National Housing Fund in Nigeria 

Often you'll see NHF in your payslip, primarily if you work in the public sector in Nigeria. Additionally, even some employees in the private sector, such as real estate, have encountered the same. What does NHF mean? National Housing Funding (NHF) is a Federal Government scheme that entitles Nigerians to paid employment and above 21 years to cater to their housing needs. This scheme was established by the NHF Act 3 of 1992. 

Let's explore different aspects of the NHF, from who is eligible for this program, its interest rates, and how it works entirely. You also get answers to some of the frequently asked questions about NHF. 

Who can apply for NHF?

According to the NHF Act 2004, all Nigerian employees and income earners, whether in paid employment or self-employment, are entitled to the NHF scheme and can register as long as they're 21 years of age and whose salaries are more than N 3,000 per annum. The Act also outlines that registered members should contribute about 2.5% of their basic monthly salary to the Fund through the Federal Mortgage Bank of Nigeria (FMBN). 

Is NHF compulsory? 

As per the provisions in the NHF Act, all Nigerians earning N3, 000 or more per annum are obligated to contribute 2.5% of their monthly salary to the National House Fund. Consequently, an employer must deduct 2.5% of the basic salary from the employees earning the above-stated percentage and remit it to the FMBN monthly. 

What are the benefits of the NHF scheme? 

The main goal of the NHF scheme is the allocation of funds for the provision of affordable housing for Nigerians. Primarily, it allows a contributor to access a loan for the building, purchasing, or a renovation loan for residential accommodation. 

Among other benefits a contributor enjoys from the NHF scheme include: 

• Low-interest rates for housing loans 
• Reduced tax liability because contributions to the NHF are tax-deductible

How do I check my NHF balance? How do I access my NHF balance? 

Any NHF contributor who has registered their number with FMBN can quickly check their NHF balance or the status of their contribution(s) by following these steps:  

Step 1: Dial *219# and send 

Step 2: Type 2 and send 

Step 3: Type 1 and send

Step 4: Type the same month or period (for example, 1 to 12) you want to check and send. 

Note: if the FMBN has reconciled your monthly contributions, your balance will appear on the screen after Step 4. If your contribution has not been negotiated, the closing balance won't be displayed, and you should contact the nearest FMBN office. 

What happens to my previous NHF contributions in the event of a job change? 

If a registered NHF member changes their job, their NHF contributions are not lost. However, they have to submit an NHF form 2 to the FMBN to indicate the change and transfer their registration number to the new employer to sustain their records. 

What is the penalty for not contributing to NHF? 

Punishments vary depending on the party, as outlined below: 

1. A person who prevents or obstructs deduction or remittance of the contribution is guilty under Sec 20 of the Act, guilty of an offence, and liable to a fine of N5, 000 or one-year imprisonment. 
2. An employer who fails to make deductions from his employees' salaries for NHF contribution or fails to remit the money deducted is guilty of an offence and liable to a fine of N50, 000. Also, the individual staff of the employer responsible for making a deduction or remit deduction is exposed to a fine of N20, 000 or imprisonment for five years term or both. 
3. A self-employed person who fails to make a deduction and fails to remit to the bank money for the NHF is guilty of an offence and liable to a fine of N5 000 or one-year imprisonment, or both. 

How do I apply for an NHF loan? 

First, you must meet the eligibility requirements on the loan application form, including registering with the NHF scheme. It would be best to be a Nigerian citizen who contributed to the Fund at least six months before applying for the loan. Unlike institutional borrowers, individuals cannot apply directly from the FMBN but through a duly licensed and accredited Primary Mortgage Institution (PMI) of their choice. The PMI then forwards your application to the FMBN.

Can my spouse and I apply for NHF together or separately? 

You're not allowed to apply for NHF jointly with your spouse. Each person applies separately as long as you're both contributors to the NHF scheme. 

How much NHF loan can I get? 

Individuals eligible to get an NHF loan can get a maximum of N15,000,000, payable over 30 years. It's worth noting that individuals are not granted a loan over 90%of the cost or value of the property being mortgaged. Additionally, the loan amount an applicant gets is determined by the applicant's affordability and income level to enable the loan repayment. 

What is the interest rate on the NHF loan? 

The interest rate for an NHF loan is 6%, and it remains fixed throughout the loan tenure. 

How long does it take to get an NHF loan? 

The loan application takes about 3 to 6 months to process. It depends on the contributor's ability to meet all the requirements and the property's geographical location. 

Is collateral/ security required to qualify for an NHF loan? 

The only security/ collateral required for this loan is the property for which the loan is sought. However, the property must have valid title documents, and the property must possess a sufficient value to recover the loan. 

Can a self-employed NHF contributor access the NHF construction loan? 

A self-employed NHF contributor can access the NHF construction loan to develop their personal residential property as long as they make a statutory contribution of 2.5% of their basic monthly income. 

Apart from building a house, what other use is the NHF loan? 

 NHF loans can also renovate, expand an existing house and buy a residential home. 

Note: NHF loans are strictly for residential houses. 

How many times can a contributing member get an NHF loan? 

A contributing member to the NHF scheme can only access the NHF loan once in a lifetime. 

What if I cannot continue the loan repayment due to the loss of a job? 

The bank reaches out to the guarantors, and if they cannot pay, they will sell the property to recover the loan. 

When can I get my NHF refund? 

According to the NHF Act, a contributor to the NHF scheme can only get a refund once they have attained 60 years of age or have put in 35 years in service. The same Act also stipulates that the refund be made to contributors who didn't obtain a housing loan while in service and should be processed within three months of receipt of a refund application. 

What happens if I die while in active service? 

In case of the death of any NHF beneficiary still in service, their place of work will notify the Federal Mortgage Bank of Nigeria of the death. The Next of Kin will also proceed and provide a Death Certificate and Letter of Administration to process and collect the accumulated contributions plus the interest.