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Union homes

National Housing Fund Scheme (NHF) National Housing fund (NHF) is a Federal Government introduced scheme, to which all public servants and employees in the organised private sector within the country are expected to contribute 2.5% of their monthly salary to Federal Mortgage Bank of Nigeria, managers of the fund. Employees of various corporations who are active contributors to the scheme, can access the fund through Union Homes Savings and Loans Plc. Maximum of # 5 million at the rate of 6% interest repayable over a period of 30 years is obtainable under this scheme Requirements For National Housing Fund (NHF) Loan Scheme Account relationship with Union Homes Be a contributor to the fund for at least six months Have satisfactory evidence of regular flow of income to guarantee the loan Apply on a prescribed mortgage loan application form Submit photocopies of valid title documents (Cof O) Approved survey/site plans Approved building plans Letter of consent to mortgage to Union Homes Saving and Loans Limited Priced bill of Quantities where applicable Valuation report prepared by a firm of registered surveyors and valuers where applicablee Offer letter / Acceptance and Allocation letter (In case of Governments projects) In case of registered self employed, he/she must submit a copy of Articles and Memorandum of Association, and a copy of Articles and Memorandum of Association, and a copy of Certificate of Incorporation evidencing his/her employment status.

Accord savings
THE NATIONAL HOUSING FUND
Introduction: Basic things to know about National Housing Funds (NHF) Who can apply How to apply How much to apply for Other things to note We are a primary Mortgage Institution of repute established to meet housing needs of individuals and corporate organizations.

BASIC THINGS TO KNOW ABOUT NATIONAL HOUSING FUNDS (NHF)


INTRODUCTION: Housing, the world over has been identified as a social necessity alongside feeding and clothing. The provision of these amenities is the primary responsibility of the government of any nation at a given period of time. This of course is not directly, but by putting in place the necessary machinery that will facilitate the availability of these amenities to individuals. This pre- supposes that the government that is unable to discharge its responsibility in this regard can be said to have failed. Coming to the realization of the importance of housing to its teeming population growing at geometrical progression over the years, successive governments in Nigeria, right from the Military era have at one time or the other instituted programmes tailored towards home ownership for virtually all Nigerians. That is why today, we have Housing Corporations at Federal and State levels, housing estates constructed by the government, both for outright sale and in some cases for letting to individual at affordable prices. In addition to this, private property development and construction companies were encouraged to spring up all in a bid for the government to achieve its aspiration of housing for all. Still poised to meeting the desires of Nigerians, the government realized that given the opportunity, people would house themselves; all the government needed to do was to provide the enabling environment for many people to build, buy or improve the houses they can afford. The ability of majority of Nigerians to do this on their own is being hindered by: Their relatively low incomes in comparison with house prices, Lack of long term funds required to match the duration of mortgage loans if they have to resort to loans at all. This further prompted the promulgation of Decree No. 53 establishing the two- tiered structure and introduced private investors into the housing finance industry. Few years later, the National Housing Fund Decree No. 3 of 1992 raised the hope of a vibrant mortgage sector with the establishment of National Housing Fund. The rationale for the establishment of the fund is to enable every Nigerian have access to decent and affordable housing. The policy recognizes the need for substantial funding base devoid of uncertainties of reliance as in the past, on government patronage. The crux is the creation of the two tier institutional structure for the housing finance system and establishment of a mandatory contributory/savings scheme, proceeds of which are to be utilized exclusively for the origination of housing loans at an affordable rate of interest. The essence is to have a pool of funds from where every

Nigerian would have access to tap to realize his dream of becoming a house owner. It is a source of long term funds required to match the normal duration associated with mortgage loans. Thus, it is an avenue to inject low-cost loanable funds into the system on a continuous basis.

WHAT YOU NEED TO KNOW ABOUT NHF


a) WHO CAN APPLY Any Nigerian above the age of 21 You must be a contributor to the National Housing Funds for a period of not less than six (6) months. For individual borrowers there must be satisfactory evidence of regular flow of income to guarantee loan repayment. This condition is easy to ascertain for applicants in paid/salary employment. For the people in private/trading businesses, there might be need to resort to their bank statements of account. b) INSTITUTIONAL BORROWERS Such as real estate developers or construction companies involved in direct housing construction. Hitherto, beneficiaries were limited to individuals but has recently been extended to this category since either way the goal is to produce mass housing. c) PURPOSE The loan shall be for the purpose of building, purchasing or renovating residential accommodation. No loan shall be for refinancing. d) 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 Institution (PMI) of their choice and not directly to the FMBN. Loan applications are also to be obtained from the same PMI e) SECURITY FOR THE LOAN The property (residential accommodation) for which the loan is sought shall serve as security for the loan. The property must have valid title documents (C of O; R of O or letter of allocation if government project, Deed of sublease, Deed of Assignment). The property shall conform with the existing planning laws and regulations (approved building plans). The mortgage property must possess sufficient value to recover the loan. The mortgage property must be insured against hazards. Applicant must accept to take up both Fire Insurance Policy and Mortgage Protection Policy. The loan shall be secured by first legal mortgage between the applicant and the PMI. f) HOW MUCH TO APPLY FOR An individual borrower is entitled to a maximum amount of N5, 000,000:00 No individual shall be granted a loan in excess of 90% of the cost or value of the property to be mortgaged. g) OTHER THINGS TO NOTE The House Ownership Account has to be operated for a specified period. This varies from one PMI to another. Usually it ranges between 6 12months. It will

afford the PMI the opportunity of having a record of customers savings pattern. Repayment figure should not exceed one third (1/3) of total net income on a monthly basis. Except in cases of outright purchase of property, disbursement is made in installments and in relation to the stages of development

Issues
National Housing Fund Yes, you have the National Housing Fund, which is being kept by the Federal Mortgage Bank of Nigeria, but the point is that if I am going to access fund from the Federal Mortgage Bank, one of the conditions before having the fund is that you should have a local bank guarantee. So, we are going back. If I ask for a bank guarantee from my local bank, there are some charges that I have to pay and this will be added to the interest on the Federal Mortgage Bank loan. Sincerely speaking, we have a lot of fund in that account. And what we are looking at is if the government can allow contributors to access the fund through the Primary Mortgage Institutions. But there is a limit, N5 million per contributor. What can N5 million do now as the contributor has to buy land for about a million? Can N4 million do whatever he wants to do on that land? And there are certain things you have to provide before accessing that loan. You need to have your land. In fact, you have to provide its Certificate of Occupancy (C of O) and certain other things. The only thing is that if they can use the housing corporations of all the states, that is, for them to approach the Primary Mortgage Insitutions, because the problem has been who to guarantee the custumer or contributor. Is it the employer or the housing corporation? When the scheme was set up the aim was that if we have really gone through the objectives, I think housing problems would have been ended in this country. The fund is there, but we are not utilising the fund as it were. If you have may be N14 billion of NHF in an account, that N14 billion will develop a lot of estates in the coutnry, which the government can now subsidize to ensure low, medium and high-income houses. Building an estate We are developers. If I am building a low-income estate, I have to sell it. If a Primary Mortgage Insitution comes to buy, we will sell it to the PMI, which will now do a mortgage for its contributors, but the mortgage institution has to pay for this. And if you look at the primary mortgage institutions operating now except for a few of them, for instance, Union Homes, which has a very strong back-up from Union Bank that made them to have some relatively cheap source of fund to utilise. If you go further and check another primary mortgage institutions, they dont have that kind of cushion-effect that Union Homes enjoys. So, Union Homes is in the fore-front because it has a lot of funds to play with. Now, the other primary mortgage

institutions have to go to the Federal Mortgage Bank of Nigeria (FMBN) to access the NHF, but the conditionalities in accessing the fund is a problem. They have to provide the names of the people they are bringing to access the fund, they have to provide certain documents and you have to be a contributor for certain period before you can access the fund. So, we have a lot of people who have contributed to the fund but have not gained anything from it. It is quite unfortunate.

4. LINGERING PROBLEMS OF MORTGAGE FINANCING IN NIGERIA The statistics given above is worrisome and underscores the existence of some lingering problems, which constrained adequate and efficient credit delivery to the housing sector. They include the following: Low Interest Rate on National Housing Fund The low interest rate level stipulated by law on investment on NHF makes the banks and insurance companies reluctant to invest in the Fund especially, as there are some more profitable investment avenues. Low Level of Participation in the NHF The number of contributors to the NHF has been relatively small compared with the national work force. There are about 9 million workers who are yet to be registered and are therefore not making any contributions. There are also alleged cases of diversion of workers contributions to the fund by employers to other investment purposes. Macroeconomic environment

The hitherto high inflation rate negatively affected the macroeconomic environment. There is need to continue to keep the rate of inflation moderate as high inflation 16 rate and structural bottlenecks in the economy do not encourage contribution toward the fund. Non-Vibrancy of some PMIs The loss of focus by some PMIs in favour of non-core activities such as trading as well as the slow disbursement of NHF to the PMIs, made some of them to be competing with the banks in sourcing for funds for purposes other than mortgage financing. Cumbersome Legal Regulatory Framework for Land Acquisition The existence of a cumbersome process of title documentation of land ownership which is reinforced by inadequate cadastral system makes mortgage financing very difficult. This has been seen as one of the factors responsible for slow disbursement of NHF. The Structure of Bank Deposit Liabilities This is preponderantly short term, therefore, the deposit money banks tend to avoid fund mismatch i.e. borrowing short but lending long, which is required in mortgage financing. The key issue that emerges therefore revolves around how to ensure adequate long term lending by financial institutions rather than the current short term

lending practice. This requires significant intermediation 17 efforts, especially, since housing finance is very sensitive to inflationary environment. Another related issue is the inability of the financial institutions to mobilize resources effectively for low-income housing. 5. THE WAY FORWARD The financing of national housing programmes should be viewed primarily as a national responsibility. The private sector should be encouraged to provide the bulk of actual investment funds for housing middle income and upper income groups. For the low income group, however, continued public support, individual initiative and labour movement involvement, will be required for housing and community development. Empirical evidence shows that private sector participation in housing is the most assured way to induce stability in the market. Indeed, the role of Government should emphasize creating an enabling environment to stimulate private sector participation in long-term housing finance. This includes provision of physical infrastructure, enhancing the soundness and competitiveness of mortgage finance institutions and developing property rights. The housing fund contribution should be integrated into the personal income taxation system such that a defined 18 proportion of taxes paid are allocated to the housing fund

pool, as it is done in Singapore. There is need for constant re- engineering of the capital and money markets in order to cope with the renewed challenges of provision of some mortgage financing. In this regard, the restructuring and strengthening of the FMBN becomes imperative for it to remain a viable financial institution with the capacity to enhance efficient housing finance development in Nigeria. Cooperative and savings and credit institutions are complementary organizations in the housing sector. Savings and loan investment funds may be better able to serve low-income families if they are channelled through cooperatives. Infact, the cooperative societies may be necessary to encourage savings and loan associations to finance genuine low-income housing, since it enables small individual savings to be pooled into a collective mortgage. This complimentary roles should therefore be encouraged. In addition to funds through regular budgetary and fiscal programmes, there is need to put in place other measures to boost available investible funds in this sector. This may include the introduction of special purpose bonds 19 designed to attract institutional investors, firms and individuals to participate. New sources should be explored through the development

of a variety of instruments for the mobilization of fund from the capital market. This include, the large-scale securitization of mortgage portfolios, a mechanism that has remained the primary engine of growth in the housing finance systems of the United States, Germany, France and Italy to name only a few. For example, the National Housing Fund in South Korea thrives on, not only the deposit subscriptions, but also housing bonds issued by the Housing Bank to finance housing development programmes. Therefore, broadening the capital market to encourage sales and exchange of housing-related securities, i.e. housing bonds, mortgages, loan participations and certificates, can generate additional leverage. This is an important means to attract short or medium-term investment fund into the sector. There is need to continue with sound economic and monetary policies to overcome the negative effect of inflation on housing and other construction finance, which require long-term credit in the country. This is because high and persistent inflation erodes the real value 20 of money and is a major obstacle to the extension of longterm credit. Conclusion I have in this paper tried to present an overview of mortgage financing in Nigeria and highlighted the challenges and problems to be addressed in order to boost

the flow of funds into the housing sector. On its part, the Central Bank will continue to evolve policies that would ensure steady flow of financial resources to the mortgage finance sector. The Bank will also increase its surveillance and supervisory activities on the mortgage institutions to ensure their orderly growth and development. Happily, the issue of distress in the sector is being nipped in the bud. It is my belief that given the positive response from the generality of the people as well as cooperation from all stakeholders, the problem of inadequate funding of the housing sector will soon be overcome. I thank you for your patience. Chief (Dr.) J. O. Sanusi, CON Governor Central Bank of Nigeria January 29, 200

Summary
Accessing a Residential Mortgage Loan in Nigeria
Housing in Nigeria has progressed from the time when all you needed to do was prepare great bowls of pounded yam and copious amounts of palm wine, then invite your friends and relatives around for a building fest. The land was free and family owned; the raw materials mud, sticks, and palmfronds freely available, and the time factor was not crucial. Nobody needed to borrow to own a home. The idea of a mortgage was non-existent.

The situation is of course very different now. Many more people live in urban areas having no connection to the land, yet they must live somewhere. Irrespective of the challenge of home ownership for all, and the problems that those desperate to satisfy that desire have wrought on us (think subprime mortgage) it is better to own your home than to rent one.

National Housing Fund Mortgage Loan


The Nigerian Government realising that a lack of housing was the cause of a lot of social unrest, not to mention corruption of public officials, has upgraded and revised the provisions of the Federal Mortgage bank. Previously, the maximum amount obtainable under the National Housing Fund NHF was N5 million -- it has been upgraded to N 15million. The question remains, how do you access the Fund. Tips on obtaining the NHF Loan in Nigeria One The provisions of the act allow that you can use the money either to buy a house, refurbish a house, or build on land you already own. In reality, it is easiest to obtain the loan to buy a finished house. At the back of the minds of the loan givers is the propensity of Nigerians to party combined with the uncertain prevailing socio-political and financial situation. If you must borrow to build, then get a bill of quantities and an approved plan in addition to the Certificate of Occupancy ( C of O) ready before applying for the loan. Most importantly, have them done by a professional not Papa Ujus neighbour. Two Apply to buy a new property in a purpose built residential estate in a major city. It is easier for the bankers to ascertain the value of the property. Think of it, if you default on a loan on a property on your grandfathers plot of land on the outskirts of Afikpo, who is going to brave bad roads, mountains, and cutlass bearing youth to repossess it? If they manage evict you, who will have the guts to brave your family gods and live there?

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FHA HUD Mortgage Home Loan Requirements, Guidelines and Limits First Time Home Buyer Loans Essential Glossary Buying a Home FHA vs. Conventional Loan
Three You can only borrow an amount if the monthly payment after loan amortization is less that 30% of your monthly income. So dont be too ambitious, or you wont get the loan. Make use of an amortization calculator to see what the monthly mortgage payments will be -- the interest is at a modest for Nigeria rate of 6%. The maximum time allowed for repayment is 60 years (national retirement age) minus your age at next birthday. Four The NHF mortgage can only be accessed by subscribers to the National Housing Fund. That is the Law. As a new employee, or better still during the job interview find out if the organisation is an NHF subscriber since it is only mandatory for public officials. Five The NHF cannot be accessed without processing the mortgage through a primary mortgage provider. If you are buying in an established estate, there will be a primary mortgage provider attached to it. Alternatively, all registered mortgage banks are primary mortgage providers. Finally, the world has moved far away from mudhuts constructed by free labour with basic building materials. If you need a house in Nigeria, sign up as an NHF subscriber, locate a property, put your documents together, and approach the National Mortgage Bank through a primary mortgage provider and you will have a mortgage loan at the best possible rate available in Nigeria.

LIST
List Of Financial Institutions Primary Mortgage Institution
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 ABBEY BUILDING SOCIETY LIMITED ACCESS HOMES & MORTGAGES LIMITED ACCLAIM HOME SAVINGS & LOANS LTD ACCORD SAVINGS & LOANS LTD ADAMAWA SAVINGS & LOANS LIMITED AG HOMES SAVINGS & LOANS LIMITED AKWA SAVINGS & LOANS LIMITED ALLWELL SAVINGS & LOANS LIMITED AMEX SAVINGS & LOANS LIMITED ANAMBRA HOME OWNERSHIP CO. LIMITED. ASO SAVING & LOANS PLC BENHOUSE BUILDING SOCIETY LIMITED CENTAGE SAVINGS & LOANS LIMITED CITIHOMES SAVINGS & LOANS LIMITED CITY CODE SAVINGS & LOANS LIMITED CONFLUENCE SAVINGS & LOANS LIMITED CONSOLIDATED ESTATE BUILDING SOCIETY COOP SAVING & LOANS LIMITED CORNERSTONE BUILDING SOCIETY LIMITED CREDENCE SAVINGS & LOANS LIMITED CYMON SAVINGS & LOANS LIMITED DALA BUILDING SOCIETY LIMITED DELTA BUILDING SOCIETY LTD DIAMOND BUILDING SOCIETY LIMITED ESTAPORT BUILDING SOCIETY LIMITED EURO - BANC SAVINGS & LOANS LIMITED FBN MORTGAGES LIMITED FHA HOMES SAVINGS & LOANS LTD. FIRST AMALGAMATED BUILDING BUILDING SOCIETY LTD. FIRST CAPITAL SAVINGS & LOANS LIMITED FIRST GENERATION HOMES (SAVINGS & LOANS) LIMITED FOKAS SAVINGS & LOANS LTD. FUTUREVIEW MORTGAGES LIMITED GATEWAY SAVINGS & LOANS LIMITED GLOBAL TRUST SAVINGS & LOANS LTD. GT HOMES LIMITED GUARDIAN TRUST SAVINGS & LOANS LIMITED HAGGAI SAVINGS AND LOANS LIMITED HALLMARK HOMES SAVINGS & LOANS LTD HARVARD TRUST SAVINGS & LOANS LTD. HOME FOUNDATION SAVINGS & LOANS LTD. HOME TRUST SAVINGS & LOANS LIMITED HOMEBASE MORTGAGE LIMITED HORIZON BUILDING SOCIETY LTD. IMANI SAVINGS & LOANS LTD. INFINITY TRUST SAVINGS & LOANS LIMITED INTEGRATED HOMES SAVINGS & LOANS LIMITED

48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101

INTERCONTINENTAL HOMES LIMITED JIGAWA SAVINGS & LOANS LIMITED JUBILEE-LIFE SAVINGS & LOANS LIMITED JUBILLEE BUILDING SOCIETY KEBBI STATE HOME SAVINGS & LOANS LTD. KOGI STATE SAVINGS & LOANS LTD. LAGOON HOMES SAVINGS LOANS LTD. LAGOS BUILDING & INVESTMENT COMPANY LIMITED LEVERAGE HOME SAVINGS & LOANS LTD LIVINGSPRING SAVINGS & LOANS LTD. MAGNET SAVINGS & LOANS LIMITED MAYFRESH SAVINGS & LOANS LIMITED METRO MORTGAGES LIMITED MIDLAND MORTGAGES LIMITED MORTGAGE GUARANTY SAVINGS & LOANS LIMITED MORTGAGES PHB LIMITED MULTIBANC SAVINGS & LOANS LTD MUSTARD SEED MORTGAGE LIMITED MUTUAL ALLIANCE SAVING & LOANS LIMITED NEW CAPITAL SAVINGS & LOANS LIMITED NEW PRUDENTIAL BUILDING SOCIETY LIMITED OASIS SAVINGS & LOANS LIMITED OCEANIC HOMES (SAVINGS & LOANS) LIMITED OMEGA SAVINGS & LOANS LIMITED OWNERS HOME SAVINGS & LOANS LIMITED PACIFIC SAVINGS & LOANS LIMITED PASSWORD SAVINGS & LOANS LIMITED PEAK SAVINGS & LOANS LIMITED PERSONAL TRUST SAVINGS & LOANS LIMITED PLATINUM SAVINGS & LAONS LIMITED POST SERVICE SAVINGS & LOANS LIMITED REFUGE HOME SAVINGS & LOANS LIMITED RESORT SAVINGS & LOANS LIMITED ROYAL SAVINGS & LOANS LIMITED SAFE TRUST SAVINGS & LOANS LIMITED SAKKWATO SAVINGS & LOANS LIMITED SKYE BUILDING SOCIETY LIMITED SKYFIELD SAVINGS & LOANS LIMITED SOLID TRUST SAVINGS & LOANS LIMITED SPRING MORTGAGE LIMITED STALLION HOME SAVINGS & LOANS LIMITED STB BUILDING SOCIETY LIMITED SUBURBAN TRUST SAVINGS & LOANS LIMITED SUNTRUST SAVINGS & LOANS LIMITED SUPREME SAVINGS & LOANS LIMITED TARABA SAVINGS & LOANS LIMITED TMC SAVINGS & LOANS LIMITED TRANS ATLANTIC MORTGAGES LIMITED TRINITY SAVINGS & LOANS LIMITED UNION HOME SAVINGS & LOANS LIMITED UNITED MORTGAGE LIMITED WEMA SAVINGS & LOANS LIMITED YANKARI SAVINGS & LOANS LIMITED YOBE STATE SAVINGS & LOANS LIMITED

Act
National Housing Fund Act
1. Establishment of the National Housing Fund (1) There is hereby established a fund to be known as the national housing fund (in this act referred to as the fund). (2) All contributions and other moneys required or prescribed by this Act Shall be paid into the fund. 2. Aims and objective of the fund. The aim and objective of the fund shall be a) Facilitate the mobilization of the fund for the provision of houses for Nigerians at affordable prices. b) Ensure the constant supply of loan to Nigerians for the purpose of building, purchasing and improving of residential houses. c) Providing incentive for the capital market to invest in property development. d) Encourage the development of specific programs that would ensure effective financing of housing development, in particular low cost housing for low income workers, e) Provide proper policy control over the allocation of resources and fund between the housing sector and other sectors of the Nigerian economy and f) Provide long term loan to mortgage institutions for on-lending to contributions to the fund. 3. Resources of the fund. The resources of the fund shall consist of the following; that is a) Contributions by Nigerians both the public and private sectors. b) Investment in fund by commercial and merchant banks; c) Investment in the fund by insurance companies registered under the insurance act; (Cap 117) d) Financial contributions by the Federal Government for long-term loans. 4. Contribution by Nigerian workers. a) A Nigerian worker that earns N3,000 and above per annum in both the public and the private sectors of the economy shall contribute 2.5 percent of his basic monthly salary to the fund. b) An interest rate of 4 percent shall be payable on the contributions made subsection (1) of this section. 5. Contributions by banks e t c.

1) Every commercial or merchant bank shall invest in the fund 10 percent of its loan and advances at an interest rate of 1 percent above the interest payable on current account by banks. 2) Every registered insurance company shall invest a minimum of 20 percent of its non life funds and 40 percent of its life fund in real property development of which not less than 50 percent shall be paid into the fund through the mortgage bank of Nigeria (in this act referred as the bank) at an interest rate not exceeding 4 percent. 3) Nothing contained in the insurance act or relating to investment of insurance companies in real property shall affect the provision of this act (1991 no 58.) 6. Contributions by the Federal Government. I. The Federal Government shall make adequate financial contribution to the fund for the purpose of granting of long term loans and advance for housing development in Nigeria. II. The Federal Government may also make such other sums either in naira or foreign currency to the fund as it may deem necessary. 7. Management of the fund e t c 1) The fund shall be managed and administered by the bank. 2) The bank shall ensure that a) the proceeds from the fund are utilized to finance the housing sector of the economy through wholesale mortgage lending to primary mortgage institution; b) the aim ,objectives and functions of the fund are effectively carried out by the bank and mortgage institutions. 8. Utilization of loan by mortgage institutions. A mortgage institution that is registered under the mortgage institutions act (in this act referred as mortgage institution) shall utilize proceed from the fund to finance mortgage lending in accordance with the provision of this Act and the mortgage institution act. (Cap. M 19.) 9. Deductions by employers from monthly salary workers.

(1) An employer who has in his employment an employee earning a basic salary of N3.00 and above per annum shall deduct 2.5 percent of the monthly salary of that employees contribution to the fund. (2) The amount deducted pursuant to subsection (1) of this section shall be remitted to the bank within one month of the making of the deduction. 10. Participation in the fund by self employed person. A self employed person shall deduct from their monthly incomes the amount stipulated in section (1) of this act and within one month same to the bank. 11. Duty of the central bank of Nigeria to col ect contribution from banks. (1) The central bank of Nigeria shall collect commercial and merchant banks the end of every year and not later than month thereafter, the percentage of their contribution the fund as specified in section 5 (1) of this Act. (2) The central bank of Nigeria shall within two month of making collection under subsection (1) of this Act pay the money to the bank for investment in fund. 12. Determination of amount due from insurance companies. (1) The bank shall at the end of every year after careful examination of the audited annual account of each insurance company, determine the amount due from the insurance company and shall issue a demand notice for the amount due from the insurance company for the purpose of investment in the fund. (2) The insurance company shall on the receipt of a demand notice from the bank pay the amount within one month of the demand into the fund. (3) Failure by any insurance company to pay the bank any amount due under subsection (2) of this section shall be regarded as a contravention of this Act and shall constitute one of ground by which the commissioner for insurance may cancel the registration of insurance company in default. 13. Bank to pay the money receive into the fund. All monies received by the bank under this act shall be credited to the fund immediately on receipt. 14. Beneficiaries under the fun. (1) A mortgage institution duly licensed under the mortgage institutions Act shall qualified for loan from the fund, on such term and conditions as the minister may, from time to time, by regulations published in the gazette specify. (Cap M 19.)

(2) Any loan obtained by a mortgage institution under subsection (1) of this section shall be made available to the contributors wishing to build, purchase or renovate houses. (3) The minister may by regulations published in the gazette specified the manner in which and the conditions and the terms of repayment of any loan obtained pursuant to subsection (2) of this section. 15. Security for fund facilities. (1) Any loan obtain from a mortgage institution shall be secured by the first mortgage. (2) Any loan granted by the bank to a mortgage institution shall be secured by a block of existing mortgages under cover of sale and administration agreement to be executed between the bank and mortgage institution. (3) The sale and administration agreement referred to in subsection (2) of this section shall be registered in the land registry along with the deed of assignment of mortgages to which the agreement relate. 16. Interest rate. (1) The loan made by bank shall be interest rates slightly lower than the prevailing commercial rates in Nigeria. (2) The interest rate for each loan shall be fixed for the duration of the loan. (3) The bank shall charge the mortgage institution not more than one percent point above its borrowing point. (4) Mortgage institution shall be allow a minimum of spread of four percent point above the rate charged be the bank. 17. Refund to a contributor after retired from the office e t c. Any contributor who has not obtained a house loan from the bank and has(a) attained the age of 60 years; or (b) Retired from his employment and becomes incapable of continuing the contribution to the fund as specified in this act. 18. Inspection The bank shall have a right to access at all reasonable time to of ice, books of account and documents relating to deduction made in accordance with this Act by any employer or information for the purpose of this Act. 19. Rendering of accounts. (1) the bank shall render a periodic account on the found to the Central Bank of Nigeria in such form as the minister may direct.

(2) The bank shall render annual return to all contributors showing other things, total contributions accrued interests and balance to date. (3) A mortgage institution which has obtained a loan from the bank shall render to bank in such form and manner as the minister may, from time to time, specify. 20. Offence and penalty for the failure by an employer to deduct or pay deductions. (1) an employer who _ (a) fails to make deduction from the basic salary of his employees as required by this Act; or (b) deduct any sum of money from basic salary of his employees for the purpose of the fund and fail to remit the money so deducted to the bank is guilty of an offence under this Act. (2) a person guilty of an offence under subsection (1) of this section is liable on conviction, in case of (a) a body corporate, to fine of N50,000; and (b) an individual who is a staff in the employment of an employer and who is authorized to make the imprisonment for a term of five years or to both such fine and imprisonment. (3) Self employed people who fail to make deduction or deducts and fail remit to the bank any money due to the fund is guilty of an offence under this Act and liable on conviction of a fine of one year or to both fine and imprisonment. (4) A person who prevents or obstructs the deduction or remittance of the contribution due to the bank under this act is guilty of an offence and is liable on conviction of fine of N5000 or to imprisonment for a term of one year or to both such fine and imprisonment. (5) The institutions of proceeding or imposition of a penalty under this section shall not relieve any employer or self employed person from liability to pay to the bank the deducted by him for the purpose of the fund. 21. Offence of making a false statements or misrepresentation, etc. A person who for the purpose of evading payment of obtaining any benefit for himself or some other under person under the fund knowingly makes _ (a) Any false statement; or_ (b) Misrepresentation ; or _

(c) Produce or furnishes any document or information which he knows to be false in any material particular, is guilty of an offence under this act and liable for the conviction to a fine of N10, 000 or to imprisonment. 22. Failure to produce document. A person who fails to produce any document for inspection under this act is guilty of an offence and liable on conviction in the case of _ (a) A body corporate, to fine of N50, 000. (b) an individual to a fine of N 50,000 or imprisonment for the term of one year or to both such fine and imprisonment. 23. Exemption from payment of income tax. The fund and the refund of any contribution made under this act shall be exempted from payment of income tax. 23. Jurisdiction. The Federal high court shall have jurisdiction to try all offence under this Act.

ACCORD
Mortgage Loans in Nigeria: How to Access NHF Loans
Posted on | April 13, 2011 | Comments (0) To access the National Housing Fund (NHF) mortgage loans in Nigeria, you need to be registered with the NHF and open a National Housing Fund Loan Account. This can be done directly via your employer or through a primary mortgage lender. Your loan application has to be through a registered and duly accredited Primary Mortgage Institution (PMI) The NHF scheme is for Nigerians in all sectors of the economy, particularly those within the low and medium income levels who cannot afford commercial housing loans e.g civil servants, traders, artisans, commercial drivers etc The National Housing Fund (NHF) scheme was established by Decree 2 of 1992 for workers to contribute 2.5% of their basic salary into the fund to be used to grant mortgage loans to them at very concessionary terms for the purchase, building, expansion or renovation of their houses. The maximum loan accessible by any contributor has now been raised to N15 million, but for the individual, the maximum you can access is based on your ability to pay back in 30 years. The lending rate is 6% per annum. Repayment period is 30 years maximum subject

to the applicants present age. Maximum repayment period is determined by deducting the applicants present age from 60. 1. Land ownership with transferable title. ( Original for sighting and a copy) Note: Allocation paper is not acceptable. You cannot obtain NHF loan to buy land. 2. Be a contributor to NHF for at least the past six (6) months. 3. Open a Home Ownership Account and build up 10% equity contribution to the funding of the project. 4. Submit handwritten application (original and 2 copies). 5. Four passport photographs endorsed at reverse sides. 6. Duly completed NHF loan application form/statement of income. 7. Approved Survey Plan. 8. Approved Building Plan (Original and 2 copies). 9. Priced Bill of Quantities from Quality Surveyor for new construction and estimate of works to complete the house for a building under construction. 10. Valuation report from qualified Estate Surveyor ( for existing structures, to be accompanied by photographs of the house. 11. Offer letter (for purchase of existing building), where allocation paper/form is given, it shall only serve as evidence of offer and not a title document 12. In case of outright purchase an undertaking from the vendor to convey necessary title upon full payment. Note: The payment of deposit can constitute your equity contribution. 13. Cash flow projection on loan repayment with evidence of steady stream of income (pay slips for past 3 months, bank statement for past 3 years and /or a letter from your employer stating your total remuneration. 14. If self employed, submit the following: - Companys Profile - Companys bank account statement for the past 3 years -Three years audited accounts of the company. 15. Marriage certificate or proof where applicable. 16. Birth certificate or age declaration 17. Payment of necessary charges e.g inspection, legal fees etc. 18. Photocopy of current tax clearance certificate (original for sighting) Theoretically, you can access the funds two weeks after submitting your application, but in practice, it may take up to 3 6 months. Having an account with NHF is a good idea if you want to access funds to build. You cannot get a similar deal with a commercial banks, whose mortgages are in the double digit interest rate regime with a typical tenure of 10 years.

Platinum

This is a follow up to my last article on real estate in Nigeria. The information is from the Mortgage help desk of Realty Point Limited supported by Platinum Savings & Loan Limited. Its a simple step on how you can use the National Housing Fund Loan Scheme to purchase or renovate a residential accommodation. What is the National Housing Fund Scheme? Its a scheme introduced by the Federal government of Nigeria to facilitate the continuous flow of low-cost funds for long term housing loan for the benefit of all Nigerians. Nigerians are expected to contribute 2.5% of their monthly salary to Federal Mortgage Bank of Nigeria. It does not matter if you are self-employed or you own your own business, trader, artisan, professional, business person, etc. Active members can get maximum of N5 million at the rate of 6% interest repayable over a period of 30 years after they have been contributing for a period of not less than one year. The pool of contributions is to give housing loan for all Nigerians at relatively low rate of interest. To have access to the loan you must be a contributor. The interest rate applicable at the time you obtain the loan will remain fixed until the loan is fully repaid. If you are not yet registered, it is required you pay in arrears of 3 years. Here are the requirements to benefit from the housing fund scheme: 1. Evidence of registration with NHF Scheme (Pass-book). 2. Income statement (pay slip for past 3 months). 3. Tax clearance certificate for the past 3 years. 4. Offer/Acceptance letter from developers/sellers after payment of personal intake (20%). 5. Title document for the proposed building. 6. Opening of account with Platinum Savings & Loan Ltd. (with a minimum of N25,0000. 7. Legal fee to FMBN at N10,000. 8. Submission of valuation report. 9. Application form from Estate Developer at N10,000. 10. Seven copies of recent passport photograph. For more information on free Mortgage advisory service Call us on mobile: 2348033205456 or send us a mail by