The National  Housing  Fund  (NHF)  scheme  was established in 1992  to address the  constraints  to the mobilization of long term funds  for housing finance  and ensure   that  every Nigerian has  access  to housing  loans  at affordable  interest rate through participation and  contribution to the National Housing  Fund.

The overall objective is to provide  cheap  source  of loanable funds  to nurture and  sustain   the  mortgage industry and  eventually facilitate affordable home- ownership for the  low and  medium  income  groups  in the  country.
Section   14(2) of the  National Housing Fund  Act Cap N .45 of 1992  stipulates that  a contributor  to the  Fund  can  access  a loan  from the  Fund  for the  purpose of building, purchasing  or renovation of existing  homes /houses.
To achieve this,   FMBN has   developed concessionary loan windows to enable Nigerians access   mortgages for home ownership.
However,    the   realization   of this    objective has    been    hampered by   several challenges to housing finance   in Nigeria, which include, amongst others:
a)   Lack of access to land.
b)  Inadequate   funding for the housing sector
c)  Inaccessibility of mortgage loans due to lack of proper title to properties.
d) Low income   of prospective borrowers   which affects affordability.
e) Cumbersome    procedures    for   obtaining   Governor’s   consent    to   land transactions which is also costly.
These challenges have limited the number of contributors to the NHF who have benefitted from the Scheme.   As a result,  although there  are currently about 4 million Nigerians that  are  registered  and  are  contributing to NHF, FMBN has – been able to provide mortgage loans  to only about  60,000  contributors.
This  seemingly dismal  number has  created a negative image for the  Bank  from the  public who  perceive the  Bank  as  not  having effectively  delivered on  its mandate.
It has therefore become necessary for FMBN to develop some quick-wins that will allow a greater number of Nigerians access to the National Housing Fund.
It  is  in  view  of  the   foregoing  that a  new  product  is  being   proposed  to  be introduced by the Bank.
The product shall   be called the FMBN HOME RENOVATION LOAN (FHRL). This product will afford Nigerians an opportunity to access mortgage loans for the renovation or improvement of their existing homes.
The product is specifically designed for Nigerians who are contributors to the National Housing Fund and desire to renovate or improve existing properties which are personally owned by them or through family ownership.
It is proposed that FMBN will approve and  disburse  the  Home  Renovation Loans  through the  Federal  Government  Staff Housing Loans  Board  (FGSHLB) for Federal Civil Servants  and  through the Office of the Head of Service or any other  body recognized by the Bank  at the State  level, in the  case  of State  civil servants,
At the federal level, applications are to be aggregated by the FGSHLB while at the State level applications are to be aggregated by the relevant authority (as stated above) and   forwarded to FMBN through the State   Controller of the particular State.     In  the  case  of employees in  the  organized private sector (including other   government  agencies   and   parastatals  not   covered by  the activities of FGSHLB)  the  applications shall  be  aggregated by the  Permanent Secretary or Chief Executive of the organization.
The applications shall  be received and assessed at the  respective State  Offices, to  accord  a  level  of  ownership for  effective management  of  the   loans   and broaden the Bank’s risk asset  origination platform.
For applications emanating from State Offices, the loans shall be approved and disbursed directly to the accounts of the beneficiaries after receipt of consent to disburse from the relevant authority (as above) through which the applications were submitted.
a.     The applicant shall be a contributor to the National Housing Fund
b.     The  maximum  loan  amount   shall  be  Nl,000,000.00   (One  million   naira only),   subject    to  the   income   limit   of  the   beneficiary  as   well   as   the ultimate cost  of renovation.
c. Applicants will apply through the   Federal    Government Staff   Housing Loans Board   (in the   case   of Federal   Civil Servants) and through   the Office of the Head of Civil Service of the State or other relevant authority recognized by FMBN (in the case of State civil Servants)
d. Approved loan amount shall be disbursed in lump sum to the Federal Government   Staff Loans Board (FGSHLB) (in the  case  of Federal Civil Servants) and directly  to the account of beneficiaries in the  case  of State Civil Servants  and  employees  of the  organized private sector, after acceptance  of offer and  the  fulfillment of conditions precedent to draw-down.
e. The loan tenor   shall   be a maximum of three   (3) years   or employee’s remaining years of service, whichever is less.
f. Repayment of the  loan  shall  be through monthly repayments  for a tenor not  exceeding three   (3) years,   via direct  deductions  by the  FGSHLB and the  respective Head  of Service/ accounts  office of the  States.
g. Monthly repayment shall not exceed 331/3°/o of applicant’s monthly salary/ income.
h. The interest   rate shall be 8% for the duration of the loan. This is because of the high risks involved as well as the less cumbersome process and documentation required.
i. The facility shall  not  be available to any  contributor  who  has  enjoyed  an NHF loan  to buy  or build  a house.
j. The facility could be taken jointly by a couple, subject to the   income assessment of both parties.
k. The loan can only be taken once in five (5) years.
l. Beneficiaries may however, be eligible to apply   for NHF loans for home purchase after fully liquidating a Home Renovation Loan earlier taken.
m. Applications are to be submitted with certified Bill of Quantities indicating the amount required for the renovation.
I. The security for the loan shall be the following:
II. Letter of Undertaking from the Federal Government Staff Loans Board (FGSHLB) to deduct and remit the monthly repayments to FMBN;
III. And that in the event of resignation, death or disengagement from service, the    FGSHLB shall be responsible for liquidation of the outstanding loan balance through the beneficiary’s terminal benefits.
IV. Applicants  shall   provide two  (2) guarantors  with   verifiable sources  of regular   income;  in  case  the  beneficiary’s terminal  benefits  may  not  be sufficient to offset the  loan.
V. Applicants   shall   take   out   a Reducing Term   Assurance   Policy which guarantees          the outstanding loan and   covers death,   incapacitation   and loss of job.
b) In the case of State Civil Servants
I. Letter of Undertaking   from the Office of Head of Service   to deduct   and remit monthly repayments   to FMBN;
II. And  that   in  the   event of  resignation,    death   or  disengagement     from service, the  MDA shall  be responsible for repayment   of outstanding  loan balance  through  the beneficiary’s  terminal  benefits.
III. Applicants shall provide two (2) guarantors with verifiable sources   of regular   income; in case the beneficiary’s terminal benefits may not be sufficient to offset the loan.
The    Scheme,   if  properly  implemented,   has  the   potential    to  impact    very positively  on  the   NHF  Scheme as  well  as  the  overall  corporate  image  of the Bank.
Mr. Lawal Isa Head of Department, Corporate   Affairs, FMBN.



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  1. This is a lofty idea and would further deepen mortgage business in the country. Mortgage is one sector whose economic potentials are yet to be fully tapped into. I hope this idea will help in reversing the trend.

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