Equity for mortgage: Nearly a million pension contributors scale hurdle

Nearly one million pension contributors have successfully scaled the hurdle of approval to use their pension funds for equity contributions toward residential mortgages.

The number, which has reached 9,080 at the end of third quarter 2024, and expected to hit one million at the end of the same year, marks a significant step in allowing contributors to tap into their retirement savings for home ownership in Nigeria.

Data from the National Pension Commission (PenCom) shows that a total of N79.74 billion has been approved by the regulatory authority for payment for equity contribution for residential mortgage up the end of third quarter 2024.

The Guidelines on Accessing Retirement Savings Account (RSA) balance towards Payment of Equity Contribution for Residential Mortgage by RSA Holders (The Guidelines) is in line with the provisions of Section 89 (2) of the Pension Reform Act (PRA 2014), which allow RSA holders to utilize part of their retirement savings as equity contribution for the purpose of securing Residential Mortgage, subject to guidelines to be issued by the Commission.

The Pension Fund Operators Association of Nigeria (PenOp) said rising allocation to equity contributions for residential mortgages will boost homeownership and real estate development in the country.

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They believe that the growth in a number of successful applicants is a demonstration of the substantial commitment of the pension sector to facilitate and stimulate growth in the economy.

Agudah Oguche said the growth underscore the substantial impact of directing 25 percent of RSA balances towards residential mortgage equity contributions, demonstrating a substantial commitment to facilitating homeownership and stimulating the real estate sector.

PenCom on 23rd September 2022 approved the issuance and immediate implementation of the guidelines on Accessing Retirement Savings Account (RSA) balance towards payment of Equity Contribution for Residential Mortgage.

PenOp in trying to enhance understanding and public knowledge about the pension mortgage guidelines, explained that anyone with a Retirement Savings Account (RSA) or Micro Pension Plan (MPP), provided they are in active employment or self-employed can apply.