This Is Why Your NHF Contributions Can’t Help You Get A Housing Loan From FMBN?

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Federal Mortgage Bank of Nigeria (FMBN) has so far disbursed N39 billion out of about N90 billion that has been approved, representing just over 43 percent; while out of the N110 billion approves as estate development loan (EDL), only N62 billion representing about 53 percent have been disbursed. the National Housing Fund (NHF) presently only has 3,772,031 contributors, adding that it would require 50 contributors to contribute N500 monthly for 10 years before the bank can be able to provide a loan of N15 million for one individual. 

Currently every employee in Nigeria is expected to contribute 2.5% of his Basic Housing and Transport Allowance to the National Housing Fund. It’s a statutory requirement and a mandatory deduction and remittance bestowed on every employer with at least 5 people and above. By all accounts the National Housing fund should provide the ticket which every employee in Nigeria can own a house someday.

The NHF disburses money through the Federal Mortgage Bank of Nigeria. So basically, contributors go to the FMBN for housing loans after successfully applying and meeting the conditions of the NHF. But how many houses has the FMBN delivered to date? Well according to the Managing Director Ya’u Kumo only 56,000 housing units have been delivered to date.

So where does the problem lie then. Why only 56,000 housing units when we need about 17million? Well excerpts of the interview granted by the MD of FMBN to the Vanguard Newspapers may provide an answer.

Managing Director, FMBN, Mr. Gimba Ya’u Kumo, who disclosed this in Abuja, lamented the low capital base of the bank which is currently N5 billion, out of which only 50 percent or N2.5 billion being the Federal Government’s share has been paid up. He noted that the other shareholders, namely the Central Bank of Nigeria (CBN) and the National Social Insurance Trust Fund ( NSITF) have not paid up their 30 percent and 20 percent share respectively

Can you imagine that?? The FMBN has a Capital Base of N5billion and even the CBN is yet to pay up??? I find this hard to believe considering this is the CBN we are talking about here! Besides, by not even paying up their own 30% of the money how then are they a legal shareholder? I even wonder how a bank, a mortgage bank for that matter should have a paid up capital of N5billion. According to the MD again he believes the bank should actually have 40x that amount as paid up capital and I quite agree with him

He called on the Federal Government to increase the bank’s share capital from its present N5 billion to N200 billion, to enable it address the housing deficit in the country. He asserted that the over 17 million housing deficit in the country would require aggressive injection of funds by the government. 

By the way, 50 contributors contributing N500 a month for 10 years is just N3million!! Some how even that math doesn’t add up. Housing in Nigeria really is a problem. I do not see myself buying a house here at this rate. The FMBN obviously needs a bail out or a bail in or whatever name you call it. For now though, lets just keep contributing. By the way here is what you need to be eligible for an NHF loan.

• Registration via NHF 1 (employer) and NHF 2 (employee) forms.
• Deducted monthly contributions remitted to FMBN promptly. At least 6 months contributions should be made. Passbook to be updated by employer and is transferable from one employment to the other. Yearly statement of cumulative contributions plus accrued interest available.
• Apply through any accredited Primary Mortgage Institute (PMI)
• Applicant must provide satisfactory evidence of regular income.

Best of Luck!!

Note: Information from Vanguard Website was used to write this article