The Federal Mortgage Bank of Nigeria (FMBN) has moved to increase access to housing as it works at reducing the country’s 17 million housing deficit.
The Managing Director of FMBN, Alhaji Gimba Ya’u Kumo has unveiled an initiative that would increase access to the National Housing Fund (NHF). The initiative called FMBN Home Renovation Loan (FHRL) is part of deliberate measures put together by the bank not only to increase the housing stock, but also to assist individuals who need funds to renovate their homes.
The service is specifically designed for people who are contributors to the NHF. Under the new initiative, NHF contributors can be granted renovation loans not exceeding one million Naira.
Speaking through the bank’s Head, Corporate Affairs department, Mr. Lawal Isa, Kumo explained that “an applicant must be a contributor to the NHF while the maximum loan amount shall be N1 million subject to the income limit of the beneficiary as well as the ultimate cost of renovation. It’s accessible to every individual whether civil servants at the Federal, State as well as workers in the private sectors”.
The loan is expected to be repaid within a maximum term of four years or an employee’s remaining years of service, whichever is less.
The loan will be given out at an interest of 8 percent.
Under the loans guidelines, if a beneficiary is unable to repay either through death or disengagement from service, the FGSHLB would be responsible for liquidation of the outstanding loan balance through the beneficiary’s terminal benefits.
“Applicants will take out a Reducing Term Assurance policy which guarantees the outstanding loan and covers death, incapacitation and loss of job,” the bank said.
Private sector employees would require a “letter of undertaking from the chief executive of the employing organisation to deduct monthly repayment of the loan from the employee’s monthly salary and remit directly to FMBN.
“In the event of resignation, death or disengagement from service, the organisation shall be responsible for repayment of outstanding loan balance through the beneficiary terminal benefits,” he noted.
“The facility shall not be available to any contributor who has enjoyed NHF loan to buy or build a house. It could be taken jointly by a couple, subject to the income assessment of both parties while the loan can only be taken once in five years. Beneficiaries may however, be eligible to apply for NHF loans for home purchase after fully liquidating a home renovation loan earlier taken.
“Also applications are to be submitted with certified Bill of Quantities indicating the amount required for the renovation,” the bank further explained.