PenCom clears 34 licensed lenders to kick off RSA residential mortgage

Retirement Savings Account (RSA) holders wishing to access 25 percent of their RSA balance to be used for equity contribution towards residential mortgage can now apply to their Pension Fund Administrators (PFAs) as the the National Pension Commission (PenCom) has published a list of 34 approved licensed mortgage lenders (Primary Mortgage Banks) that would help facilitate the process.

This is coming about three months after the Nigerian pension industry regulator approved the issuance and immediate implementation of the Guidelines on Accessing RSA balance towards payment of equity contribution for residential mortgages by RSA holders.

The approved Primary Mortgage Banks (PMBs), according to the list released by PenCom, include Abbey Mortgage Bank Plc, AG Mortgage Bank Plc, Akwa Savings & Loans Limited, Aso Savings & Loans, Brent Mortgage Bank Ltd, Centage Savings & Loans, City Code Savings & Loans, Coop Savings & loans, Delta Trust Mortgage Bank, First Trust Mortgage Bank (FBN/Trustbond merged), FHA Homes Ltd, First Generation Homes, Gateway Mortgage Bank, Global Trust Mortgage, Haggai Mortgage Bank, among others.

Others are Homes Base Mortgage, Imperial Homes, Infinity Trust Mortgage Bank, Jigawa Savings & Loans, Jubilee Life Mortgage Bank, Kebbi State Homes, Lagos Buildings and Investments, Mayfresh Mortgage Bank, MGSL Mortgage Bank Limited, Mutual Alliance, Prudential Mortgage Bank, Nigerian Police Mortgage Bank, Living Trust (formerly Omoluabi), Platinum Mortgage Bank, Refuge Homes Savings & Loans, Resort Savings & Loans, Safetrust Mortgage Bank, STB Building Society, and Union Homes.

After PenCom announced on 23 September 2022 that RSA holders could access 25 percent of their RSA balance for the purpose of residential mortgage contribution in line with Section 89 (2) of the Pension Reform Act (PRA) 2014, urging interested RSA holders to contact their PFAs for more information and guidance, some RSA holders had approached their PFAs but were informed that technically, they could not as yet make applications because PenCom had yet to release the list of approved mortgage lenders.

A mortgage lender is a Primary Mortgage Bank or a commercial bank licensed by the CBN which has residential and commercial mortgage lending as a permissible activity and meets the eligibility criteria specified in the guidelines for RSA for mortgage.

With the release of the approved list of PMBs, RSA holders wishing to do so can now apply to their PFAs for 25 percent of their RSA balance to be used for equity contribution towards residential mortgage.

PenCom had earlier specified that the guidelines on accessing RSA balance for residential mortgage contribution cover pension contributors in active employment, either as a salaried employee or as a self-employed person.

The commission said interested RSA holders (applicants) must, among other things, have an offer letter for the property duly signed by the property owner and verified by the mortgage lender.

According to PenCom, the RSA of the applicant shall have both employer and employee’s mandatory contributions for a cumulative minimum period of 60 months (five years).

It further stipulated that a contributor under the Micro Pension Plan (MPP) is also eligible, provided he/she has made contributions for at least 60 months (five years) prior to the date of his/her application.

According to the guidelines, RSA holders that have less than three years to retirement are not eligible. Also, married couples who are RSA holders are eligible to make a joint application, subject to individually satisfying the eligibility requirements.

In addition, RSA holders, if registered before 1 July 2019, must have their records updated through the RSA data recapture exercise while application for equity contribution for residential mortgage shall be in person and not by proxy.

The maximum amount to be withdrawn shall be 25 percent of the total mandatory RSA balance as at the date of application, irrespective of the value of equity contribution required by the mortgage lender.

Where 25 percent of a contributor’s RSA balance is not sufficient for payment as equity contribution, RSA holders may utilise the contingency portion of their voluntary contributions (if any), the guidelines said.