PenOp woos employees to use 25% of RSA for homeownership

Cynthia Ezekwe

With a mission to empower Nigerian citizens to achieve their dreams of homeownership, Oguche Agudah, the chief executive officer of Pension Fund Operators Association of Nigeria (PenOp), has urged employees to utilise 25 percent of their Retirement Savings Account (RSA) to secure mortgages.

Demonstrating a commitment to unlocking the doors of homeownership in Nigeria, the Pension Fund Operators Association of Nigeria (PenOp) held a webinar with a title that spoke volumes about their intentions: “Getting A Mortgage Just Got Easier and Affordable: How the 25 percent Mortgage & the National Housing Fund Can be Accessed.”

In the face of the ever-soaring costs of building materials and the consequent elusiveness of home ownership for many Nigerians, Agudah issued a timely and potent appeal, imploring employees to make strategic use of the 25 percent of their RSA balance for mortgage purposes. Agudah underscored the criticality of this action as a vital step toward securing the stability of homeownership, encouraging pension industry employees to seize this opportunity and to transform the funds accumulated throughout their working lives into a lasting investment in their own future.

The call to action comes at a time when the country’s housing market is facing significant challenges, with rising construction costs and affordability issues hindering many individuals’ ability to own their own homes. By encouraging employees to tap into their RSA funds, the PenOp CEO aims to empower them to secure their dream homes despite these challenges.

The 25 percent allocation from an employee’s RSA to secure a mortgage is an initiative that offers an avenue for Nigerians to reach their financial aspirations and attain homeownership. With this provision, individuals are empowered to leverage their accumulated retirement funds to finance their mortgages, ushering in a brighter future of ownership and security.

Acknowledging the immense value of proactive financial planning, Agudah highlighted the importance of embracing available resources to achieve one’s financial aspirations. By focusing on the potential of the 25 percent RSA mortgage allocation, Agudah underscores the crucial need for Nigerians to proactively seek out and utilise these opportunities to attain homeownership. With his endorsement of the initiative, Agudah points to a promising trend in the country’s financial sector, as evidenced by the National Pension Commission’s (PenCom) approval of 4,286 applications valued at N39.8 billion as of May 2024.

Agudah explained that the webinar was designed to arm participants with a deeper understanding of how they can harness a portion of their retirement savings to finance a residential mortgage and how to effectively access the National Housing Fund (NHF) backed mortgage plan.

Simon Ogwu, the chief operating officer/executive director of AG Mortgage Bank Plc, provided attendees of the webinar with a comprehensive overview of the mechanics of a mortgage and the nuances of the National Housing Fund.

In his presentation, Ogwu outlined the contributory requirements for individuals to access the NHF, demystified the fixed interest rates associated with the fund, and explained the calculation of the repayment period, which typically stretches to a maximum of 30 years.He also spoke about the home renovation loan, which is a product under the NHF scheme, to finance an existing home renovation or to improve it.

Sodipe Bababunmi Olutola, group head, benefit administration, Fidelity Pension Managers, spoke extensively about accessing 25 percent of RSA balance for purchase of residential mortgage property, highlighting the objectives of equity contribution by RSA finance for contributors under the contributory pension scheme, as well as the required eligibility criteria for those mortgage lenders.