For decades, the National Housing Fund (NHF) has stood at the centre of Nigeria’s quest to make home ownership accessible to its citizens. Yet, despite its lofty promise, for years, the scheme has been largely misunderstood by the public. Emmanuel Addeh writes that that perception is changing under its current management.

The Federal Mortgage Bank of Nigeria (FMBN) was established with a clear social mandate to ensure that Nigerians, particularly those in the low- and middle-income brackets, have access to affordable housing finance. Many years on, FMBN has continued to serve as Nigeria’s foremost bridge to homeownership, helping ordinary workers turn their housing dreams into reality through the National Housing Fund (NHF) Scheme,  established by Act 3 of 1992.

In recent years, this mandate has gained renewed momentum under the leadership of Shehu Osidi, the Managing Director/Chief Executive, and his management team. Since their inauguration, they have embarked on bold reforms to reposition the Bank, deepen transparency, and enhance service delivery.

One visible result of these efforts is the marked increase in NHF registrations nationwide. According to FMBN’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 set 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 sheer lack of awareness. Misconceptions about the Fund continue to thrive, discouraging participation and denying workers access to one of the most affordable mortgage products in Africa.

The NHF and Its Objectives 

The National Housing Fund Scheme was created as a solution to Nigeria’s chronic housing challenge. The idea behind its establishment was simple: 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.

The NHF Scheme is therefore not just a savings programme but also a form of social security for Nigerian workers. It is designed to protect workers from the vulnerability of rent dependency, housing insecurity and the high cost of commercial mortgages provided by other mortgage and financial institutions. With repayment periods stretching as long as 30 years and interest rates capped at six percent per annum, the National Housing Fund remains the most worker-friendly housing finance product in Nigeria.

This is in addition to an opportunity to access up to N50 million for housing development or outright purchase of a property. Over the years, many Nigerian workers have taken advantage of the opportunity and realized their homeownership aspirations through this scheme.

The NHF Scheme is designed in a way that any Nigerian up to the age of 18 years is eligible to register and begin a contribution of 2.5 per cent 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 the majority of Nigerians who fall within the low and middle income segments.

Correcting Misconceptions

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. This way, the NHF Scheme promotes inclusivity.

The inclusivity of the NHF Scheme is one of its greatest strengths. 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.

Deductions Are Not  Taxes

Another widespread misconception that has stood as a barrier to Nigerians’ getting on board the NHF Scheme is the misconception that NHF contributions are simply 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.

“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. Those who never apply for a loan are entitled to a refund of their contributions with a 2 per cent interest at the point of retirement or disengagement from service.

“Far from being ‘lost money,’ NHF deductions are a form of enforced savings with either a home or a refund as the outcome,” the FMBN said recently.

Access to Mortgage Loans for All

Skepticism about access is perhaps the most damaging misconception surrounding the NHF Scheme. Many workers assume that NHF loans are shrouded in bureaucracy and reserved for the privileged few. While challenges with processing times and documentation have existed in the past, the system has been deliberately structured to ensure fairness. But even this challenge is being overcome today, with the Bank’s full deployment of its Core Banking Application.

Workers apply through accredited mortgage banks, known as Mortgage Loan Originators (MLOs), rather than directly to FMBN. 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.

Beyond New Buildings

Many workers wrongly believe the NHF Scheme is only useful if they are starting construction from scratch. In truth, 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 installments as rent till he/she completes the total amount of the property and becomes an owner. This way, the NHF adapts to workers’ diverse needs and circumstances.

Thoroughness, Not Complications

Documentation for mortgage loans can seem daunting, but the requirements are no different from any standard mortgage process anywhere in the world. They exist to protect contributors from fraud and ensure the value of financed properties. Items such as a Certificate of Occupancy, building plan approval and a valuation report by a registered estate valuer safeguard both the worker and the Fund.

What may appear as complicated is, in fact, a safeguard. With the guidance of accredited mortgage banks, contributors can navigate the process with clarity. Increasing digitization by FMBN has further simplified the process, reducing timelines and increasing transparency.

Easy Repayment Terms

Another enduring misconception about the NHF Scheme is that the repayment burden will cripple workers’ finances. This is not in any way true. NHF loans are deliberately designed to be affordable. The six percent annual interest rate is far below what commercial banks charge, and the repayment can be spread across as many as 30 years.

This structure ensures that repayments fit comfortably within workers’ income brackets. Unlike landlords who can arbitrarily increase rent, the NHF repayment terms remain stable, predictable and fair throughout the tenure of the loan.

Pathway to Homeownership

The National Housing Fund Scheme is not a tax, not a scam and not a privilege reserved for a few. It is a lifeline for Nigerian workers who desire to escape the trap of rent and claim the stability of homeownership. Misconceptions have long obscured its value, but the facts are clear: every contributor stands to gain, whether through a home loan or a refund with interest.

The challenge now is not whether the NHF Scheme works; it does, but whether more workers will embrace it. For those who have yet to register, the message is simple: do not let misinformation rob you of an opportunity that is both affordable and attainable. Join the NHF, secure your right to a home, and help build a future where decent housing is not a privilege but a shared reality for all Nigerian workers.

Onboarding Nigerians

At a time when the average three-bedroom bungalow in a city like Lagos or Abuja will cost upward of N30 million to buy or build, every worker outside the NHF Scheme is missing out on an opportunity to turn small monthly deductions into life-changing assets. The progress FMBN has made in expanding registrations shows that more Nigerians are beginning to realise this truth, but the numbers are still far too small compared to the country’s workforce.

Housing is more than shelter. It is a form of dignity, stability and security. For workers who spend decades of their lives in service to the nation or the private sector, a permanent home should not be a luxury. It should be a right and the NHF is one of the surest ways to claim that right. The Osidi-led management team has shown that reforms and renewed energy can inspire progress. By improving transparency, deepening accountability and expanding outreach, the current management team is restoring workers’ trust in a scheme that was once dismissed with cynicism. The rise in new registrations may be evidence of this shifting perception