About 50 percent of Retirement Savings Account (RSA) holders, equal to 7 million could qualify to access equity contribution for residential mortgage, experts in the industry have said.
According to them, about this number of RSA holders would have received employer employee contributions consistently for 60 months, which is equal to five years, as required under the residential mortgage assessment guideline.
Olumide Oyetan, president, Pension Fund Operators Association of Nigeria/MD, Stanbic IBTC Pension Managers, speaking at a seminar organised for journalist in Lagos with the theme: “Pension: An Opportunity to Own Your Own Home, An X-Ray of the New RSA Plan On Home Ownership, said the residential mortgage scheme will enhance contributors benefits and impact positively on the economy.
Oyetan said, “the successful implementation of this initiative would improve people’s welfare and move the country forward.”
He emphasised the need for stakeholders to work together to ensure the successful implementation of the guidelines.
Presenting the theme paper, Ibrahim Kangiwa, head of Investment Department, National Pension Commission (PenCom), said for contributors under the Contributory Pension Scheme (CPS) to be eligible to use their RSA balance for acquisition of residential mortgages, he must have contributed for five years (60 months) cumulative of employer and employee’s mandatory contributions.
He said the same thing was applicable to the contributors under the Micro Pension Plan (MPP), adding that married couples, who individually met the eligibility criteria, were also eligible.
On authorised limit for equity contribution that qualifies a contributor, Kangiwa put the maximum allowed at 25 per cent of the RSA balance, noting, “where 25 per cent of RSA balance is more than equity contribution, the RSA holder can only access the amount equivalent to equity contribution required.
“Where 25 per cent is not sufficient for equity contribution, RSA holder may utilise Voluntary Contribution (VC) in line with the Voluntary Contribution guidelines.
“Where 25 per cent is not sufficient for equity contribution, Micro Pension (MP) contributor may utilise contingency portion in line with MP guidelines.
“Where 25 per cent is insufficient as equity contribution, RSA holder shall deposit the difference with the mortgage lender,” Kangiwa explained.
Those exempted from this initiative, according to Kangiwa, include RSA holders that have less than three years to retirement; existing retirees on CPS; exempted persons under the PRA 2014 and RSA holders who do not have both employer and employee’s mandatory contributions for a cumulative minimum period of 60 months.
He said that equity contribution was not for refinancing existing mortgage, outright purchase of property and purchase of land, noting that the property shall be for residential purpose only.
Kangiwa said the objective of the initiative was to provide housing for first time homeowners and improve the standard of living of RSA holders under the CPS by facilitating their ownership of residential homes during their working life.
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Meanwhile, the National Pension Commission has released a list of 34 primary mortgage banks to participate in the use of the RSAs for residential mortgage.
According to PenCom, out of the 34 banks, 19 are from Lagos, 7 from Abuja and the remaining 8 are from other states.
The mortgage lenders from Lagos are Abbey Mortgage Bank Plc; Brent Mortgage Bank LTD; AG Mortgage Bank Plc; Centage Savings & Loans; City Code Savings & Loans; First Trust Mortgage Bank; Global Trust Mortgage; Haggai Mortgage; Homes-Base Mortgage; Imperial Homes; Jubilee-Life Mortgage Bank; Lagos Building & Investment; Prudential Mortgage Bank and Refuge Homes Savings & Loans.
Others from Lagos include Resort Savings & Loans; Safetrust Mortgage Bank; STB Building Society; Union Homes, Mayfresh Mortgage Bank and Resort Savings & Loans
Those from Abuja are Aso Savings & Loans; FHA Homes Ltd; First Generation Homes; Infinity Trust Mortgage Bank; MDSL Mortgage Bank LTD; Nigeria Police Mortgage Bank and Platinum Mortgage Bank
The remaining are from other states: Akwa Savings & Loans Ltd and Mutual Alliance both from Akwa Ibom; Coop Savings & Loans from Oyo State; Delta Trust Mortgage Bank; Gateway Mortgage Bank, Ogun State; Jigawa Savings & Loans, Jigawa state; Kebbi Stare Homes, Kebbi State and Living trust formally Omoluabi, Osun State
The mortgage firms are divided into two: national with minimum capital requirement of N5bn and state with N2.5bn minimum capital. In all, 13 are categorised under national, while the remaining are 21 under state.
