National Housing Funding (NHF) is a Federal Government scheme that entitles Nigerians in paid employment and above 21 years to cater to their housing needs. This scheme was established by the virtue of the NHF Act of 1992.

According to the NHF Act, all Nigerian employees and income earners, whether in paid employment or self-employment, are entitled to the NHF scheme and can register as long as they are 21 years of age. The Act also outlines that registered members should contribute about 2.5% of their basic monthly salary to the Fund through the Federal Mortgage Bank of Nigeria (FMBN).

Is NHF compulsory? 

As per the provisions in the NHF Act, all Nigerians in paid employment are obligated to contribute 2.5% of their monthly salary to the National House Fund. Consequently, an employer must deduct 2.5% of the basic salary from the employees and remit it to the FMBN monthly.

What are the benefits of the NHF scheme? 

The main goal of the NHF scheme is the allocation of funds for the provision of affordable housing for Nigerians. Primarily, it allows a contributor to access a loan for the building, purchasing, or renovation loan for residential accommodation.

Among other benefits a contributor enjoys from the NHF scheme include:

  • Reduced tax liability because contributions to the NHF are tax-deductible
  • Housing loan of up to 90% of the cost of the house.
  • Interest on loans remains fixed throughout the life of the mortgage at 6% p.a.
  • The long period of repayment of up to 30 years.
  • Contributions can serve as additional old age security.
  • Up to N15 million can be borrowed.
  • Refunds with 2% interest on retirement.
  • Every contributor has a lifetime registration number, a passbook for the personal recording of contributions and an account statement.

What is the penalty for not contributing to NHF? 

Section 20 of the Act stipulates that Punishments vary depending on the party, as outlined below:

  1. A person who prevents or obstructs deduction or remittance of the contribution is guilty under Sec 20 of the Act, guilty of an offence, and liable to a fine of N5, 000 or one-year imprisonment.
  2. An employer who fails to make deductions from his employees’ salaries for NHF contribution or fails to remit the money deducted is guilty of an offence and liable to a fine of N50, 000. Also, the individual staff of the employer responsible for making a deduction or remit deduction is exposed to a fine of N20, 000 or imprisonment for five years term or both such fine and imprisonment.
  3. A self-employed person who fails to make a deduction and fails to remit to the bank money for the NHF is guilty of an offence and liable to a fine of N5 000 or one-year imprisonment, or both.

The institution of proceedings or imposition of a penalty under this section shall not relieve any employer or self-employed person from liability to pay to the bank the money deducted by him for the purpose of the Fund.


All Nigerians in employment, whether self-employed or in paid employment, are required by the NHF Act to contribute 2.5% of their basic salary/income to the fund. The procedure for registration is as follows:

  • The Federal Mortgage Bank of Nigeria (FMBN) will supply Employer Registration       Form (NHF1) to employers.
  • Employers will complete form NHF1 and return to the nearest branch of the Federal Mortgage Bank of Nigeria.
  • Federal Mortgage Bank of Nigeria will register the Employer and issue an employer’s registration number.
  • Federal Mortgage Bank of Nigeria will issue form NHF2 to employers for completion by employees or directly to self-employed or individuals.
  • An employee will complete the form NHF2 and return it to the employer.
  • The employer or self-employed individuals will return the completed form (NHF2) to the Federal Mortgage Bank of Nigeria.
  • Federal Mortgage Bank of Nigeria will register Employees on Form NHF2 and allocate employees’ participation numbers to each employee/self-employed individual.
  • Federal Mortgage Bank will issue a passbook to each of the registered employees where the monthly deduction of his/her 2.5% basic salary will be posted by the employer.
  • At this point, an employee is now a registered participant of the National Housing Fund.
  • Employer will commence the deduction of contributions at source. Such deductions/contributions are remitted to the Federal Mortgage Bank of Nigeria with a schedule of payment indicating the amount contributed by each employee and the period covered.
  • Self–employed contributors will also commence monthly remittances of contributions to FMBN.
  • Federal Mortgage Bank of Nigeria will accept contributions and issue receipts for payments.

How does one apply for an NHF loan? 

First, the applicant must meet the eligibility requirements on the loan application form, including registering with the NHF scheme. The applicant must be someone who contributed to the Fund at least six months before applying for the loan. Unlike institutional borrowers, individuals cannot apply directly from the FMBN but through a duly licensed and accredited Primary Mortgage Institution (PMI) of their choice. The PMI then forwards the application to the FMBN.


At its inception, the major goal of NHF was affordable housing to accommodate the Nigerian populace in a suitable environment as the performance of the housing sector is one of the yardsticks for measuring the health of a nation.

Nigeria’s property market faces a paucity of funds, thus a law that mandates every employee to contribute a part of their earnings towards owning a home is important.

In Nigeria, the demand for affordable and befitting housing for citizens far outweighs its supply. NHF, therefore, serves as a contribution towards acquiring an asset, in this case, a home.

By Resolution Law Firm

Email: info@resolutionlawng.com