The Federal Mortgage Bank of Nigeria (FMBN) plays a crucial role in the Nigerian housing sector. Initially established in 1956 as the Nigerian Building Society (NBS), it has evolved into a key institution focused on providing affordable housing and driving mortgage finance in the country.
Modern housing in Nigeria
History and Evolution
The Federal Mortgage Bank of Nigeria (FMBN) was established in 1956, known then as the Nigerian Building Society (NBS), a joint venture of the Commonwealth Development Corporation and the Federal and Eastern Governments of Nigeria. The Federal Mortgage Bank of Nigeria (FMBN), formerly known as the Nigerian Building Society (NBS), was founded in 1956 as a joint venture by the Federal and Eastern Governments of Nigeria, and the Commonwealth Development Corporation. Following the introduction of the Indigenisation Policy, the Federal Government, by Indigenisation Act 1973, undertook 100 percent ownership acquisition of the NBS and consequently renamed it the Federal Mortgage Bank of Nigeria (FMBN).
In 1994, the Federal Mortgage Bank of Nigeria, with the promulgation of the FMBN Act 82 [1993] and the Mortgage Institutions Act 53 [1989] was accorded the status of the apex mortgage institution and thus ceded its retail function to an autonomous company, Federal Mortgage Finance Limited (FMFL) which was carved out of the FMBN, itself fully owned by the Federal Government of Nigeria.
After the housing sector in Nigeria underwent reform, FMBN was reorganized as a Federal Government-Sponsored Enterprise (FGSE) with a stronger emphasis on its capital market and secondary mortgage functions.
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Core Functions of FMBN
The FMBN operates as an effective vehicle for increasing the mobilisation of long-term funds, lending volume and expansion of mortgage lending services to all segments of the Nigerian population. FMBN is one of the key stakeholders in the housing and construction sector whose presence at the 16th AIHS will definitely speak volume. The apex mortgage institution at the AIHS will avail participants of its plans in the area of affordable and sustainable housing provision following the recent change of leadership of the mortgage institution.
The Bank operates as an effective vehicle for increasing the mobilisation of long-term funds, lending volume and expansion of mortgage lending services to all segments of the Nigerian population.
To meet its mandate, the FMBN has shifted operational emphasis to expand its functions from only social housing on-lending under the NHF to include commercial on lending for housing, commercial mortgages refinancing, mortgage purchasing and warehousing and Mortgage-Backed Securitisation.
FMBN office in Nigeria
Key functions include:
- Increasing the mobilisation of long-term funds.
- Expanding mortgage lending services to all segments of the Nigerian population.
- Commercial on lending for housing.
- Refinancing commercial mortgages.
- Mortgage purchasing and warehousing.
- Mortgage-Backed Securitisation.
The banks overall mandate is to promote the delivery of affordable and modern houses to Nigerians.
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Long-term credit services to mortgage banks in Nigeria are what the Federal Mortgage Bank provides. They provide it along with rates that will allow the mortgage banks and institutions to grant loans to individuals.
The Federal Mortgage Bank is also the link between the mortgage market and the capital market.
The FMBN facilitates housing finance by increasing long-term capital mobilization and lending volume.
The Bank’s current business strategy focuses on partnerships with national and international organizations with the necessary financial and technical resources, in order to provide affordable mass housing for the low income end of the market.
National Housing Fund (NHF)
Additionally, it started the management and administration of the National Housing Fund (NHF), a contributory savings program created by Act 3 of [1992]. The FMBN started the management and administration of the contributory savings scheme known as the National Housing Fund (NHF) established by Act 3 of 1992. A social savings program is the National Housing Fund (NHF) designed to mobilize long-term funds from Nigerian workers, banks, insurance companies and the Federal Government to advance concessionary loans to contributors.
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The NHF is a pool that mobilizes long-term funds from Nigerian workers, banks, insurance companies and the Federal Government to advance loans at soft interest rates to its contributors.
It targets Nigerians in all sectors of the economy.
Typically those within the low and medium-income levels.
To help people who cannot afford commercial housing loans to own houses.
They would achieve this by contributing 2.5% of their monthly salary to the Federal Mortgage Bank of Nigeria, managers of the fund.
The Federal Mortgage Bank of Nigeria would provide form NHF2 to employers for employees to complete.
The employer will deduct contributions at source.
Thereafter, they will submit such deductions/contributions to the Federal Mortgage Bank of Nigeria.
It is one of the FMBN’s major responsibilities.
Accessing Federal Mortgage Loans
Owning a home is a universal aspiration, an essential step toward independence and stability in life. However, in Nigeria, the journey to homeownership is often fraught with challenges. Despite the government’s efforts to provide housing solutions, many Nigerians remain unaware of the opportunities and access to loans available through mortgage institutions.
It’s not news that you must apply for a loan before you get it.
Individuals can only apply through a Primary Mortgage Bank (PMB) of their choice that is fully licensed.
The Federal Mortgage Loan, like every other loan, has the maximum amount you can get. So, for this a federal mortgage loan, a borrower may be eligible for a maximum loan of N15 million.
However, the borrower’s bank may advise otherwise.
But they should give no one credit for over 90% of the value of the mortgaged property.
Every loan comes with its interest rate.
However, the National Housing Fund Act regulated the interest rate for the federal mortgage loan.
They fix the interest on the mortgage loan at 6% p.a.
Every loan agreement specifies when your lender expects you to pay back the debt.
You can repay a federal mortgage loan over a period of up to 30 years.
Before you could stand a chance to get a loan successfully. You must be eligible to apply.
Now, we’re all square with the meanings of both Federal Mortgage Loan Nigeria and Mortgage Bank, respectively.
A mortgage bank is a financial institution that specializes in mortgage loans.
They can involve it in both the origination and servicing of mortgage loans.
Checking NHF Contributions
It’s cool to keep abreast with your monthly contribution as a subscriber of the National Housing Fund.
Besides that, you have a peace of mind when you know your contributions are right on track.
Subscribers can check the status of their contributions for any month in the current calendar year.
Most of the time, you’d want to know if they have remitted your contributions.
The Federal Mortgage Bank of Nigeria introduced the USSD code.
The USSD CODE to use in order to carry out those transactions is *219#.
Note: You can type “00” in each of the submenu to go “Back” to the previous screen.
2. Download the FMBN Mobile app android version from the Google play store.
Maybe you entered the wrong info in your profile and you need to edit it (on the FMBN Mobile App or USSD platform).
And because of this, you would want to edit it.
Just know that you cannot edit their profiles on these platforms.
Having seen how you can check your National Housing Fund monthly contribution.
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