How To Apply For NHF Loan In Nigeria
The National Housing Fund (NHF) is a Federal Government initiative designed to provide long-term financing for Nigerian workers, banks, insurance companies, and the government itself.
The aim is to offer affordable loans at low-interest rates to contributors, helping them to buy or build their own homes.
The NHF scheme, created by Act 3 of 1992, is particularly targeted at Nigerians in various sectors of the economy, especially those with low and medium incomes who cannot afford commercial housing loans.
To participate, workers contribute 2.5% of their monthly salary to the Federal Mortgage Bank of Nigeria (FMBN), which manages the fund.
Eligibility for NHF Loan
To qualify for an NHF loan, you need to meet several criteria:
- You must be over 18 years old.
- You need to have been making contributions to the NHF for a minimum of six months.
- You need to show proof of a stable income to ensure you can repay the loan.
Plan Before You Apply
It’s crucial to plan your budget thoroughly before starting the application process. Understand how much you can realistically borrow based on your financial situation. This step is crucial because it guides you in selecting a house or building project that fits your budget.
Many people mistakenly believe they can access the maximum loan amount, but this isn’t always the case. The amount you can borrow depends on factors like your age, income, and financial status. Consider consulting with a financial advisor to get a clear picture of your borrowing capacity.
How to Apply for NHF Loan
Individual applicants wouldn’t be able to apply directly to the FMBN; they need to go through a licensed and accredited Primary Mortgage Bank (PMB) of their choosing.
Institutional borrowers, however, can apply directly to the FMBN. Here’s a step-by-step guide:
- Open a Savings Account: Start by opening a savings account with a registered PMB.
- Contribute to the Fund: Ensure you have been contributing to the NHF for at least six months.
- Show Proof of Income: Provide evidence of a regular income to guarantee loan repayment.
- Submit Required Documents: Gather and submit photocopies of valid title documents (e.g., Certificate of Occupancy), approved survey and site plans, approved building plans, and a priced bill of quantities if applicable.
- Provide a Valuation Report: A registered firm of surveyors and valuers should prepare a valuation report if required.
- Tax Clearance Certificate: Present a tax clearance certificate for the past three years.
- Consent Letter: Submit a letter granting permission to use your property as collateral with your selected PMB.
- Complete the Application Form: Fill out the prescribed mortgage loan application form.
- Evidence of NHF Participation: Show proof of your NHF contributions.
- Pay Slips: Submit copies of your payslips for the last three months.
- Equity Contribution: Depending on the loan amount, you may need to provide an equity contribution of your own money.
- Offer Letter: If you’re involved in a government project, provide an offer letter or an acceptance and allocation letter.
- Self-Employed Applicants: If you’re self-employed, submit a copy of your Articles and Memorandum of Association, and your Certificate of Incorporation to prove your employment status.
Loan Amount
You can apply for a loan up to N15 million, but the loan amount cannot exceed 90% of the property’s cost or value.
To find out how much you are eligible to borrow based on your age, income, and other factors, you can complete this form provided by the NHF.
Loan Security
The property you intend to purchase or build will serve as security for the loan. This property must have valid title documents like a Certificate of Occupancy, Deed of Sublease, Deed of Assignment, or a Letter of Allocation.
Additionally, the property should comply with local planning laws and regulations, have approved building plans, and possess sufficient value to cover the loan amount. It must also be insured against various risks.
For more information or assistance, you can visit the NHF website for questions, to stay updated on any new developments or changes in the application process. Best of luck with your NHF loan application!
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