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How to Access Federal Mortgage Loans in Nigeria (updated)

Housing being one of the most important aspects of human life, everyone has no choice but to have a roof over their heads, so everyone needs a place to call home. In essence, the Federal Mortgage Bank of Nigeria (FMBN) was established to provide Nigerians with reliable and affordable access to homeownership through the provision of mortgage loans.  In Nigeria, getting a federal mortgage loan does not have to be a difficult process. You can read through this article to learn almost everything on how to access federal mortgage loans in Nigeria. 

Many Nigerians, however, fail to take advantage of this opportunity, despite the fact that the Federal Mortgage Bank of Nigeria makes it simple to become a property owner with the appropriate information and strategy in place. In this article, we’ll go over how to secure a Federal Mortgage Loan in Nigeria, as well as the processes and procedures involved.

Contents

Details About the Federal Mortgage Loans in Nigeria

Let us begin by understanding the definition of a mortgage loan. A mortgage loan is a type of loan that can be used to buy or refinance a home. “Mortgage loans” is another term for mortgages. 

Mortgages allow you to buy a home without having to pay it off in full right now. It is primarily given to people who want to acquire a house but don’t have the whole cost of the house available right now.

Let’s talk about Federal Mortgage Loans.

The Federal Mortgage Bank of Nigeria (FMBN) is an entity founded in 1956 with the goal of easing the burden on Nigerians through particular projects. 

In 1994, it was named Nigeria’s premier mortgage institution. It has managed and overseen the National Housing Fund, a contributing savings system (NHF), since then.

The NHF is a social savings project that intends to raise long-term funds in order to give low-interest loans to contributors. It is one of the FMBN’s primary duties. The National Housing Fund Act (1992) oversees federal mortgage bank loans in Nigeria.

The Federal Mortgage Bank of Nigeria’s major goal is to increase the availability of affordable and simple-to-acquire homeownership in Nigeria. The organisation does this primarily through long-term liquidity and the development of new products and services.

See also: Owning a Home in Nigeria Through Mortgage

The Decree

According to the Federal Government of Nigeria, multiple decrees guide the organization to guarantee that it functions in accordance with its primary aim, they include the following: 

  • Collect and administer the National Housing Fund in accordance with the provisions of the NHF Act.
  • Provide long-term loan facilities to Nigerian mortgage institutions.
  • Promote the formation and growth of sustainable primary and secondary mortgage institutions in order to meet the housing demand in Nigeria’s diverse areas.
  • Do anything and engage in any transaction that the Board believes is necessary to ensure the proper fulfillment of the FMBN Act’s functions.
  • Investing in the housing market with both domestic and international funds.
  • Link the stock market to the real estate market.
  • Establish and manage a strong secondary mortgage market.
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Who is Eligible to Apply for a Federal Home Loan?

You must be at least 18 years old and a Nigerian. They had to contribute to the National Housing Fund for six months. Applicants must also demonstrate a continuous source of income.

See also: LivingTrust Mortgage Bank posts N192 million in Q3 2020

How Do I Apply for A Federal Home Loan?

It is common knowledge that you must apply for a loan before you can receive one. When you need a loan, all you have to do is apply. The following is the method 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); however, 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.
  • Both loan applications must come from the same Primary Mortgage Institution.
  • In order to use the national housing fund service, your major mortgage institution must be registered with FMBN.

What Documents Do I Need to Apply for a Loan from the Federal Mortgage Bank of Nigeria?

The following documents are generally required:

  • The application form has been filled out.
  • Photocopied title papers
  • Current market value report for the home you want to buy or bills of quantities for the home you want to build.
  • A three-year tax clearance certificate.
  • Proof of NHF involvement
  • Pay stubs for the last three months, copied
  • An equity investment or personal ownership may be required, depending on the loan amount requested.

The Steps for Registering a Federal Mortgage loan

Under NHF Act No. 3 of 1992, all Nigerians in employment, whether self-employed or employed, are required to contribute 2.5 percent of their basic salary/income to the fund.

Here is a simplified version of the registration procedure for Nigeria’s Federal Mortgage Bank;

To register with the Federal Mortgage Bank of Nigeria (FMBN), please follow these steps:

  1. The FMBN will send an Employer Registration Form (NHF1) to employers.
  2. Employers need to fill out the NHF1 form and submit it to their local FMBN office.
  3. Once submitted, the employer will be registered with the FMBN and given an employer registration number.
  4. The FMBN will provide employers with the NHF2 form, which employees can fill out. Alternatively, individuals who are self-employed can also contact the FMBN directly.
  5. Employees should complete the NHF2 form and submit it to their employer.
  6. The employer or self-employed individuals will then send the completed NHF2 forms to the FMBN.
  7. The FMBN will register each employee on the NHF2 form and assign them a participation number.
  8. Each registered employee will receive a passbook from the FMBN, where the employer will record the monthly deduction of 2.5% from their basic income.
  9. Employers will deduct the contributions at the source and submit them, along with a payment schedule detailing the amount contributed by each employee and the time period covered, to the FMBN.
  10. Self-employed individuals are required to remit their contributions to the FMBN on a monthly basis.
  11. The FMBN will accept the contributions and issue payment receipts.
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Contact Details

If you have any further questions or need to contact the Federal Mortgage Bank of Nigeria, you can use the following methods:

Address: Federal Mortgage Bank of Nigeria. 266 Cadastral AO, Central Business District, PMB 2273 Garki, Abuja, Nigeria

Phone Number(s): 0902920689, 0902920690, 09087973000, 08170237904.

Email Address: [email protected]

FAQS

How Much Can You Apply For?

The Federal Mortgage Loan, like every other loan, has the maximum amount you can get. So, for this 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 an 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 is cool to keep abreast with your monthly contribution as a subscriber of the National Housing Fund. Besides that, you have 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:

  1. 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 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.
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2. Mobile App. You can also check the status of your contribution to the FMBN Mobile app.

All you have to do is:

  1. Download the FMBN Mobile app android version from the Google play store. Or get its IOS equivalent from the App store.
  2. 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.

You can see our post on certificate of occupancyexcision of land, and land tenure system in Nigeria

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:

  1. It comes with a housing loan of up to 90% of the cost of the house.
  2. They fix the interest on the mortgage loan at 6% p.a. throughout the life of the mortgage.
  3. It has a long period of repayment tenure of up to 30 years.
  4. Contributions can help provide greater retirement security.
  5. You can borrow up to N15 million.
  6. Refunds with 2% interest on retirement.
  7. The loan repayment is comparable to a regular monthly rent payment.
  8. A lifetime registration number, a passbook for personal contribution recording, and an account statement are what they provide for each contributor.

Final Thoughts

The Federal Mortgage Loan was created primarily for the purpose of constructing, purchasing, or repairing residential properties. Nigeria’s Federal Mortgage Bank is now collaborating with mortgage lenders. Those with the technical and financial skills to build affordable housing for poor and middle-income families. It appears that you will be able to obtain your ideal home with the help of a federal mortgage loan. 

It’d be fun to give it a shot.

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