For many Nigerians, owning a home is an important financial goal. Yet, raising the equity contribution required to secure a mortgage can often be a major hurdle.
To help bridge this gap, the National Pension Commission (PenCom) introduced guidelines that allow eligible Retirement Savings Account (RSA) holders to access a portion of their pension savings as equity contribution towards securing a residential mortgage.
The initiative is designed to support homeownership among RSA holders while they are still within their working years.
However, there are specific eligibility requirements, limits and conditions that apply.
To help you understand how it works, we have answered some of the most frequently asked questions below:
1. How much of my RSA can I access?
You can access up to 25% of your RSA balance as at the date of application.
However, if the equity contribution required by your mortgage lender is less than 25% of your RSA balance, you can only access the amount required. For example: If your RSA balance is ₦10 million, you can access up to ₦2.5 million. If your lender requires ₦2 million, you can only access ₦2 million.
2. What if 25% of my RSA isn’t enough?
You will be required to provide the balance yourself and provide proof of payment from the mortgage lender before accessing the allowable amount from your RSA. Where applicable, the contingent portion of your Voluntary Contributions may also be utilised.
3. How many times can I access my RSA for this purpose?
An RSA holder can access their pension savings for residential mortgage equity contribution only once in a lifetime. Once you have applied for and accessed your RSA for this purpose through a PFA, you cannot apply again for residential mortgage equity contribution, even if you subsequently transfer your RSA to another PFA.
4. Can I use the money to pay rent or fund an ongoing building project?
No. It is specifically for equity contribution towards the purchase of a residential property through a mortgage lender. It cannot be used for rent payments or ongoing building projects.
5. Can spouses combine their pension savings for a mortgage?
Yes. Spouses who belong to different PFAs can jointly secure a mortgage using their respective RSA balances, provided each spouse independently meets the eligibility requirements and applies separately.
6. Can I still access my RSA for temporary loss of employment after using it for a mortgage?
Yes, provided you meet the applicable requirements for temporary loss of employment. An RSA holder who has previously accessed their RSA for mortgage equity contribution may still be eligible to access 25% of their remaining RSA balance after the required period of unemployment, subject to the applicable conditions.
7. Can I use my Voluntary Contributions as part of my equity contribution?
Yes, where applicable. An RSA holder may utilise the contingent portion of their Voluntary Contributions (VC) as part of the equity contribution, subject to the applicable guidelines governing Voluntary Contributions.
Your retirement may be years away, but the future you are building starts today. With the right planning, your pension can help you take a step closer to owning the home you have always wanted.
If you are considering accessing your Retirement Savings for residential mortgage equity contribution, kindly send an email to info@crusaderpensions.com . You can also click here to check your eligibility.
