How to get loan from the National Housing Fund (NHF) scheme

The National Housing Fund (NHF)

The National Housing Fund (NHF) scheme was established by Act 3 of 1992 to enable Nigerians in all sectors of the economy, particularly those within the low and medium income levels who cannot afford commercial housing loans to own houses. But what are the criteria needed and the procedures required in order to be able to secure loans under the scheme?

Eligibility

To be eligible for the NHF loan, a contributor must be above 21 years old, and must have contributed to the Fund for a period of not less than six months. He/she must apply through a registered and duly accredited mortgage loan originator, e.g. a Primary Mortgage Bank (PMB), who packages and forwards the application to FMBN. For individual borrowers there must be satisfactory evidence of regular flow of income to guarantee loan repayment.

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How to apply

Except for institutional borrowers who can apply for the loan directly from Federal Mortgage Bank of Nigeria (FMBN), individuals can only apply through a duly licensed and accredited Primary Mortgage Bank (PMB) of their choice and not directly to the FMBN. Loan applications are also to be obtained from the same PMB.

Formal sector

Open a savings account with a registered PMB, with at least six months consecutive contributions prior to application. Have satisfactory evidence of regular flow of income to guarantee the loan. Other requirements to process NHF loan include: Completed prescribed mortgage loan application form; Photocopies of title documents; Current valuation report on the proposed house to buy or bills of quantities (BoQ) for the house to build and;

Three years tax clearance certificate. Others are: Evidence of NHF participation; Copy of pay slips for the previous three months and; Equity contribution or personal stake of 30 percent, 20 percent or 10 percent depending on the loan amount applied for loans of 15 million, N10 million and N5 million, respectively.

Also required are: Letter of consent to mortgage to chosen PMB; 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.

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Informal sector

Workers in the informal sector can also benefit from the NHF scheme via the informal sector cooperative housing loan scheme (Coop Loan Scheme). The Coop Loan Scheme was designed to accommodate non-salaried informal sector Nigerians to join the NHF scheme through co-operative societies and avail themselves the opportunity to own houses. 

The loan facility under the scheme could be accessed in one of two ways, namely: Cooperative Housing Development Loan (CHDL) or Co-operative National Housing Fund Loan (CNL).

The CHDL enables a cooperative society that has acquired a plot of land to develop houses for allocation to its members. The parcel of land will have title in the name of the society which will act as the facilitator on behalf of its members in the loan transaction and which would facilitate construction of the housing unit. 

Document required for CHDL include: Certificate registration of the Co-operative society; Bye laws of the cooperative society; Detailed Profile of the Co-operative Society and; Resolution of the Board of Trustees of the Society signed by the chairman and the Secretary, authorising it to borrow.

On the other hand, the CNL window offers an individual co-operative member mortgage loan to buy a housing unit developed through the Cooperative Housing Development Loan or to renovate an existing one. Documents required to be submitted by a cooperative society, on behalf of its co-operators (under CNL) are:

Evidence of membership of Co-operative society; Evidence of NHF registration and up-to-date NHF contribution. Others are: Completed CNL application form; 

Two passport photograph; Prove of ownership of the object land /property; A guarantee from the cooperative society to which he/she belongs and; Certificate of registration of the Co-operative society.

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