Getting a federal mortgage bank loan is not as difficult as people think in Nigeria.
A detailed step-by-step process as explained in this article will help you easily secure a mortgage loan at the federal level. Since federal mortgage loans come in different packages, it is important to know your specific need before applying for them.
What is a mortgage bank?
A mortgage bank is a financial institution that specializes in lending loans against mortgages for specific securities. Mortgage banks primarily operate by lending their money to borrowers and loan repayment is done installment with a certain interest rate sometimes they sell their loans on the secondary market.
Who is eligible for the Federal Mortgage Loan?
Eligibility allows you to stand a chance of getting approved for a federal mortgage loan. To be considered eligible, ensure you have the following criteria;
- You’re 18 years and above
- You will use NHF 1 (employer) and NHF 2 (employee) forms to register.
- Your passbook must be updated and should be transferable from one job to another
- Must remit the monthly contributions they deducted to FMBN promptly (which must be at least 6 months’ contributions)
- You must have made contributions to funds for at least six months
- You must have a steady flow of income
How To Apply For The Federal Mortgage Loan
Federal Mortgage Bank of Nigeria for the loan (FMBN) allows institutional borrowers to apply directly from them, As an individual, you can as well apply through a primary mortgage bank of your preference that is fully registered with the central bank of Nigeria.
To apply for a mortgage loan, follow these instructions below;
- You must get the loan applications from the same Primary Mortgage Institution
- You must have registered your principal mortgage institution with FMBN, to use the national housing facility
What is the procedure for Federal Mortgage Loan registration?
It is required under the law that every adult citizen of the country must contribute 2.5% of their basic income to the fund. The procedure registration goes thus;
- Your employers will receive an Employer registration form(NHF1) from the Federal Mortgage Bank of Nigeria
- Your employers will have to fill out and submit the NHF1 form to any Federal Mortgage Bank of Nigeria nearby.
- Your employers will be registered with the FMBN and they will be assigned to an employer registration number.
- Your employer will also be given NHF2 for employees to fill out, which will be submitted back to the FMBN
- The FMBN then assigns each employee to a particular registration number.
- After this, the FMBN will give each registered employee a passbook where their monthly deductions will be recorded. It is usually 2.5% of their income.
- They can now consider an employee a registered participant of the National Housing Fund.
- Then the employer will deduct contributions at the source.
- Payments will be remitted to the FMBN every month and receipt payment will be issued
How much can you apply for?
Just like every other loan, there are limits to what you can borrow as an individual. For a Federal Mortgage loan, an individual may be eligible to borrow up to 15 million Naira. However, banks may tell you otherwise because it involves a lot of risks.
What is the interest rate on Federal Mortgage Loan Nigeria?
Loans are not free. They come at a fixed price known as interest. For the Federal mortgage loan, the interest rate is about 6% per annum on every loan.
How to check your National Housing Fund contribution?
You can either check your monthly contribution through the use of the USSD code or mobile app or visit their official website, to use the USSD code, follow these instructions.
- Dial *219# on your mobile number linked to your account
- A prompt will be displayed, select 2 and send
- Then enter 1, enter the exact month that you want to check