Mortgage: How to access NHF Loan From Federal Mortgage Bank of Nigeria

TERMS AND CONDITIONS FOR OBTAINING NATIONAL HOUSING FUNDS LOANS (NHF)

WHO CAN APPLY

• Any Nigerian above the age of 18
• Applicant must be a contributor to the National Housing Fund for a minimum period of six months.
• Applicant must have satisfactory evidence of regular flow of income to guarantee loan repayment.

PURPOSE

• The loan shall be for the purpose of building, purchasing, or renovating a residential accommodation
• No loan shall be for refinancing

HOW TO APPLY

• Applicant is to apply through a duly licensed and accredited mortgage loan originator (MLO) of his/her choice and not directly to Federal Mortgage Bank of Nigeria (FMBN).
• The MLO of the applicant’s choice must be accredited by FMBN to access the NHF facility. Application forms for NHF loans are obtainable from the MLO

SECURITY FOR THE LOAN

• The property for which the loan is sought shall serve as security for the loan.
• The property shall conform with the existing planning laws and regulations (approved building plan).
• The property shall possess sufficient value to recover the loan.
• A mortgage property shall be insured against hazards
• The loan shall be secured by first legal mortgage of the property between the applicant and the mortgage loan originator and assigned to FMBN.

REQUIREMENTS FOR ACCESSING AN NHF LOAN

• Open a savings account with a registered PMB
• Contribution to the fund for at least six months prior to application.
• Have satisfactory evidence of regular flow of income to guarantee the loan.
• Submit photocopies of valid title documents (e.g. C of O).
• Approved survey/site plans
• Approved building plans
• Priced Bill of Quantities where applicable
•  Valuation report prepared by a firm of registered surveyors and valuers where applicable
• Three years tax clearance certificate
• Letter of consent to mortgage to your chosen PMB
• Completed prescribed mortgage loan application form
• Evidence of NHF participation
• Copy of pay slips for the previous three months
• Equity contribution of personal stake of 30 percent, 20 percent or 10 percent depending on the loan amount applied for loans of N15 million, N10 million and N5 million respectively
• Offer letter/Acceptance and Allocation letter (in case of government projects)
• In case of registered self-employed applicant, a copy of Articles and Memorandum of Association and a copy of Certificate of Incorporation as evidence of employment status must be submitted.

HOW MUCH TO APPLY FOR

• A borrower is entitled to a maximum loan of fifteen million naira (N15, 000,000.00) or as determined by the Bank.
• No individual should be given a loan in excess of 90% of the cost or value of the property to be mortgaged.
• Equity contribution based on the new loan amounts is as follows:
  • N15,000,000.00 – 30%
  • N10,000,000.00 – 20%
  • N5,000,000.00 – 10%

INTEREST RATE

• Interest rate shall be as prescribed by the National Housing Fund Act which is not more than 6% p.a.

The maximum repayment period shall be 30 years. Individual borrower shall make repayment through the mortgage loan originator through which they obtained the loan.

SOURCE: FMBN