Subscribe, contribute and own N5m home with N500k equity

In a matter of days from now, 2018 will be history and a new year will be here. New year is generally strategic and even symbolic. This is the period when individuals and households indulge in the annual ritual called New Year resolutions. Institutions like companies, corporate organizations make projections and set goals they would accomplish in the course of the year.

Most times, these resolutions and set goals are hardly kept or realized. But it is not impossible to see many resolutions kept and targets met. It all depends on a combination of factors which include, but not limited to, determination, self-discipline, hard-work and the unseen hand that controls the affairs of man called fate.

In Nigeria, unlike other societies,  most people don’t factor home-ownership into their new year resolutions. This is however understandable because, this is a society where owning a home has become luxury and not necessity. Many people tend to dismiss the possibility and so, make no efforts towards owning one.

But ignorance plays a fast trick here and, in some cases, people who have information tend to dismiss it as pipe smoke. Some accept the information with a pinch of salt and so never act on it, forgetting that information is not only power but key to unlocking success.

To many, therefore, the information that it is possible to own a N5 million home with N500,000 equity contribution or a N15 million worth of home by contributing just N1.5 million equity  is as abstract as it is impracticable. This should be part of the thinking towards the New Year.

The National Housing Fund (NHF), one of the federal government’s old interventions in the housing sector, is still a reality that has served and is still serving as a sure vehicle to owning a home through  a monthly contribution of a fraction  of one’s income.

Through this fund therefore, it is possible for a home seeker to own his home by just contributing part of his income for six months and the rest is history. “NHF gives a maximum loan of N15 million and a minimum of N5 million.  So, if an applicant to the fund applies for the maximum loan of N15 million or the minimum of N5 million, he is expected to have saved up to N1.5 million with  a primary mortgage bank (PMB)”,  explains Bertrand Bassey, a mortgage expert.

Bassey notes that the apathy and poor attitude to this fund are products of perceptions and not reality. “A  clearer understanding of the fund would, perhaps,  help both the scheme and home-seekers who would want to access home loans through the scheme”, he reasoned in an interview.

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, 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 warns 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 (PMB) of his choice.

This PMB 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.

There are other things that are expected from the loan seeker. He has to 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 canvasses, which is personal to him, is that mortgage operators should begin to look at inspection certificate on the property an applicant is buying. He explains that this is in view of the rate of building collapse, 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 advises.

Chuka Uroko