“NHF” is one of the most confusing lines on a Nigerian payslip. Some workers have it deducted for years without knowing what it is. Others have never seen it. This guide explains the National Housing Fund in plain language: who must contribute, how much, what you can get from it, how refunds work, and how the 2023 change to the law affects private sector workers.
What is the National Housing Fund?
The National Housing Fund (NHF) was created by the National Housing Fund Act No. 3 of 1992. Its stated aims include mobilising funds to provide affordable houses for Nigerians and ensuring a steady supply of long-term housing loans to contributors (NHF Act, sections 1–2). The fund is managed by the Federal Mortgage Bank of Nigeria (FMBN), which lends through primary mortgage banks to contributors who want to buy, build or improve a home.
How much do you contribute?
Section 4 of the Act sets the contribution at 2.5% of basic monthly salary. It is calculated on basic salary, not your full gross pay. So if your basic is ₦150,000, the contribution is ₦3,750 a month, even if your housing and transport allowances push your gross pay much higher.
The Act also states that contributions earn interest at 4% per year. That is low compared with Nigeria’s recent inflation, so NHF is best understood as a route to a housing loan, not as a savings product.
Employers deduct the contribution at source and must remit it to FMBN within one month of the deduction (section 9). Self-employed people are expected to remit their own contributions (section 10).
Is NHF compulsory? The 2023 change
This is where much of the confusion comes from. The original Act required most workers to contribute. The Business Facilitation (Miscellaneous Provisions) Act 2023 amended section 4. According to a client alert by Templars law firm:
- Public sector employees earning the national minimum wage or above must still contribute.
- Self-employed individuals are required to contribute.
- Private sector employees are no longer compelled to contribute and may do so voluntarily.
The same alert notes that the Nigeria Employers’ Consultative Association (NECA) advised member companies that employees could choose to opt out or continue. If you work for a private company and still see NHF on your payslip, it may be because nobody asked you to choose. You can raise it with HR.
What do you get for contributing?
The main benefit is access to an NHF mortgage loan through a primary mortgage bank. FMBN’s own published conditions change over time, so always check its website or a mortgage bank before planning around them. Commonly stated conditions include:
- You must have contributed for at least six months before applying.
- Repayments must be affordable relative to your income (lenders often look at what share of your income the repayment takes).
- The loan is for a residential house, not for buying bare land.
- NHF loans can usually be accessed once in a lifetime.
Some mortgage banks publish NHF product pages listing a loan ceiling and requirements, such as FHA Mortgage Bank’s NHF page. Treat any figure you find as a guide and confirm the current ceiling and interest rate with the bank before you commit.
How to check your NHF contributions
- Find your NHF number. It may be on your payslip, or HR can give it to you. Without it, contributions can be hard to trace.
- Use FMBN’s contributor channels. FMBN runs an online contributor portal and has branch offices where you can request a statement.
- Compare with payslips. Add up the NHF deductions on your payslips for a year and compare with the statement. Gaps may mean your employer deducted but did not remit.
Can you get your NHF money back?
Section 20 of the Act, as summarised in the Templars alert, says a contributor who has not taken an NHF housing loan is entitled to a refund of contributions plus interest if they have:
- reached 60 years of age, or
- retired from employment and become unable to continue contributing.
Refunds are also processed for estates of deceased contributors and in cases of permanent incapacity, through documented procedures. The Act does not clearly cover refunds for a private sector worker who simply opts out under the 2023 amendment, so ask FMBN directly about your case. If you leave the workforce early, keep your NHF number and records safe so you can claim later.
NHF and your tax
Contributions to the National Housing Fund are listed as an eligible deduction under section 30 of the Nigeria Tax Act 2025, so they reduce your chargeable income for PAYE. In practice the saving is modest: at a 15% marginal rate, ₦3,750 of NHF contributions saves about ₦562 of tax a month. Our PAYE guide shows how deductions fit into the calculation.
Should a private sector worker keep contributing?
There is no single right answer. Consider these points:
| Reasons to keep contributing | Reasons to opt out |
|---|---|
| You plan to buy or build a home in Nigeria and want access to an NHF loan. | You have no plan to use an NHF mortgage. |
| You value a forced saving habit. | The 4% interest is well below inflation. |
| It gives a small tax deduction. | You would rather put the money into an emergency fund or investment you control. |
If you opt out, put the same amount somewhere useful rather than letting it disappear into spending. Our emergency fund guide compares savings options, and the Nigerian Salary Budget Planner lets you track the redirected amount as its own savings line.
Practical steps this month
- Check your latest payslip for an NHF line and note the amount.
- Confirm it is 2.5% of your basic salary, not of gross pay.
- Ask HR for your NHF number if it is not shown.
- Request an FMBN statement and compare it with your payslips.
- If you are in the private sector, decide whether to stay in, and tell HR in writing.
Common NHF mistakes
- Not knowing your NHF number, which makes contributions hard to trace later.
- Assuming deductions were remitted without checking a statement.
- Expecting NHF to grow like an investment, when the Act sets interest at 4%.
- Losing records when changing jobs.
Frequently asked questions
Is NHF the same as pension?
No. Pension goes to your Retirement Savings Account with a PFA under the Pension Reform Act. NHF goes to the Federal Mortgage Bank of Nigeria and is linked to housing loans. They are separate deductions with separate rules. See our pension guide.
Is NHF calculated on my gross salary?
No. The Act sets it at 2.5% of basic monthly salary. If your payslip shows 2.5% of gross, ask payroll to check.
Can I use NHF to buy land?
Mortgage banks generally state that NHF loans are not for purchasing land alone. Confirm current rules with FMBN or your mortgage bank.
I changed jobs. Do I lose my contributions?
No. Contributions are linked to your NHF number, not your employer. Give the number to your new employer if you continue contributing.
Can self-employed people join?
Yes. Section 10 of the Act covers self-employed persons, and informal workers can often participate through registered cooperative societies.
This guide is general information based on the sources linked above and is not legal or financial advice. NHF rules, loan ceilings and rates can change. Confirm your position with the Federal Mortgage Bank of Nigeria, a licensed primary mortgage bank or your employer.
Leave a Reply