By Akhigbe Dominic.M. Esq
…continued from last edition.
TUE, MARCH 14 2017-1. The property shall conform to the existing planning laws and regulations (approved building plan); the property for which the loan is sought is expected to conform to the legal requirements of the state in which it is located as well as other statutory regulations. Importantly, there has to be an Approved plan number for such property.
- The property shall possess sufficient value to recover the loan at incurable default. The property for which the loan is given must be of sufficient value. This is so to protect the funds against loss at the point where the loan is secured. The property if recovered in the event that the benefactor of the loan has failed to repay of flaunted the conditions of the loan in a grave manner must be capable of giving the Federal Mortgage Bank the value of the loan granted the Applicant when sold.
- A mortgage property shall be insured against hazards such as fire, flood and others; a property for which an NHF Loan is given must be covered by a valid insurance policy. Such policy must be such that can cover the investment of the investors.
- The loan shall be secured by first legal mortgage of the property between the applicant and the mortgage loan originator and assigned to FMBN.
(v).THE BORROWING LIMIT BY THE HATIONAL HOUSING FUNDS:
The National Housing Funds loan has a limit of borrowing to a single Applicant. The higher the amount, the higher the equity contribution by the applicant as shown below:
- A borrower is entitled to a maximum loan of fifteen million naira (N15, 000,000.00) or as determined by the Bank.
- No individual should be given a loan in excess of Ninety Percent (90%) of the cost or value of the property to be mortgaged. For example; if an applicant intends to buy a house for the price of Ten Million Naira, the individual can only get Nine Million Naira maximum as loan from the NHF for same property.
- Equity contribution based on the new loan amounts is as follows:
- N15,000,000.00 – 30% Deposit by Applicant
- N10,000,000.00 – 20% Deposit by Applicant
- N5,000,000.00 – 10% Deposit by Applicant
(vi).THE NHF INTEREST RATE:
- Interest rate shall be as prescribed by the National Housing Fund Act which is not more than Six Percent (6%) yearly.
(vii)THE NHF SECURITY FOR THE LOAN
- The maximum repayment period shall be 30 years: The NHF loan can spread for up to thirty years (30). The individual Applicant taking the loan for thirty years must not be more than sixty years in before he terminates the loan. If he is to be above thirty years at the time of terminating payment; he is therefore expected to take the loan for a period shorter than thirty.
- Individual borrower shall make repayment through the mortgage loan originator through which they obtained the loan: the repayment of the loan is done through the Mortgage Loan Originator that packaged the loan. No individual applicant is allowed to make direct remittances to the Federal Mortgage Bank of Nigeria.
(viii) AFFORDABILITY AND OFFER:
Affordability test is conducted on the Applicant by a committee set at both the level of the Loan Applicator and the Federal Mortgage Bank. This is where your application is critically examined and evaluated by this committee. Once an applicant passes the Affordability test, he gets a loan approval. A letter is subsequently made to him by the Federal Mortgage Bank through the PMB. All the details of acceptance and repayment as well as the initial expectations from the applicant are set out in this offer Letter which the Applicant is expected to accept in writing. With this done, your dream of personal House ownership is through the National Housing Funds scheme finally realized.
Akhigbe Dominic.M. Esq., /Property Law Expert/CEO, H.I.E Properties & Homes Ltd/SENIOR STRATEGIC PARTNER, PropertyLogic Incorporated/Seasoned Business Coach/Columnist of The BusinessDay/Contributing Editor, govandbusinessjournal.com.ng