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How to Access Federal Mortgage Loans in Nigeria

In Nigeria, getting a federal mortgage loan does not have to be a difficult process. All you have to do now is read this post to learn everything on how to access federal mortgage loans in Nigeria. 

The government mortgage loan package, on the other hand, includes things like a Home Renovation Loan, a Rent-to-Own Housing program, and so on. As a result, it’s critical to understand your precise requirements for a federal mortgage loan before applying for one.

About Federal Mortgage Loans in Nigeria

They founded the Federal Mortgage Bank of Nigeria (FMBN) in 1956 and took over as the country’s apex mortgage institution in 1994. Since then, the National Housing Fund, a contributing savings scheme, has been managed and overseen by it (NHF).

The NHF is a social savings project that intends to raise long-term funds in order to give low-interest loans to contributors. One of the FMBN’s main responsibilities is this.  In Nigeria, the federal mortgage bank loan is governed by the National Housing Fund Act 3 of 1992.

The scheme was formed by Act 3 of 1992. It is aimed towards Nigerians from all walks of life. Typically, those with a modest or moderate income. To assist persons who are unable to obtain commercial housing loans in purchasing a home. They would do so by contributing 2.5 percent of their monthly salaries to the fund’s managers, the Federal Mortgage Bank of Nigeria.

You can read about Deed of Assignment and property development

What is a Mortgage Bank?

A mortgage bank is a financial institution that specializes in mortgage loans. They can involve 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. 

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. To be eligible for a Federal Mortgage Loan in Nigeria, you should:

  1. You should be at least 18 years old.
  2. You will use NHF 1 (employer) and NHF 2 (employee) forms to register.
  3. Must remit the monthly contributions they deducted to FMBN promptly (which must be at least 6 months’ contributions)
  4. Employers must update the passbook, which is transferable from one job to the next.
  5. You must have made at least six (6) months of contributions to the Fund.
  6. 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

Here’s how you apply for the Federal Mortgage Loan Nigeria:

  1. Institutional borrowers can apply directly to the Federal Mortgage Bank of Nigeria for the loan (FMBN)
  2. Individuals can only apply through a Primary Mortgage Bank (PMB) of their choice that is fully licensed. You cannot apply for the loan directly through FMBN.
  3. You must get the loan applications from the same Primary Mortgage Institution.
  4. 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:

  1. Employers will receive an Employer Registration Form (NHF1) from the Federal Mortgage Bank of Nigeria (FMBN).
  2. Employers will fill out Form NHF1 and return it to the Federal Mortgage Bank of Nigeria’s nearest branch.
  3. They will register the Employer with the Federal Mortgage Bank of Nigeria and assign them an employer registration number.
  4. The Federal Mortgage Bank of Nigeria would provide form NHF2 to employers for employees to complete. Or to self-employed or individual customers directly.
  5. The employee will fill out the NHF2 form and return it to the company.
  6. Federal Mortgage Bank of Nigeria would receive completed form NHF2 from the employer or self-employed persons.
  7. The FMBN will register employees on Form NHF2 and they will assign each employee/self-employed individual a participation number.
  8. 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.
  9. After these, they can now consider an employee a registered participant of the National Housing Fund.
  10. The employer will deduct contributions at the 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.
  11. They will remit contributions from self–employed participants to FMBN monthly.
  12. 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 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
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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.

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 functions of Federal Mortgage Banks in Nigeria?

Federal Mortgage Banks in Nigeria have various functions to perform. They include:

  1. 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.
  2. At the federal, state, local, and even rural levels, it stimulates and promotes the establishment and development of mortgage institutions.
  3. It stimulates the development of long-term secondary mortgage institutions to suit Nigerians’ housing demands.
  4. Licensing authority for secondary mortgage institutions in Nigeria is what the Federal Mortgage Bank of Nigeria grants.
  5. It oversees and controls the activities of Nigerian mortgage lenders.
  6. It collects and maintains the National Housing Funds under the National Housing Fund Act’s provisions.
  7. 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.
  8. 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:

  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.

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:

  1. Federal Mortgage Bank of Nigeria
  2. 266 Cadastral AO, Central Business District.
  3. PMB 2273 Garki, Abuja. Nigeria
  4. 09-2920689, 09-2920690, 09087973000, 08170237904.
  5. [email protected]

Conclusion:

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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