My Experience with Securing a Federal Mortgage bank Loan/Grant for Housing.
I have always heard about Mortgage, and I assumed it was abroad people’s thing.
Then we were taught in school that you can help your architecture clients raise funding for their building projects.
I went to do my own research.
I visited the Federal Mortgage bank to understand how it works.
When I got there, I gathered that you have to create an account with all the usual KYC details (picture passport, utility bills, guarantor, etc).
You are also required to submit information about your workplace because the account is funded from your 2.5% of your NHF scheme.
That is 2.5% of your basic salary monthly.
NHF means National Housing Fund.
So, every month, say, you are earning 100,000 naira monthly, you will be sending 2,500 naira monthly.
I don’t understand how they do it for private sectors, because you are not supposed to be the one sending the money yourself. Your employer is supposed to withhold it and send to the mortgage bank, then it will reflect in your account. Just like the way taxes are paid.
Your account will be active for a minimum of 1 year before you can start accessing funds/loans.
Now, when you want to access funding for your building project, you will go to the Mortgage bank and fill the necessary forms for a housing loan.
They will check your account and see if you are eligible for the amount you are requesting for and then calculate it to see if you will be able to pay off the loan you are requesting for by the time you turn 60 years old. Interest is calculated as required.
At 60, you are not eligible to operate a Mortgage account anymore, and if you have been contributing to the account all your work life till 60 years old and you never accessed any loans, you are now eligible to take your whole money and go.
They said it also serves as part of your retirement plan.
Now here is the catch.
It seems, they are not really paying out that money to seniors who have clocked 60 years or retired.
While I was there, I had finished discussing with the people in the inner office and I came out to the reception, chitchatting with the receptionist, a senior lady walked in and heard the receptionist responding to my questions.
She immediately deduced that I was asking about mortgage, and she started shouting, “You people said you will pay me my balance and you haven’t done that till today. I’m over 60 years old and I have nothing to show for my service.”
I was shocked. I looked at the receptionist and she was avoiding eye contact. They just told me in the inner office that they pay. She stopped responding to me.
I went back to my house.
Later that day, I called another senior citizen, who I know is over 60 years and also was in the public sector service if they have received their Mortgage balance and the reply was a resounding NO.
Perhaps, that might be the reason why young people are not contributing to the scheme or why the scheme being a compulsory contribution for employers was recently made an optional thing.
That amendment for optional contribution was made for the private sector. You can read it here.
On March 24, 2023, the Director General of the Nigeria Employers’ Consultative Association (NECA)1 issued a circular to all member-companies, titled, “Amendment of the National Housing Fund Act and Contribution into the National Housing Fund (NHF)” (the “Circular”). The Circular was issued sequel to the signing of the Business Facilitation Act (BFA) 2022 by President Muhammadu Buhari in February 2023. The Circular seeks to implement the amendments of the BFA to the National Housing Fund Act 1992, particularly with reference to the regulation of contributions made to the NHF by private sector employers of labour in Nigeria.
So, are there true beneficiaries of this scheme or is it a paper thing?
If you know someone who has benefitted, let me know.
