NHF: Scheme so old yet so new

Many people might be wondering what new development could have happened that somebody would devote a whole column to discussing  the fledgling called National Housing Fund (NHF) scheme as one is doing here. Save your breath because nothing spectacular has happened except that it has become so old but still so new.

After over two decades of coming into operation, NHF remains, in the opinion of many Nigerians, just another failed home ownership scheme by government. The explanation they may have for this thinking is that the operations of the fund are hardly known or understood.

Many more don’t hide their frustration with this scheme which, they feel, would have served as window to homeownership for them. Many contributors to the scheme have unsavoury stories to tell about their experiences. For them, homeownership is a dashed dream, especially for low income earners.

To yet another group of people, this scheme is so old, yet so new. What they mean by this is that the scheme has been around for a long time but the impact is so minimal that it can only be seen as a new scheme. They are hoping that it would live true to its age and name.

Mortgage experts, however, say these views are mere perceptions which are far from the reality of the scheme. They insist that a clearer understanding would help both the scheme and home-seekers who would want to access home loans through the scheme.

Bertrand Bassey, a mortgage expert, explains the basic operations of the scheme.  According to him, any contributor to NHF should know that the fund is a statutorily compulsory savings scheme for all workers in Nigeria. Whether as a self-employed person or an employee, such an individual is expected to deduct 2.5 percent of his basic salary every month and pay same to the Federal Mortgage Bank of Nigeria (FMBN) without fail.

The FMBN is empowered, by the act establishing the NHF, to manage that pool of fund. Only those who are bellow 21 years are exempted from contributing to the fund. This contribution forms a large pool of fund from which mortgage loans are granted to the contributors who are eligible, ready and willing to apply for the loan. Those who are eligible to apply for the loan are those who have been contributing consistently to the fund for a period of six consecutive months.

As for those who should apply and the purpose of the loan, Bassey says that to qualify for loan, the applicant must be 21 years of age, must have a regular income and the purpose for which he is applying for the loan is  to build, buy, renovate or complete a residential building which could be located anywhere in Nigeria provided it is covered by a good and an acceptable title.

These good, acceptable or mortgageable titles include, but not limited to, Certificate of Occupancy (C of O), right of occupancy, registered deed of assignment, deed of conveyance, land certificate, etc provided they are registered or are registerable titles. He adds that the individual cannot apply directly to FMBN. He or she has to pass through a registered mortgage institution or a registered and licenced primary mortgage bank of his choice.

This primary mortgage bank must also have conditions which the loan seeker must fulfill some of which are having an account with the bank, and having up to 10 percent equity contribution of the loan he is seeking or applying for.

NHF, according to him, gives a maximum loan of N15 million. So, if an applicant is seeking to apply for the maximum loan of N15 million, the FMBN expects him to have saved up to N1.5 million with the primary mortgage bank, and he is expected to show evidence of that 10 percent contribution.

On other things that are expected from the loan seeker, Bassey says that he will fill the relevant loan application forms, including his passport photograph, tax clearance certificate to show that he is a law-abiding citizen and the photocopies of the title documents of the property he is intending to buy as mortgage or security for the loan. He will also be expected to put forward revaluation report on the property he wants to buy to determine its value and location.

Another thing which he canvassed that was personal to him was that mortgage operators should begin to look at inspection certificate on the property an applicant is buying, explaining that this was in view of the rate of collapsed building, especially in Lagos these days. “If a bank is going to take a house as security for a loan, it should not be interested in the value of the property alone, but also in the structural soundness of the property”, he posited.

Chuka Uroko