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RSA Mortgage Equity Contribution Plan
The RSA Mortgage Equity Contribution Plan is a unique offering designed to help employees leverage their Retirement Savings Account (RSA) to contribute toward purchasing a home. Under this plan, employees can access upto 25% of their pension savings to cover a portion of the equity required for a mortgage loan.
benefits
Why Choose Our Mortgage Equity Contribution?
1.
Home Ownership Opportunity
The plan provides an opportunity for employees to use part of their pension savings as a contribution toward purchasing a home, making homeownership more accessible.
2.
Affordable Entry into the Property Market
By utilizing retirement savings to cover a portion of the mortgage equity, employees can reduce the upfront costs typically required for purchasing a home, making home ownership more affordable.
3.
Preserves Retirement Savings
The plan allows employees to maintain the long-term growth potential of their pension funds while helping them achieve home ownership, ensuring a balance between short-term and long-term financial goals.
This initiative empowers employees to turn their retirement savings into an opportunity for home ownership while preserving the long-term growth potential of their pension funds.
RSA Mortgage Equity Contribution Plan Guidelines
An applicant (RSA Holder) must have an offer letter for the property duly signed by the property owner and mortgage lender.
RSA holders that have less than 3 years to retirement are not eligible.
RSA holders that have accessed 25% of their balance prior to the issuance of the guideline are eligible to access another 25% of their balance.
Micro pensions contributors are eligible. The contingent portion of their contributions will be utilized for this purpose. The micro-pension contributor must sign a consent letter with the PFA to that effect.
The applicant must have both RSA contributions (employer and employee) portion remitted for a minimum of 60 months prior to the submission of his application.
The RSA holder must sign a consent letter with the PFA to that effect if he agrees to utilize the contingent value of the VC contributions or the PRE ACT or NSITF benefit as equity.
The RSA holder shall provide necessary documentations to the PFA as stipulated in sections 5.0 of the guideline.
RSA holders that have utilized 25% of their RSA balance as payment of equity contributions towards a residential mortgage can still access 25% of their balance as loss of job benefit payment, in the event of a job loss.
Married couples who are RSA holders can make a joint application on the grounds that they meet the requirements set up in the guideline.
- Written application requesting for 25% equity contribution for 25% Mortgage
- Mortgage withdrawal application form with the PFA
- Mortgage withdrawal application form for Mortgage lender
- Data recapture form
- Property offer letter from the owner showing the address of the building
- Valuation report on the property from licensed estate surveyor and valuers
- Endorsed Retirement Savings account statement from PFA
- Signed letter from the Mortgage Lender stating that 25% of the RSA balance is adequate to offset the Equity Contributions
- If adequate, evidence of the supplementary payment
- Offer letter from the Mortgage Lender
- Confirmation of title and availability of the Property by the Mortgage Lender
- Birth certificate/Declaration of Age
- Bank Account details of the Applicant with the Mortgage Lender with attached Statement of account
- Letter from Employer stating the date of Retirement
- Valid Means of Identification
- Recent Passport Photograph
Other forms
- (i) Completed Indemnity Form from application(s) sworn at the High Court
- (ii) Completed Indemnity Form from the Mortgage Lender
- (iii) Consent Form signed with Mortgage Lender
- (iv) Consent Form signed the PFA
- The applicant shall obtain a property offer letter from the Property Owner.
- Forward same to the mortgage lender.
- An application for mortgage shall be issued by the mortgage lender
- The Mortgage lender verifies the genuineness of the property and ensure it has a valuation report.
- CardinalStone Pensions will issue a duly endorsed RSA statement to the applicant.
- The Client submits the Mortgage application to the Mortgage Lender.
- CardinalStone Pensions ensures the application is okay then sends to PENCOM for approval.
- On approval, CardinalStone Pensions issues instruction to the PFC for remittance of equity contribution to the account of the Customer with the Mortgage Lender.
- CardinalStone Pensions maintains record of applications for equity contribution.
- Render return to the Commission on the payments made in respect of equity contribution on monthly and annual basis.
The National Pension Commission (PenCom) has officially approved guidelines allowing RSA holders to use a portion of their retirement savings to contribute to the equity payment for a residential mortgage. This new initiative aligns with Section 89 (2) of the Pension Reform Act 2014 (PRA 2014).
Eligibility
RSA holders with less than three years until retirement and Micro Pension contributors with fewer than 60 months of contributions prior to application are ineligible.
RSA Record Updates
RSA holders registered before July 1, 2019, must update their records through the RSA Data Recapture Exercise.
Property Offer Letter:
A signed and validated offer letter from the property owner and mortgage lender is required.
Maximum RSA Contribution
Only 25% of the total required RSA balance can be used for the mortgage, regardless of the lender’s requirements.
Mortgage Lender Requirements:
Lenders must participate in the Contributor Pension Scheme, hold a current Pension clearance certificate, and be licensed by the Central Bank of Nigeria (CBN).
For more details on accessing your RSA balance for mortgage purposes, please click here.