By Terhemen Ikyaave
The National Housing Fund Scheme presents a convenient and cost-effective opportunity for Nigerians, especially those within the low- and medium-income segment, to become homeowners.
The scheme was set up by the federal government in 1992. All Nigerians above eighteen years old working in the economy’s public, private, and informal sectors are eligible to register and participate by contributing 2.5 percent of their monthly incomes.
Six months of consecutive contribution to the National Housing Fund Scheme qualifies a subscriber to apply and access a suite of affordable home loans on offer by the Federal Mortgage Bank of Nigeria (FMBN).
This includes the FMBN National Housing Fund Mortgage Loan. The loan provides up to N15million at a six percent interest rate to NHF subscribers to purchase their dream homes. Eligible properties include FMBN-funded properties and homes built by private developers.
To ensure the availability of affordable housing stock, FMBN partners with reputable developers to deliver one-, two- and three-bedroom bungalows and apartment buildings at prices ranging from N4M to N15M nationwide.
Unlike commercial mortgage loans, the FMBN NHF Mortgage loan offers very convenient terms. First, beneficiaries can repay the loans in monthly installments over 30 years.
Second, loans of N5million and under attract zero percent equity, and those over N5million to N15million require flat equity of ten percent.
Another FMBN housing product is the individual Home Construction Loan. The loan provides up to N15million to NHF contributors with unencumbered land, legal titles, and approved building plans to undertake self-construction. It is given at a seven percent interest rate to Beneficiaries to pay back over 15 years.
Contributors to the National Housing Fund Scheme are also eligible to take advantage of the FMBN Rent-To-Own Housing Scheme. The scheme makes it possible for an NHF contributor to move into an FMBN-owned housing property as a tenant and pay towards ownership of the property in monthly or annual installments over 30 years at an interest rate of seven percent!
Additionally, NHF subscribers can access the FMBN home renovation loan, which provides up to N1million to beneficiaries who already own their homes to carry out improvements.
To further expand the range of housing product choices available to subscribers to the National Housing Fund Scheme, FMBN recently introduced two innovative Mortgage products.
This includes the Diaspora Mortgage Loan, which would enable Nigerians who live abroad to access up to N50million to own a home in Nigeria. Terms include 30 percent equity, a 9 percent interest rate, and a ten-year payback period.
Next is the Interest-free Rent-to-Own scheme. FMBN developed the product to eliminate the challenges that Nigerians who want to own their homes through the National Housing Fund Scheme face because of the interest-based nature of the Bank’s existing housing products.
The product uses a rent-to-own model that allows beneficiaries to move into FMBN and non-FMBN-funded homes and pay towards full ownership using monthly/quarterly, or annual rentals.
While it is a fact that owning a home is a capital-intensive venture, registration and contribution to the National Housing Fund Scheme offer Nigerians an affordable path to own their homes.
Nigerians should therefore subscribe to the scheme and take advantage of the broad range of affordable FMBN housing products to own their homes. NHF Registration is available at all FMBN Branch offices in state capitals nationwide.
Ikyaave is a public policy analyst based in Abuja.