By Arome Abu, John Ayobami Akinwumi & Faithful Agbora
![](https://thenigerialawyer.com/wp-content/uploads/2025/05/idrinstitute.png")
BACKGROUND
Nigeria still retains its reputation as the most populous nation in Africa. Expectedly, there is a corresponding housing deficit. Today, owning a decent and affordable accommodation in Nigeria comes at a premium. The National Housing Fund Act1 established the National Housing Fund2 wherein deductions and contributions from employees’ salaries are paid.
The Act provides that every worker earning N3,000 and above per annum in both the public and the private sectors of the economy is required to contribute 2.5 per cent of his/her basic monthly salary to the National Housing Fund for the purpose of developing affordable housing for Nigerians.3 Similarly, persons who are self-employed are required to deduct and contribute 2.5 per cent of their monthly income to the Housing fund.4
UTILISATION OF THE FUND
The fund which is managed by the Federal Mortgage Bank of Nigeria (FMBN), is to be utilised for financing housing in Nigeria. Consequently, contributors to the fund are entitled to a loan for the purpose of purchasing, building or renovating a house of their choice.5
REFUND
Any contributor who has not taking any housing loan or does not have an outstanding loan with the Federal Mortgage Bank of Nigeria will be entitled to refund upon attaining 60 years of age or completion of 35 years of service.6
OFFENCES AND PENALTIES
●An employer who fails to make deduction from employees’ salary will be liable to a fine of N50,000.00 (Fifty thousand naira).
●An individual who is a staff in the employment of the employer who is authorised to make a deduction but fails, will be liable to a fine of N20,000 or imprisonment for 5 years or both.
●A self-employed person who fails to make deductions or deducts but fails to remit as required will be liable to a fine of N5,000.00 or for a term of one year or both.
DOCUMENTS REQUIRED FOR OBTAINING NHF LOAN
Documents required to process a loan include:
1. Completed application form;
2. Photocopy of title documents;
3. Current valuation report on the proposed house to buy or bills of quantities (BOQ) for the
house to build;
4. 5 passport photographs;
5. Birth certificate of Age declaration;
6. Three years tax clearance certificate;
7. Evidence of NHF participation;
8. Copy of pay-slips for the previous three months.8
RECOMMENDATIONS AND CONCLUSION
One of the conditions attached to accessing the NHF loan is ‘’photocopy of title document’’ of property sought to be funded.
However, accessing a land with good title can be problematic. We recommend a review of the extant land laws to enable applicants seamlessly access lands with good title.
Whilst the goal of the NHF Act is to generate additional revenue for financing housing in Nigeria, it is saddening that most NHF applicants, especially the self-employed, experience several administrative bottlenecks in the course of obtaining housing loan.
Another Challenge with the NHF relates to the ignorance of the existence of the NHF Mortgage financing. An enlightenment campaign is hereby recommended to educate members of the public on the opportunities in NHF scheme.
AUTHORS
AROME ABU abuaromethecounsellp@gmail.com
JOHN AYOBAMI AKINWUMI john_akinwumi@yahoo.com
FAITHFUL AGBORA faithfulbrown47@gmail.com
SECTIONS OF THE NHF ACT CITED
1. Section 1 of the Act
2. Section 4 of the Act
3. Section 10 of the Act
4. Section 14(2)
5. Section 17 of the
6. Section 20 of the Act
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