Housing being one of the most crucial components of human life leaves everyone with no choice but to have a roof over their heads, thus everyone requires a place to call home. In essence, the Federal Mortgage Bank of Nigeria (FMBN) was founded to ensure that Nigerians had reliable and inexpensive access to homeownership through the introduction of the Federal Mortgage Loans program.
Many Nigerians, however, fail to take advantage of this opportunity, as the Federal Mortgage Bank of Nigeria makes it easy to become a property owner with the necessary information and strategy fixed in place. Meanwhile, in this article, we’re going to discuss extensively how you can get access to a Federal Mortgage loan in Nigeria, the steps and procedure to it.
Federal Mortgage Loans Details in Nigeria
Let’s start by knowing the meaning of Mortgage Loan;
A Mortgage Loan is a loan that can be used to purchase or refinance a home. “Mortgage loans” is another term for mortgages. Mortgages allow you to purchase a home without having to pay in full but as time proceeds. It’s mostly granted to individuals who are interested in owning a house but don’t have the total cost of the house available at the moment. Let’s discuss the Federal Mortgage Loans;
The Federal Mortgage Bank of Nigeria (FMBN) is an institution that was established in the year 1956 to lessen the burden of Nigerians in some certain projects. It became Nigeria’s apex mortgage institution in 1994. Since then, it has maintained and overseen the National Housing Fund, a contributing savings system (NHF).
The NHF is a social savings project that aims to raise long-term money to provide contributors with low-interest loans. It is one of the FMBN’s main responsibilities. The National Housing Fund Act governs federal mortgage bank loans in Nigeria (1992).
The Federal Mortgage Bank of Nigeria has its main purpose: that’s to improve the availability of inexpensive and easy-to-acquire homeownership in Nigeria. The organization accomplishes this primarily through long-term liquidity and the creation of new products and services.
According to the Federal government of Nigeria, there is various decree guiding the organization to ensure it functions according to its main goal. They include;
- Collect and administer the National Housing Fund according to the NHF Act’s stipulations.
- Provide Nigerian mortgage institutions with long-term credit facilities.
- Encourage the establishment and growth of viable main and secondary mortgage institutions to meet the demand for housing in Nigeria’s various regions.
- Do anything and engage in any transaction that, in the Board’s opinion, is required to guarantee the appropriate performance of the FMBN Act’s functions.
- Investing both domestic and international funds in the housing market.
- Connect the stock market to the housing market.
- Create and run a thriving secondary mortgage market.
Who is Eligible to Apply for a Federal Home Loan?
- You must be a Nigerian who is at least 18 years old before you can qualify to apply for Federal Mortgage Loans.
- You must have made a six-month contribution to the National Housing Fund
- Applicants must also show that they have a consistent source of income.
How Do I Apply for A Federal Mortgage Loan?
It is common knowledge that you must apply for a loan before receiving one. All you have to do when you require a loan is apply for one. The following is the procedure for applying for a Federal Mortgage Loan in Nigeria:
- Institutional borrowers can apply for the loan directly through the Federal Mortgage Bank of Nigeria (FMBN).
- Individuals can only apply through a fully regulated Primary Mortgage Bank (PMB) of their choice. However, you will not be able to apply for the loan through FMBN.
- The Federal Mortgage Loan applications must be obtained from the same Primary Mortgage Institution.
- You must have registered your principal mortgage institution with FMBN in order to access the national housing fund service.
Federal Mortgage Loans Required Documents
In general, the following documents are required:
- The application form must have been duly completed
- Title papers photocopied
- Current value report for the house you want to buy or bills of quantities for the house you want to build.
- Certificate of tax clearance for three years.
- Evidence of NHF involvement
- Paystubs for the preceding three months, copied
- Depending on the loan amount requested, an equity investment or personal ownership may be required.
The Steps for Registering for a Federal Mortgage Loan?
All Nigerians in employment, whether self-employed or employed, are required to contribute 2.5 per cent of their basic salary/income to the fund under the NHF Act No.3 of 1992.
The registration procedure is as follows:
- The Federal Mortgage Bank of Nigeria will send an Employer Registration Form (NHF1) to employers (FMBN).
- Employers must complete Form NHF1 and deliver it to their local Federal Mortgage Bank of Nigeria office.
- The Employer will be registered with the Federal Mortgage Bank of Nigeria and given an employer registration number.
- Employers will be given form NHF2 by the Federal Mortgage Bank of Nigeria, which employees would fill out. Alternatively, you can directly contact self-employed or individual consumers.
- The employee will complete and deliver the NHF2 form to the employer.
The employer or self-employed persons will submit the completed form NHF2 to the Federal Mortgage Bank of Nigeria.
- Employees will be registered on Form NHF2, and each employee/self-employed individual will be assigned a participation number.
- Each registered employee will receive a passbook from the Federal Mortgage Bank, in which the employer will record the monthly deduction of his or her 2.5 per cent basic income.
- Contributions will be deducted at the source by the employer. They will then submit such deductions/contributions to Nigeria’s Federal Mortgage Bank. It will be accompanied by a payment schedule that details the amount each employee contributed as well as the quantity of time covered
- Self–employed individuals’ contributions will be remitted to FMBN on a monthly basis.
- Contributions will be accepted and payment receipts will be issued by the Federal Mortgage Bank of Nigeria.
What is the maximum amount you can apply for?
You may be eligible for a maximum loan of N15 million, or as the bank may advise. However, no one should be given credit for more than 90% of the value of the mortgaged property.
How can I get in touch with Nigeria’s Federal Mortgage Bank?
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