One of the challenges facing Nigeria's housing sector is the inability of citizens, especially the larger part of the population who work in the informal sector as well as those in the formal sector to access mortgage financing.
This situation has not only widened the housing deficit gap but also dashed the hope of many Nigerians to own a property.
Daily Trust reports that UN-Habitat, the arm of the United Nations responsible for promoting socially and environmentally sustainable towns and cities, lists housing as a fundamental human right.
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The global body places affordability, sustainability and inclusiveness of the housing sector at the core of the urbanisation drive, as a way of ensuring access to adequate housing for all.
However, the journey to owning a home in Nigeria can be fraught with challenges, especially for low and middle-income earners. These include factors like high property costs, limited access to affordable financing and bureaucratic hurdles.
Subsequently, the Natational Housing Fund (NHF) was established in 1992 by the Federal Government of Nigeria through the NHF Act of 1992.
It was created to assemble long-term funds from Nigerian workers, which are then used to provide affordable housing loans through accredited mortgage institutions.
Checks by Daily Trust show that the NHF is a government-backed initiative that allows Nigerian workers to contribute a portion of their income to a housing fund.
These contributions make them eligible for low-interest mortgage loans provided by the Federal Mortgage Bank of Nigeria (FMBN).
The primary goal of the NHF is to ensure that affordable housing is within reach for Nigerian workers within low and middle income brackets
The NHF operates as a contributory scheme where eligible individuals remit 2.5% of their monthly income into the fund. These contributions accumulate over time, allowing contributors to apply for housing loans at significantly lower interest rates compared to commercial banks.
According to Federal Mortgage Bank of Nigeria's January to July 2025 operational performance report recently released, more than 76,000 new workers joined the scheme within the past seven months, a significant jump that underscores growing confidence in the Fund.
Yet, when compared against Nigeria's massive workforce which is estimated at over 70 million people, this figure is still a drop in the ocean.
The reality is that millions of Nigerian workers remain outside the NHF ship, either due to skepticism, misinformation or lack of awareness.
How NHF works
The National Housing Fund Scheme was created as a solution to Nigeria's housing challenge with the idea that if Nigerian workers each contributed a small fraction of their monthly income, the pooled resources could create a revolving fund for affordable housing loans. The scheme was therefore the government's strategic efforts at democratizing access to homeownership, ensuring that even workers on modest incomes could aspire to own a home.
It has repayment periods stretching as long as 30 years and interest rates capped at six percent per annum.
This is in addition to an opportunity to access up to N50 million Naira for housing development or outright purchase of a property.
Who is eligible?
Further checks by Daily Trust show that the NHF Scheme is designed in a way that any Nigerian up to the age of 18 years is eligible to register and begin contribution of 2.5 percent of their monthly income immediately.
As a registered contributor to the NHF Scheme, it opens up the window for the contributor to access any of FMBN's range of products after consistently contributing for a minimum period of six months.
These products include the NHF Loan, Rent-To-Own and Home Renovation Loan. Others are the Individual Construction Loan and Cooperative Housing Development Loan. In addition to these products, FMBN recently announced plans to launch the Diaspora Mortgage Loan and Non-Interest Loan.
All these products have been designed to ease the struggles of homeownership faced by majority of Nigerians who fall within the low and middle income segments.
Addressing some misconceptions about housing fund
Checks by Daily Trust reveal that some of the misconceptions about housing fund by Nigerians include the fact that the Fund is only for civil servants, taxable contributions among others
NHF is not for civil servants alone
One of the biggest misconceptions about the NHF is the assumption that the Scheme is exclusive to government employees.
While civil servants form a large portion of contributors, the NHF was designed for every Nigerian worker above the age of 18. Private-sector employees, traders, artisans, entrepreneurs and self-employed professionals can all register and contribute.
By widening the contributor base, the Scheme pools more funds for housing development and ensures that the benefits are not limited to one segment of the workforce.
The NHF Scheme targets all Nigerian workers, not only those in government employment, and more recently, it has expanded beyond Nigeria's borders, enabling Nigerians in the diaspora to participate and benefit from it.
NHF deductions are not taxes
Another misconception that has stood for a long time is the assertion that the Scheme is another government tax that workers will never benefit from.
This belief has discouraged many from even asking questions about the scheme. In reality, the deductions are not taxes but mandatory savings that remain tied to the worker's name.
However checks by Daily Trust show that workers who contribute to the NHF Scheme build eligibility to access loans for housing.
They get the ticket to access affordable mortgage finance or housing. Similarly, those who never applied for a loan throughout their years of service are entitled to a refund of their contributions with a two percent interest at the point of retirement or disengagement from service.
In the same vein, the NHF loans have been said to be shrouded in bureaucracy and associated with challenges with processing times and documentation. Although it existed before now, the deployment of Core Banking Application by FMBN has simplified the process as workers can apply through accredited mortgage banks, known as Mortgage Loan Originators (MLOs), rather than directly to FMBN.
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These MLOs guide contributors through the requirements such as proof of income, title documents and building approvals, ensuring that loans are processed transparently.
Importantly, the property being financed serves as the security for the loan, which means workers are not required to produce assets beyond the house they intend to own.
NHF loans are not only for new buildings
Many Nigerians over the years believe the NHF Scheme is only useful if they are starting construction from scratch. However, the Scheme supports a wide range of housing needs.
Contributors can use their loans to buy existing homes, purchase properties in accredited estates, construct new houses or give their existing homes a new look with the Home Renovation Loan.
The only restriction is refinancing which involves using NHF funds to pay off existing loans, which is not allowed.
This flexibility means the scheme accommodates different housing realities. A worker in Lagos may use the loan to buy an apartment, while another in Enugu may choose to build a family home on ancestral land, or move into an apartment funded by FMBN and pay on instalments as rents till he/she completes the total amount of the property and becomes an owner. Tis way, the NHF adapts to workers' diverse needs and circumstances.
How to repay the loans
NHF loans have been designed to be repayable with a six percent annual interest rate which can be spread across 30 years.
This structure ensures that repayments fit comfortably within workers' income brackets.
