NHF to lunch home renovation scheme.

By Yinka Kolawole

In a bid to ensure that more Nigerians benefit from the National Housing Fund (NHF), the Federal Mortgage Bank of Nigeria (FMBN) is set to introduce a new product that will enable contributors access mortgage loans for the renovation or improvement of their existing homes. The product is to be called the FMBN Home Renovation Loan (FHRL).
Head of Corporate Affairs, FMBN, Mr. Lawal Isa, in a statement lamented that only about 60,000 contributors have benefitted from NHF out of about 4 million Nigerians that are registered and are contributing to the fund.



This means just about 1.5 percent of total number of contributors have actually benefitted from the scheme since it was established.
“This seemingly dismal number has created a negative image for the bank from the public who perceive the bank as not having effectively delivered on its mandate.
It has therefore become necessary for FMBN to develop some quick-wins that will allow a greater number of Nigerians have access to the National Housing Fund. It is in view of the foregoing that a new product is being proposed to be introduced by the bank.
The product shall be called the FMBN Home Renovation Loan (FHRL). This product will afford Nigerians an opportunity to access mortgage loans for the renovation or improvement of their existing homes. The product is specifically designed for Nigerians who are contributors to the National Housing Fund and desire to renovate or improve existing properties which are personally owned by them or through family ownership,” he stated.
Isa recalled that the NHF scheme was established in 1992 to address the constraints to the mobilisation of long term funds for housing finance and ensure that every Nigerian has access to housing loans at affordable interest rate. He further noted that the overall objective was to provide cheap source of loanable funds to nurture and sustain the mortgage industry and eventually facilitate affordable homeownership for the low and medium income groups in the country.
“However, the realization of this objective has been hampered by several challenges to housing finance in Nigeria, which include, amongst others: Lack of access to land; Inadequate funding for the housing sector; Inaccessibility of mortgage loans due to lack of proper title to properties; Low income of prospective borrowers which affects affordability; and Cumbersome procedures for obtaining Governor’s consent to land transactions which is also costly.
These challenges have limited the number of contributors to the NHF who have benefitted from the scheme. As a result, although there are currently about 4 million Nigerians that are registered and are contributing to NHF, FMBN has – been able to provide mortgage loans to only about 60,000 contributors,” he stated.
The FMBN spokesperson remarked that the new product, when launched, will be available only to NHF contributors who have not taken NHF loans to build or buy houses, adding however, that beneficiaries would still be eligible to apply for NHF loans for home purchase after liquidating the home renovation loan.
He further disclosed that the maximum amount for the proposed home renovation loan is N1 million, subject to the beneficiary’s income limit and the cost of renovation and can only be taken once in five years.
He said that the loan tenor shall be a maximum of three years or employee’s remaining years of service, whichever is less, at an interest rate of 8 percent for the duration of the loan. “This is because of the high risks involved as well as the less cumbersome process and documentation required,” Isa added.