In accordance with Section 89 (2) of the Pension Reform Act 2014 (PRA 2014), the National Pension Commission (PenCom) released guidelines on the utilisation of Retirement Savings Account (RSA) balances as equity contributions for residential mortgages.
Here’s the documentation required and the procedures to access the funding.
Application and documentation process
The application and documentation process shall be as follows:
The applicant shall obtain a property offer letter from the property owner or approved agent and approach a Mortgage Lender.
The applicant shall fill out an application for a mortgage, which shall be provided by the Mortgage Lender and attach the property offer letter.
The application form shall contain the following minimum information:
Full name of the RSA holder
PIN of the RSA holder
Name of the Mortgage Lender
Value of the property
Name of his/her spouse (if it is a joint mortgage)
Evidence of marriage (If it is a joint mortgage)
PIN of his/her spouse (If it is a joint mortgage)
PFA of his/her spouse (If it is a joint mortgage)
Amount of equity payable by each applicant in a joint application
The Mortgage Lender shall review the application form and verify the genuineness of the property offer.
The Mortgage Lender shall do its due diligence to ensure that the property has a valuation report.
Upon confirmation of the property offer letter, the applicant shall approach his/her PFA and request for his/her RSA Statement for the purpose of accessing the 25% of his/her RSA balance for payment of equity contribution.
In a joint application, each party shall apply to their respective PFAs with copies of the verified property offer letter.
The PFA shall issue a duly endorsed RSA statement to the applicant, which the applicant shall forward to his/her Mortgage Lender.
The PFA shall update the record on Applications for Equity Contribution for Residential Mortgages upon issuing the RSA Statement to the RSA holder.
Upon receipt of the duly endorsed RSA statement, the Mortgage Lender shall verify if 25% of the applicant’s RSA balance will be sufficient as an equity contribution.
Where 25% of the RSA balance is sufficient as equity contribution, the Mortgage Lender shall issue a mortgage offer letter to the applicant.
Where 25% of the RSA balance(s) is not sufficient, the Mortgage Lender shall request the payment of supplementary equity contribution from the applicant(s).
Upon confirmation of payment of supplementary equity contribution, the Mortgage Lender shall issue a mortgage offer to the applicant(s).
Within two working days of the issuance of the mortgage offer letter to the applicant(s), the Mortgage Lender shall forward a copy of the mortgage offer letter and the under-listed documents/ additional information to the applicant(s) PFA:
Copy of the mortgage application form
Verified property offer letter, which should contain, at the minimum, the value of the property, type of property and address of the property III. Loan amount
Equity contribution required.
Bank account details of the applicant with the Mortgage Lender
Indemnity by the Mortgage Lender to the PFA on the use of the equity contribution.
Evidence of payment of difference where 25% of RSA cannot cover the equity required.
The applicant may after two working days of receiving his/her mortgage offer letter, approach his/her PFA to request for payment of his/her Equity Contribution for Residential Mortgage.
The applicant shall obtain and fill an Application Form, with indemnity to the PFA, for the payment of his/her Equity Contribution for Residential Mortgage.
In a joint application, each party shall apply to their respective PFAs with a copy of the mortgage offer letter.
The application form shall contain the following minimum information:
Full name of the RSA holder and RSA PIN
Type of mortgage (single or joint mortgage)
Full name and address of the Mortgage Lender
Name and address of the property
The type of property e.g., 1,2,3…. Bedrooms, Bungalow, Semi-detached or detached.
Total value of the property
The total value of the RSA balance as at date of applying for the RSA Statement
Equity amount which shall be equal to or less than 25% of the RSA balance
Name of the spouse and RSA PIN (for a joint mortgage only) X. Name of the spouse’s PFA (for a joint mortgage only)
The amount of equity payable by each party in a joint application
Evidence of supplementary payment where 25% of the applicant’s RSA balance is below the required equity contribution for his/her residential mortgage.
The PFA shall review the application form and the supporting documents received from the Mortgage Lender for completeness using a checklist of requirements stipulated in 14 above within two working days.
Upon successful completion of the documentation review, the PFA shall update the applicant’s Mandate File within two working days.
If any exceptions or discrepancies are identified during the documentation review, the PFA shall communicate the exceptions to the Mortgage Lender within two working days of identifying such exceptions.
The PFA shall compute and validate that the requested amount is not more than 25% of his/her RSA Balance.
The PFA shall then process the application and forward same to the Commission within two working days of successful documentation review as in 20 above.
Approval of equity contribution and notification
The approval process shall be done within five working days of the receipt of such request from the PFA as follows:
Upon receipt of the application from the PFA, The Commission shall review the request and confirm that the requested amount is not more than 25% of the RSA and grant approval or decline within three working days.
The Commission shall communicate approval or decline to the PFA within one working day that such approval or decline was granted.
The PFA shall notify the RSA holder within one working day of receiving approval or decline from the Commission.
Where a request is declined by the Commission, the PFA shall inform the Applicant, within one working day that the request has been declined, stating the reasons for the decline.
Upon receipt of the approval of the Commission, the PFA shall notify the Mortgage Lender of the approval of equity contribution and shall request for the true certified copies of the following documents:
Confirmation of title of property.
Confirmation of availability of the property.
Insurance policies cover default, replacement, or reinstatement costs of the property in case of any unforeseen circumstances.
The valuation of the property is carried out by a licensed, independent Valuer who is a member of the Nigerian Institute of Estate Surveyors & Valuers (NIESV).
Further to 5 above, the Mortgage Lender shall conduct its due diligence and thereafter issue a notification of readiness for disbursement to the PFA.
Remittance of approved equity contribution
Upon receipt of the documents stated in 5 above and notification of readiness for disbursement by the mortgage lender, the PFA shall remit the approved equity contribution into the applicant’s account with the Mortgage Lender within four working days.
The PFA shall issue a payment instruction to its PFC to remit the approved amount to the Applicant’s account with the Mortgage Lender within two working days.
The PFC shall remit the approved amount for equity contribution to the applicant’s account with the Mortgage Lender within two working days upon receipt of the PFA’s instruction.
For joint application, the PFA of each applicant shall issue a payment instruction to its PFC to remit the approved amount to the applicant’s account with the Mortgage Lender within two working days.
Upon receipt of the equity contribution, the Mortgage Lender shall issue a confirmation letter to the PFA, confirming receipt of the equity contribution within one working day of the receipt of the equity contribution.
Termination of application and refund of equity contribution
The Mortgage Lender shall notify the Commission in the event of foreclosure of the mortgaged property.
In the event of the death of any RSA holder in a joint application before the execution of the “Deed of Assignment”, the surviving partner shall have the following options:
Proceed with the mortgage application until termination where cash flow is considered adequate.
Terminate the application where cash flow is considered inadequate.
Downscale the property to a smaller property that will accommodate the cash flow of the surviving partner. In this instance, the applicant will start the application process afresh.
Where the RSA holder or the Mortgage Lender cannot continue with the mortgage for any reason before the mortgage loan is approved and disbursed, the party that decides not to continue shall notify the PFA within one working day of arriving at such decisions.
If the property that has been presented becomes unavailable before the mortgage is approved and disbursed, the Mortgage Lender shall notify the applicant and the PFA within one working day of determining the unavailability of the property.
Where the RSA holder or the Mortgage Lender could not continue with the mortgage for any reason before the execution of the “Deed of Assignment”, the Mortgage Lender shall refund the equity contribution to the PFC within two working days after which such decision was made.
Seize this remarkable opportunity as an RSA holder to turn your homeownership aspirations into reality. Make the most of this chance to fulfil your dream of owning a home. Contact your PFA to commence the process.
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