30 Sep Owning an AMDC Home with your Pension Savings
Everyone wants to own a home in Nigeria, however, there are financial bottlenecks that often limit homeownership in the current economy. People would rather rent a house than buy one, with the belief that renting is a much cheaper option. A report published by BusinessDay Newspaper estimates that 80% of the country’s population live in rented accommodation, that is, a whooping 160million out of the estimated 200million Nigerians.
Creating a means of accessing retirement funds before the stipulated time to secure a home is a well-thought-out move by the Federal Government that many Nigerians will buy into. This new development, which took effect on Friday, September 23, 2022, allows RSA holders, to access 25% of their Retirement Savings Account (RSA) balance as payment of equity to secure a residential mortgage. Yes! this is indeed good news for those with active RSAs.
According to the National Pension Commission, money in the RSA can only be accessed in the following cases; retirement, prolonged unemployment, extreme medical liability, and of course the recently added, acquisition of a residential mortgage.
To access 25% of your RSA, you need to obtain a property offer letter from a developer and get it certified by a recognised primary mortgage bank or commercial bank (with their mortgage offer letter) before proceeding to Pension Fund Administrator (PFA). Here are some important things to note:
- The maximum RSA amount that can go towards your equity contribution 25% of your balance
- If you had previously withdrawn from your RSA for any reason, you would be required to fill out a consent form as part of the requirements to access the 25% you need
- Your mortgage lender must be licensed by the Central Bank of Nigeria with a valid pension clearance certificate (you can check for a list of licensed mortgage banks in Nigeria)
- To be eligible for this, you must have an offer letter for the property duly signed by the property owner and verified by the mortgage bank
- You can only access this fund if your RSA has received contributions from both the employer and yourself for a cumulative period of 60months (Five Years)
- You are not entitled to this if you have less than 3 years to your retirement
- Married couples can apply jointly, however they must individually satisfy all requirements
- If you opened your RSA before July 2019, you should have your details updated through your PFA
- If the 25% from your RSA is less than the required equity contribution for the property, you are required to pay the difference to the property owner and present proof of the payment before getting the 25% of your RSA balance
- If your 25% RSA is more than the required equity contribution for the property, your PFA will only pay the required amount
- Micro Pension contributors are also eligible for this offer
- This option can be activated only once and on one property so ensure to use it judiciously.
If you want to secure a home through this means, you will most likely require some guidance from your PFA, Mortgage lender, or the property owner in other to make the process seamless. It is much easier to get this done when you purchase from a property owner with apt knowledge about mortgages and who also offers this service to their client. Alpha Mead Development Company (AMDC) offers an array of mortgages from various mortgage partners with unbeatable interest rates, which also comes with end-to-end processing done by an in-house mortgage team that assures a stress-free process. For more information kindly send an email to email@example.com or chat with us on WhatsApp at 07019999343 to get started.