The National Housing Fund Scheme; for who? (2)

Informal Sector stake.

Last edition, I started to deal with the National Housing Fund scheme. This is the vehicle that cruises the ambition of house ownership through the Federal Mortgage Bank of Nigeria, FMBN to reality and help them fulfill their dream. I dwelt extensively on those applicants that fall within the Formal sector of the economy; those with paid-employment. I wrote in my introduction that the National Housing Scheme, the NHF is for all Nigerians of all creed and clans, mostly those within the middle and low level income bracket. Today; I will be taking a look at the Informal sector individual who desires to get fund from the Federal Mortgage Bank of Nigeria, using the National Housing Fund scheme as a vehicle. Like the last edition, the information here is from the direction of the Federal Mortgage Bank of Nigeria, the FMBN for those within this informal sector bracket; those not on salary jobs.

The Informal Sector Cooperative Housing Loan Scheme described shortly as ‘The Coop Loan Scheme’ is a product that falls under the umbrella of the National Housing Fund (NHF) Scheme, This is a window designed to capture the non-salaried informal sector Nigerians within the Nigerian economy through the co-operative societies. This enables those within this bracket to join the National Housing Fund scheme and avail themselves the opportunities of becoming very proud home owners within the Federal Republic of Nigeria. Under this informal sector scheme, a Federal Mortgage Bank Loan could be accessed in any of the two ways to be examined below:

1. The Co-operative National Housing Fund Loan (CNL):

This loan window of opportunity offers the individual in the co-operative mortgage loan opportunity to buy a housing unit developed through the Cooperative Housing Development Loan or take an option to renovate an existing Housing Unit. This window of opportunity is least applied as most Nigerians erroneously believe the National Housing Scheme is for the employed alone. In fact, a lot of private sector employees believe the scheme is a government employees’ prerogative. This is the bane of this window of opportunity.

The features of this window are carefully outlined and explained below:

1. An individual member of this Co-operative shall enjoy the housing loan at an unbelievable interest rate of six percent annually.

2. Members of the Co-operative shall make a down payment of 15% of the approved selling price for their choice house as their personal stake in the loan.

3. Evidence of minimum NHF monthly contributions of #450.00 for a period not less than six months is required from the applicant at the point of loan application.

4. The tenure of the loan for such Co-operators twenty five years (25yrs) maximum.

5. . If the individual Co-operator contributes more than the bench mark of #450.00 monthly, such excess contribution above the of #450.00 shall be account for in his favour as part of his personal stake contribution at the time the loan application is made.

This segment of this scheme also requires the Co-operative Society as a body to submit on behalf of the Cooperators following:

1. Evidence of membership of a co-operative society.

2. Evidence of the National Housing Fund registration with up-to-date contribution.

3. Other Documents to be submitted to the Primary Mortgage Institution include the following:

4.

a. Completed application CNL form

b. Two passport photographs of the applicant.

c. Proof of ownership of the property: title deed of the land to be built or CofO of the house to be renovated.

5. . A guarantee from the Cooperative Society to which he belongs and this is to guaranty that:

a. Certificate registration of the Co-operative society

b. Legal title on the subject; House or Land.

Where there is no title to this property at the point of application, such title is expected to be processed and made available to the bank subsequently.

2. Cooperative Housing Development Loan (CHDL):

The loan enables a cooperative society that has acquired a parcel of land to develop houses for allocation to its registered members. The parcel of land is expected to have title in its name of the Co-operative society which is to act as the facilitator for of its members in the processing of the loan transaction. The society is also expected to facilitate the construction of the housing units. The Title to be bestowed on the final owners of the houses will be Deed of Sublease.

The following are the salient Features of such Cooperative:

1. The Co-operative Society must be registered with the Registrar of Cooperatives in charge of the area where it is domiciled.

2. The Society must be registered with the National Housing Fund (NHF) Scheme.

3. The Society must be responsible for the Remittances of the various contributions of the members.

4. The Cooperative Society must be accredited by the Federal Mortgage Bank of Nigeria.

5. The Cooperative must have been in existence for a minimum period of one year twelve month during which membership deals paid by members have been consistent.

6. The proposed estate must have good title that can be sub-leased to individual who are the allottees of the housing units in the estate.

7. The tenure of the loan shall be two years with moratorium period of one year.

8. . The loan shall be disbursed to a cooperative society at an interest rate of TEM PERCENT.

9. The Cooperative by practice shall identify a Primary Mortgage Institution (PMI) with which it shall collaborate for the purpose of processing a Cooperative National Housing Fund Loan (CNL) for its qualified members.

10. Housing units for the proposed project should fall within a target selling price not in excess of five million naira (#5,000,000.00).

11. The land upon which the Estate is to be developed shall have a valid legal Title devoid of every know encumbrances.

12. The security for disbursing each cache of the loan shall be the Title document of the estate land which must be in favour of the Cooperative.

13. The loan shall be disbursed in three phases to complete the substructure, super-structure, and finishing of the housing unit.

14. The Bank shall finance One hundred percent (100%) of the housing development and Ninety percent of the infrastructural facilities within the Estate.

15. The co-operative society is to develop the housing estate in any of the following ways in line with the Bank’s directive:

a. The Cooperative society is to engage qualified registered building professionals with hands on experience with a view to managing the projects and completing the housing units to know quality standard of structural development.

b. The Cooperative society could use professionals from within its members with proof of technical expertise to facilitate its project complete the building projects within the estate for member.

c. Or the Cooperative society could engage the services of Estate Development companies, on the grounds that the Estate companies can deliver the houses at a price affordable to the Cooperative Society.

16. The Housing units in the estate must be sold to the co-operative society members who are contributors to NHF Scheme first of alls.

The Cooperative Housing Development Loan (CHDL) is required to present the following Document among others: 

17. Certificate registration of the Co-operative society

18. Bye laws of the cooperative society.

19. Explicit and detailed Profile of the Co-operative Society.

20. .The Resolution of the Board of Trustees of the Society signed by the chairman and the Secretary, authorizing the Cooperative society to borrow from the bank.

The National Housing Fund scheme is a noble intention designed to alleviate the perennial housing deficit which still stands at about thirty percent today. It is therefore a puzzle that most Nigerians are unaware of this very golden opportunity to avail themselves the lifetime opportunity to own their own houses without sweat. I am on the humble opinion that Nigerians should jump on this noble trail and change their live for ever now!

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Akhigbe Dominic