Understanding The National Housing Fund (NHF) Contributions In Nigeria

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Understanding The National Housing Fund (NHF) Contributions In Nigeria

by Erudite » August 29th, 2020, 7:59 pm


An Attempt to Answer Fourteen (14) Commonly Asked Questions.(FAQ)

1. *What Really Is NHF that I am seeing in my Payslip?* Ans: It means National Housing Fund (NHF). It was established by Federal Government of Nigeria in 1992. NHF Act 2004 is the Law that is effective now.

2. *Who is the custodian and manager?* Ans: Federal Mortgage Bank(FMB) of Nigeria.

3. *Who and who is the Fund for?* Ans: Workers in both Public and Private Sector whose salaries are more than N3,000 per annum.

4. *How much is deducted from my Salary?* Ans: According to the Act, the Contributory rate is 2.5% of Basic Salary. However, from the evidence in the Pay-slips of FG workers, it is 2.5% of the Consolidated Salary.

5. *Why have they not been deducting it since until now we are in IPPIS?* Ans: Those are the benefits of implementing Centralized Payroll System. It enables the government to implement all the Acts pertaining to personnel emoluments.

6. *Can I collect the money they are deducting from me while in active service?* Ans: The Act provides that one can have access to one's savings when one is 60 years. Hence for the sector that the retirement age is above 60 years? YES, the law permits that you can collect the money including accumulated interest.

7. *What of if LIFE happens?* Ans: In case of death while in active service, the institution where one works will notify Federal Mortgage Bank of the death. Consequently, the Next of Kin as contained in the Staff Records will need to provide the Death Certificate and Letter of Administration for processing and collection of the accumulated Contributions with Interest.

8. *What do I stand to Gain?* Ans: The objective of the scheme is to help provide housing finance for Nigerians. Hence you stand to:

a. Have the ability to finance the building of your house on a Land you have already bought that has a Title Document most preferably a Certificate of Occupancy (C of O).

b. You can be assisted with a Mortgage Loan to buy a new house from an existing Registered Estate Agent that has C of O or houses built by FMB.

c. You can Renovate an already existing house.

9. *What of if I already Have a Land?* Ans: Yes, that land must have a Title Document most preferably a Certificate of Occupancy. The loan is actually for building not for buying Land.

10. *How Much Can I Borrow?* Ans: The maximum one can borrow is Fifteen Million Naira(N15,000,000) depending on one's salary and need. The maximum duration of repayment is 30 years. This repayment period depends on your age and years of service remaining before retirement.

11. *I want to Renovate my House, Anything for me in the Scheme?* Ans: Yes, there is a Renovation Loan of N1,000,000. For you to benefit from this the Head of your Institution will give an approval and you will go through a Primary Mortgage Bank repayable in 5 years. An MOU will accompany this.

12. *What is the interest rate on the loan?* Ans: The rate is 6% calculated on reducing balance method.

13. *Do I need a Guarantor?* Ans: Yes, two Guarantors.

14. *What of if I cannot be able to continue the payment of the Mortgage Loan due to loss of Job?* Ans: The Bank will fall back on the guarantors and if they cannot, the property will be sold to recover the loan.

Ref: *NHF Act 2004.*

For more information, visit www.fmbn.gov.ng or Federal Mortgage Bank closer to you or the National Housing Fund Desk Officer of your Institution.