per annum.
The mortgage can be repaid over a period of up to 30 years, subject to the applicant’s age, income, years in service and repayment capacity.
How the FMBN mortgage works
The NHF Mortgage Loan is administered by FMBN through accredited and licensed Primary Mortgage Banks (PMBs) and other approved mortgage institutions.
Prospective borrowers are not required to apply directly to FMBN for the mortgage. Instead, applications are submitted through an FMBN-accredited mortgage institution, which processes the application and conducts the necessary assessments.
Where a mortgage is approved, the property being financed serves as security for the facility.
The scheme offers eligible NHF contributors more favourable financing terms than many conventional mortgages, particularly through its concessionary interest rate and extended repayment period.
How much can applicants borrow?
Under FMBN’s current NHF Mortgage Loan terms, an individual can access up to N50 million.
However, the N50 million ceiling does not mean every applicant will qualify for the maximum amount.
The amount approved is determined by factors including the applicant’s income, repayment capacity and the cost or value of the property.
FMBN also provides that an individual should generally not receive more than 90 per cent of the cost or value of the mortgaged property.
Applicants should rely on FMBN’s latest published terms and information supplied by accredited mortgage institutions, as some older FMBN documents still contain lower maximum loan figures.
What is the interest rate?
The NHF Mortgage Loan attracts an interest rate of not more than six per cent per annum for eligible contributors.
FMBN currently provides the facility to accredited PMBs at four per cent, while the PMBs lend to eligible NHF contributors at a maximum rate of six per cent per annum.
Repayment period
One of the major features of the NHF mortgage scheme is its extended repayment period.
Eligible borrowers may repay the facility over a period of up to 30 years, although the actual repayment period will depend on the borrower’s circumstances, including age, income and years in service.
FMBN also assesses the affordability of the mortgage, with repayment generally restricted to a maximum of one-third of the applicant’s income.
Who is eligible?
The NHF mortgage facility is not automatically available to every Nigerian.
Generally, an applicant must:
– Be a Nigerian citizen aged 18 or above.
– Be registered under the National Housing Fund scheme.
– Have made continuous NHF contributions for at least six months.
– Have a regular source of income.
– Provide evidence of income where self-employed.
– Apply through an FMBN-accredited and licensed mortgage institution.
– Provide a property that meets applicable legal, planning and other requirements.
What can the loan be used for?
The facility is strictly intended for housing-related purposes.
An approved borrower may use the mortgage to:
– Purchase a residential property.
– Construct a house.
– Improve an existing residential property.
– Renovate an existing home.
Documents required
The documents required may vary depending on the nature of the application and the mortgage institution involved.
However, applicants may be required to provide:
– Evidence of NHF contributions.
– Proof of income.
– Recent payslips or other income documentation.
– Property title documents.
– Property valuation report.
– Completed mortgage application forms.
– Bill of quantities for construction projects.
– Employment and tax-related documents.
– Other legal and supporting documents requested by the mortgage institution.
How to apply
Step 1: Register and confirm NHF contributions
Applicants must be registered NHF contributors and have made the required contributions for at least six months.
FMBN also provides online services for NHF registration and account-related activities.
Step 2: Choose an accredited mortgage institution
Applicants should approach an FMBN-accredited and licensed Primary Mortgage Bank or other approved mortgage loan originator.
The institution will process the application and guide the applicant through the requirements.
Step 3: Submit the application
Applicants should complete the required forms and submit relevant income, NHF contribution and property documents through the accredited mortgage institution.
Step 4: Undergo assessment
The mortgage institution will assess the applicant’s repayment capacity and verify the submitted documents.
The proposed property will also undergo valuation, legal checks and other necessary assessments.
Step 5: Approval and disbursement
Where the application satisfies the applicable requirements and receives approval, the mortgage funds will be disbursed through the accredited mortgage institution for the approved housing purpose.
Nigerians seeking to benefit from the scheme are advised to verify the latest eligibility requirements, loan limits and application procedures directly with FMBN or an accredited mortgage institution before commencing the application process.
