Joy Agwunobi
The Contributory Pension Scheme (CPS) recorded a significant milestone in the second quarter of 2024 as 2,491 Retirement Savings Account (RSA) holders sought access to a portion of their savings to fund equity contributions for residential mortgages.
According to the National Pension Commission’s (PenCom) report on Requests for Equity Contribution for Residential Mortgage, 2,305 applications were approved, totaling N18 billion. However, 186 applications were declined due to incomplete or incorrect documentation.
Of those approved, 631 applicants were from the private sector, while the majority, 1,674, came from the public sector. Since the scheme’s inception in November 2022, it has enabled 5,861 workers to access ₦47.12 billion for residential mortgages, underscoring the growing reliance on this initiative for homeownership.
The commission noted that RSA holders looking to use up to 25 percent of their balances for residential mortgages must adhere to specific steps outlined. The process includes collaboration between property owners, mortgage lenders, and Pension Fund Administrators (PFAs).
Applicants must first obtain a property offer letter from an approved seller or agent. Next, they complete a mortgage application form provided by the lender. This form includes critical details such as: RSA holder’s full name and PIN; Property details, including value and type; Spouse’s information for joint mortgages (if applicable).
Step 3: Lender Verification
The mortgage lender reviews the application, verifying the property’s valuation and the authenticity of the offer.
Step 4: Request RSA Statement
Applicants then request their RSA statement from their PFA to validate the withdrawal. Joint applicants must independently request statements from their respective PFAs.
Step 5: Equity Contribution Validation
If 25 per cent of the RSA balance covers the required equity contribution, the lender issues a mortgage offer letter. If not, the applicant must pay the shortfall before receiving the offer letter.
Step 6: Submit Required Documents
The mortgage lender forwards the verified documents to the applicant’s PFA, including: Mortgage application form; Property offer letter; Loan details and equity contribution requirements
Step 7: Final PFA Approval
The PFA reviews the application to ensure it meets regulatory requirements, ensuring the withdrawal amount does not exceed 25 per cent of the RSA balance. Once validated, the PFA processes the payment through PenCom.
The RSA-backed mortgage scheme is transforming the housing landscape in Nigeria, offering workers a practical way to achieve homeownership. Since its launch, it has disbursed over ₦47 billion, emphasising its role as a critical tool in addressing housing challenges. Applicants are reminded to ensure all documentation is accurate to avoid delays or rejection during the approval process.
