How to Access Federal Mortgage Loans in Nigeria
How to access federal mortgage loans in Nigeria is not a rigorous process. All you need is to follow through with this article to keep abreast with everything you need to know in order to access it. However, the federal mortgage loan package includes; Home Renovation Loan, a Rent-To-Own Housing scheme, and so on. Therefore, it’s important to know your specific need for a federal mortgage loan before proceeding to get it.
As you read along with this article, you will definitely come across what you should know about Federal Mortgage Loan in Nigeria.
About Federal Mortgage Loan in Nigeria
They established the Federal Mortgage Bank of Nigeria (FMBN) in 1956 before assuming the status of the apex mortgage institution for Nigeria 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 in order to provide contributors with low-interest loans.
It is one of the FMBN’s major responsibilities. The National Housing Fund Act 3 of 1992 governs the federal mortgage bank loan in Nigeria.
They established the scheme by Act 3 of 1992. It targets Nigerians in all sectors of the economy. Typically those within the low and medium-income levels. To help people who cannot afford commercial housing loans to own houses. They would achieve this by contributing 2.5% of their monthly salary to the Federal Mortgage Bank of Nigeria, managers of the fund. You can read about Deed of Assignment
What is a Mortgage Bank?
A mortgage bank is a financial institution that specializes in mortgage loans. They can involve it in both the origination and servicing of mortgage loans. Mortgage banks lend their own money to borrowers and either collect installment payments with a fixed interest rate or sell their loans on the secondary market.
Now, we’re all square with the meanings of both Federal Mortgage Loan Nigeria and Mortgage Bank, respectively. Let’s move on to letting you see all you need to know to access it.
Who is eligible for the Federal Mortgage Loan?
Before you could stand a chance to get a loan successfully. You must be eligible to apply. In order to be eligible for a Federal Mortgage Loan in Nigeria, you should:
- You should be at least 18 years old.
- You will use NHF 1 (employer) and NHF 2 (employee) forms to register.
- Must remit the monthly contributions they deducted to FMBN promptly (which must be at least 6 months’ contributions)
- Employers must update the passbook, which is transferable from one job to the next.
- You must have made at least six (6) months of contributions to the Fund.
- To ensure loan payback, the applicant must show that he or she has a steady stream of income.
How To Apply For The Federal Mortgage Loan
It’s not news that you must apply for a loan before you get it. When you need a loan, all you have to do is go for it.
This is how you to apply for the Federal Mortgage Loan Nigeria:
- Institutional borrowers can apply directly to the Federal Mortgage Bank of Nigeria for the loan (FMBN)
- Individuals can only apply through a Primary Mortgage Bank (PMB) of their choice that is fully licensed. However, you cannot apply for the loan directly through FMBN.
- You must get the loan applications from the same Primary Mortgage Institution.
- To use the national housing fund facility, you must have registered your principal mortgage institution with FMBN.
What is the procedure for Federal Mortgage Loan registration?
The NHF Act No.3 of 1992 requires all Nigerians in employment, whether self-employed or employed, to contribute 2.5 percent of their basic salary/income to the fund.
- The Procedure for registration is:
- Employers will receive an Employer Registration Form (NHF1) from the Federal Mortgage Bank of Nigeria (FMBN).
- Employers will fill out Form NHF1 and return it to the Federal Mortgage Bank of Nigeria’s nearest branch.
- They will register the Employer with the Federal Mortgage Bank of Nigeria and assign them an employer registration number.
- The Federal Mortgage Bank of Nigeria would provide form NHF2 to employers for employees to complete. Or to self-employed or individual customers directly.
- The employee will fill out the NHF2 form and return it to the company.
- Federal Mortgage Bank of Nigeria would receive completed form NHF2 from the employer or self-employed persons.
- The FMBN will register employees on Form NHF2 and they will assign each employee/self-employed individual a participation number.
- The Federal Mortgage Bank will provide each registered employee with a passbook in which the employer will record the monthly deduction of his or her 2.5 percent basic income.
- After these, they can now consider an employee a registered participant of the National Housing Fund.
- The employer will deduct contributions at source. Thereafter, they will submit such deductions/contributions to the Federal Mortgage Bank of Nigeria. And it will go along with a payment schedule detailing the amount each employee contributed and the time covered.
- They will remit contributions from self–employed participants to FMBN on a monthly basis.
- The Federal Mortgage Bank of Nigeria will take contributions and provide payment receipts.
How Much Can You Apply For?
The Federal Mortgage Loan, like every other loan, has the maximum amount you can get. So, for this a federal mortgage loan, a borrower may be eligible for a maximum loan of N15 million. However, the borrower’s bank may advise otherwise. But they should give no one credit for over 90% of the value of the mortgaged property. You can read about Real Estate Investment
What is the interest rate on Federal Mortgage Loan Nigeria?
Every loan comes with its interest rate. However, the National Housing Fund Act regulated the interest rate for the federal mortgage loan. It is not over 6% per annum.
What is the Federal Mortgage Loan tenure?
Every loan agreement specifies when your lender expects you to pay back the debt. You can repay a federal mortgage loan over a period of up to 30 years. Individual borrowers must therefore repay their loans through the principal mortgage institution where they got them.
The Federal Mortgage Bank follows a concept that seeks groups with financial and technological capabilities that are interested in offering inexpensive mass housing to the low-income market.
How do I check my National Housing Fund monthly contribution?
It’s cool to keep abreast with your monthly contribution as a subscriber of the National Housing Fund. Besides that, you have a peace of mind when you know your contributions are right on track. Subscribers can check the status of their contributions for any month in the current calendar year. This is to check that the scheme has received your monthly donations.
The following are the ways you can check your National Housing Fund monthly donation:
- USSD Code
Most of the time, you’d want to know if they have remitted your contributions. The Federal Mortgage Bank of Nigeria introduced the USSD code. This code allows you to complete your mortgage financial transaction without having to visit a mortgage institution for verification.
The USSD CODE to use in order to carry out those transactions is *219#. From the convenience of your workplace or home, you may verify contact information, get a statement of account, access the business board, and use the mortgage calculator.
In order to check your monthly contribution, just:
- Dial *219# and send
- Type 2 and send
- Enter 1 and send
- Enter the exact month that’s 1 to 12 and send it.
Note: You can type “00” in each of the submenu to go “Back” to the previous screen. Or you can select the “Cancel” button to quit the service.
2. Mobile App
You can also check the status of your contribution to the FMBN Mobile app.
All you have to do is:
- Download the FMBN Mobile app android version from the Google play store. Or get its IOS equivalent from the App store.
- Thereafter, create an account with your information details and enjoy all transactions from your comfort zone.
Can I correct my profile details on the FMBN Mobile App or USSD platform?
Maybe you entered the wrong info in your profile and you need to edit it (on the FMBN Mobile App or USSD platform). And because of this, you would want to edit it. Just know that you cannot edit their profiles on these platforms. However, you can do so by filling out the Update Form on the FMBN website or visiting their local branch office.
How can I retrieve my National House Fund NHF number?
Having seen how you can check your National Housing Fund monthly contribution. You can also retrieve your NHF number if you have previously registered your Mobile Number with FMBN. In order to retrieve your National House Fund just:
- Dial *219# and send
- Type 3 and send
- Click the “Cancel” button to end the service.
What are the functions of Federal Mortgage Banks in Nigeria?
Federal Mortgage Banks in Nigeria have various functions to perform. They include:
- Long-term credit services to mortgage banks in Nigeria are what the Federal Mortgage Bank provides. They provide it along with rates that will allow the mortgage banks and institutions to grant loans to individuals. Typically, those who want to get their own houses.
- At the federal, state, local, and even rural levels, it stimulates and promotes the establishment and development of mortgage institutions.
- It stimulates the development of long-term secondary mortgage institutions to suit Nigerians’ housing demands.
- Licensing authority for secondary mortgage institutions in Nigeria is what the Federal Mortgage Bank of Nigeria grants.
- It oversees and controls the activities of Nigerian mortgage lenders.
- It collects and maintains the National Housing Funds under the National Housing Fund Act’s provisions.
- The Federal Mortgage Bank is also the link between the mortgage market and the capital market. Also mobilizing both local and foreign investment into the housing sector.
- To meet its objectives, the bank occasionally develops innovative mortgage-related programs and products.
What are the benefits of getting a Federal Mortgage Loan in Nigeria?
There are some benefits you can gain by getting a federal mortgage loan. They include:
- It comes with a housing loan of up to 90% of the cost of the house.
- They fix the interest on the mortgage loan at 6% p.a. throughout the life of the mortgage.
- It has a long period of repayment tenure of up to 30 years.
- Contributions can help provide greater retirement security.
- You can borrow up to N15 million.
- Refunds with 2% interest on retirement.
- The loan repayment is comparable to a regular monthly rent payment.
- A lifetime registration number, a passbook for personal contribution recording, and an account statement are what they provide for each contributor.
What are the contact details of Federal Mortgage of Nigeria?
For more inquiries about the Federal Mortgage, you can reach out to Federal Mortgage Bank through:
- Federal Mortgage Bank of Nigeria
- 266 Cadastral AO, Central Business District.
- PMB 2273 Garki, Abuja. Nigeria
- 09-2920689, 09-2920690, 09087973000, 08170237904.
I trust you’ve already known that there are several loan products for various purposes. They designed the Federal Mortgage Loan mainly for building, purchasing, or renovating residential accommodation. The Federal Mortgage Bank of Nigeria is now cooperating with mortgage institutions. Typically those with the technical and financial competence to provide affordable homes to low and middle-income earners. It rightly seems that the federal mortgage loan has got you covered to get your dream home. It’d be cool to try it out.