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NATIONAL HOUSING FUND ACT
ARRANGEMENT OF SECTIONS
NATIONAL HOUSING FUND ACT
An Act to provide for the establishment of the National Housing Fund and for matters connected therewith.
[1992 No. 3.]
[31st January, 1992] [Commencement.]
(1) There is hereby established a fund to be known as the National Housing Fund (in this Act referred to as “the Fund”).
(2) All contributions and other monies required or prescribed by this Act shall be paid into the Fund.
The aims and objectives of the Fund shall be to—
(a) facilitate the mobilisation of the Fund for the provision of houses for Nigerians at affordable prices;
(b) ensure the constant supply of loans to Nigerians for the purpose of building, purchasing and improvement of residential houses;
(c) provide incentives for the capital market to invest in property development;
(d) encourage the development of specific programmes that would ensure effective financing of housing development, in particular low cost housing for low income workers;
(e) provide proper policy control over the allocation of resources and funds between the housing sector and other sectors of the Nigerian economy; and
(f) provide long-term loans to mortgage institutions for on-lending to contributions to the Fund.
The resources of the Fund shall consist of the following, that is—
(a) contributions by Nigerians in both the public and private sectors;
(b) investment in the Fund by commercial and merchant banks;
(c) investment in the Fund by insurance companies registered under the Insurance Act;
(d) financial contributions by the Federal Government for long-term housing loans.
(1) A Nigerian worker earning an income of N3,000 and above per annum in both the public and the private sectors of the economy shall contribute 2.5 per cent of his basic monthly salary to the Fund.
(2) An interest rate of 4 per cent shall be payable on contributions made under subsection (1) of this section.
(1) Every commercial or merchant bank shall invest in the Fund 10 per cent of its loans and advances at an interest rate of 1 per cent above the interest rate payable on current accounts by banks.
(2) Every registered insurance company shall invest a minimum of 20 per cent of its non-life funds and 40 per cent of its life funds in real property development of which not less than 50 per cent shall be paid into the Fund through the Federal Mortgage Bank of Nigeria (in this Act referred to as “the bank”) at an interest rate not exceeding 4 per cent.
(3) Nothing contained in the Insurance Act or relating to investment of insurance companies in real property shall affect the provisions of this Act.
(1) The Federal Government shall make adequate financial contributions to the Fund for the purpose of granting of long-term loans and advances for housing development in Nigeria.
(2) The Federal Government may also make available such other sums either in naira or foreign currency to the Fund as it may deem necessary.
(1) The Fund shall be managed and administered by the bank.
(2) The bank shall ensure that—
(a) the proceeds from the Fund are utilised to finance the housing sector of the economy through wholesale mortgage lending to primary mortgage institutions;
(b) the aims, objectives and functions of the Fund are effectively carried out by the bank and mortgage institutions.
A mortgage institution registered under the Mortgage Institutions Act (in this Act referred to as “mortgage institution”) shall utilise the proceeds from the Fund to finance mortgage lending in accordance with the provisions of this Act and the Mortgage Institutions Act.
(1) An employer who has in its employment an employee earning a basic salary of N3,000 and above per annum shall deduct 2.5 per cent of the monthly salary of that employee as the employees contribution to the Fund.
(2) The amount deducted pursuant to subsection (1) of this section shall be remitted to the bank within one month of the making of the deduction.
All self-employed persons shall deduct from their monthly incomes the amount stipulated in section 4 (1) of this Act and shall within one month remit same to the bank.
(1) The Central Bank of Nigeria shall collect from commercial and merchant banks at the end of every year and not later than one month thereafter, the percentage of their contribution to the Fund as specified in section 5 (1) of this Act.
(2) The Central Bank of Nigeria shall within two months of making the collection under subsection (1) of this Act pay the money to the bank for investment in the Fund.
(1) The Bank shall, at the end of every year after careful examination of the audited annual accounts of each insurance company, determine the amount due from the insurance company and shall issue a demand notice of the amount due from the insurance company for purposes of investment in the Fund.
(2) The insurance company shall on the receipt of a demand notice from the bank pay the amount within one month of the demand into the Fund.
(3) Failure by any insurance company to pay to the bank any amount due under subsection (2) of this section shall be regarded as a contravention of this Act and shall constitute one of the grounds for which the Commissioner for Insurance may cancel the registration of an insurance company in default.
All monies received by the bank under this Act shall be credited to the Fund immediately on receipt.
(1) A mortgage institution duly licensed under the Mortgage Institutions Act shall qualify for loans from the Fund, on such terms and conditions as the Minister may, from time to time, by regulations published in the Gazette, specify.
(2) Any loan obtained by a mortgage institution under subsection (1) of this section shall be made available to contributors wishing to build, purchase or renovate houses.
(3) The Minister may by regulations published in the Gazette specify the manner in which and the conditions and terms of repayment of any loan obtained pursuant to subsection (2) of this section.
(1) Any loan obtained from a mortgage institution shall be secured by a first mortgage.
(2) Any loan granted by the bank to a mortgage institution shall be secured by a block of existing mortgages under cover of Sales and Administration Agreement to be executed between the bank and the mortgage institution.
(3) The Sales and Administration Agreement referred to in subsection (2) of this section shall be registrable in the Land Registry along with the Deed of Assignment of Mortgages to which the Agreement relates.
(1) The loans made by the bank shall be at interest rates slightly lower than the prevailing commercial rates in Nigeria.
(2) The interest rate for each loan shall be fixed for the duration of the loan.
(3) The bank shall charge a mortgage institution not more than one percentage point above its borrowing rate.
(4) Mortgage institutions shall be allowed a minimum spread of four percentage points above the rate charged by the bank.
Any contributor who has not obtained a housing loan from the bank and has—
(a) attained the age of 60 years; or
(b) retired from his employment and becomes incapable of continuing the contribution to the Fund as specified in this Act, shall be eligible to a refund of his contribution within three months of the application at the rate of interest prescribed by the Minister.
The bank shall have a right of access at all reasonable times to offices, books of account and documents relating to deductions made in accordance with this Act by any employer or self-employed person and may make any examination and inquiry necessary to obtain information for the purposes of this Act.
(1) The bank shall render periodic account on the Fund to the Central Bank of Nigeria, in such form as the Minister may direct.
(2) The bank shall render annual returns to all contributors showing, amongst other things, total contributions, accrued interests and balance to date.
(3) A mortgage institution which has obtained a loan from the bank shall render quarterly returns to the bank in such form and manner as the Minister may, from time to time, specify.
(1) An employer who—
(a) fails to make deductions from the basic salaries of his employees as required by this Act; or
(b) deducts any sum of money from the basic salaries of his employees for the purpose of the Fund and fails to remit the money so deducted to the bank, is guilty of an offence under this Act.
(2) A person guilty of an offence under subsection (1) of this section is liable on conviction, in the case of—
(a) a body corporate, to a fine of N50,000; and
(b) an individual who is a staff in the employment of an employer and who is authorised to make the deduction or payment to the bank, to a fine of N20,000 or imprisonment for a term of five years or to both such fine and imprisonment.
(3) A self-employed person who fails to make deductions or deducts and fails to remit to the bank any money due to the Fund is guilty of an offence under this Act and liable on conviction to a fine of N5,000 or to imprisonment for a term of one year or to both fine and imprisonment.
(4) A person who prevents or obstructs the deduction or remittance of the contribution due to the bank under this Act is guilty of an offence and liable on conviction to a fine of N5,000 or to imprisonment for a term of one year or to both such fine and imprisonment.
(5) 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.
A person who for the purpose of evading payment of any deduction or contribution made by him or some other person or who for the purpose of obtaining any benefit for himself or some other person under the Fund, knowingly makes—
(a) any false statement; or
(b) misrepresentation; or
(c) produces or furnishes any document or information which he knows to be false in any material particular, is guilty of an offence under this Act and liable on conviction to a fine of N10,000 or to imprisonment for a term of three years or to both such fine and imprisonment.
A person who fails to produce any document for inspection under this Act is guilty of an offence and liable on conviction in the case of—
(a) a body corporate, to a fine of N50,000;
(b) an individual, to a fine of N5,000 or imprisonment for a term of one year or to both such fine and imprisonment.
The Fund and the refund of any contribution made under this Act shall be exempted from payment of income tax.
The Federal High Court shall have jurisdiction to try all offences under this Act.
The Minister may, on the recommendation of the bank, make such regulations as may be necessary for the implementation of this Act.
In this Act, unless the context otherwise requires—
“Bank” means the Federal Mortgage Bank of Nigeria;
“Contributions” means deductions made from the basic monthly salaries of workers in accordance with the provisions of this Act;
“Contributor” means a worker from whose basic salary or income deductions are made and paid into the Fund in accordance with the provisions of this Act;
“Minister” means the Minister charged with responsibility for housing;
“Mortgage institution” means a mortgage institution licensed under the Mortgage Institutions Act;
“Retail mortgage lending” means the system of lending money to contributors by mortgage institutions under this Act or under any regulations made thereunder;
“Wholesale mortgage lending” means the system of lending money to mortgage institutions under this Act, or regulations made thereunder;
“Worker” means an employee to whom salaries are paid and includes a self-employed person who derives income from his employment.
This Act may be cited as the National Housing Fund Act.
NATIONAL HOUSING FUND ACT