Basket of Affordable Housing Loan Products

Basket of Affordable Housing Loan Products

First, consider the FMBN NHF Mortgage Loan for one. FMBN leverages funds pooled from the NHF scheme to grant wholesale loans at four per cent interest rate per annum to its accredited Primary Mortgage Banks (PMBs) for on-lending at six per cent to NHF contributors over a maximum tenor of 30 years.

The loan is secured by the mortgaged property. A contributor to the National Housing Fund (NHF) can access up to N15 million through the licenced PMB of his choice as a mortgage loan to build or purchase a home after six months of continuous contributions to the scheme.

Loans of up to N5 million attract zero equity contribution, while those from N5 million to N15 million attract only 10 per cent interest rate per annum.

Second is the FMBN Individual Home Construction Loan, which is designed to help contributors to the NHF scheme to access affordable, long-term housing construction finance to build their own homes. Key features of the loan comprise a maximum loan amount of N15 million that can be accessed and paid back over 15 years at single digit interest rate per annum of seven per cent.

The third product is the home renovation loan, that provides N1 million to contributors to renovate or carry out improvements on their existing homes and pay back over five years at single digit interest rate of six per cent. The innovative product specifically targets contributors to the NHF who already own their homes and are not seeking mortgage loans to build or purchase new ones. Latest results from the bank show that 42,037 Nigerian workers have benefitted from the home renovation loans since it was launched less than three years ago. Because of the ease of accessing it, beneficiaries living in rural areas and own land have been reported to deploy the funds to building complete homes using local building materials.

Yet another innovative affordable housing product is the rent to own scheme. Introduced by the Dangiwa-led management team, the rent to own scheme boasts convenient features that further reduce the financial burden on homeownership on Nigerian workers. The FMBN Rent-to-Own housing scheme provides an easy and convenient payment plan towards homeownership for Nigerian workers.

Specifically, the scheme makes it possible for Nigerian workers to move into FMBN homes – located nation-wide – as tenants, pay for and own the properties through monthly or yearly rent payments spread over periods of up to 30-years.

The scheme is available at single digit interest rate of nine per cent per annum on the price of the property. Properties with a maximum value of N15 million are eligible under the program. Other features include immediate access to a home for beneficiaries, early/advanced payment allowable, and elimination of equity down payment requirements and savings of costs related to a mortgage transaction.

From the NHF Mortgage loan to the rent-to-own scheme, the recurring decimal is affordability: single digit interest rates, longer terms for payment, zero or minimal equity requirement amongst others. By sustaining the momentum of ongoing reforms of the NHF scheme, boosting its financial resilience and ensuring that a greater number Nigerians that can access these loans, the Dangiwa-led management of the FMBN is providing practical proof of how the NHF scheme can directly impact Nigerian workers.

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