Kenyans building homes in rural areas may soon have access to new financing opportunities following the approval of the Affordable Housing Regulations, 2025 by both the National Assembly’s Committee on Delegated Legislation and the Senate.
The regulations, developed by the Ministry of Lands, Public Works, Housing and Urban Development under Cabinet Secretary Alice Wahome, are designed to make home ownership more accessible, particularly for low- and middle-income families outside major cities.
Key Highlights of the Regulations
1. Access to Loans of up to KSh 4 Million
Eligible Kenyans will be able to borrow up to KSh 4 million under the Affordable Housing Fund, with subsidised interest rates intended to make repayment more manageable. Loans will run for up to 25 years, at an interest rate of 3%, compared to the current market average of about 15%.
2. Lower Deposit for Government Housing Units
The deposit required to secure a unit under the government’s affordable housing programme will drop from 10% to 5%, easing entry for first-time homeowners.
3. One-Time Allocation Rule
Each applicant can only benefit once from the programme, with allocations tied to a single national ID. Beneficiaries will also be barred from selling their allocated houses for at least eight years, to prevent speculative flipping.
4. Encouraging Long-Term Value Creation
Senator Danson Mungatana compared the initiative to Nairobi’s Buruburu housing scheme of the 1970s, where initial low repayments eventually translated into valuable property assets. The same long-term wealth-building potential is envisioned under the new framework.
Eligibility and Application Conditions
To access financing, applicants must meet several requirements:
- Proof of Savings: Applicants must show voluntary contributions to the Affordable Housing Fund.
- First-Time Beneficiaries: Those who already own an affordable housing unit will not qualify.
- Supporting Documentation: Applicants must submit:
- Development permission from the County Executive in charge of Lands
- A valuation report from a registered valuer
- A priced bill of quantities from a registered quantity surveyor
- A registered title deed and official land search confirming ownership
- A declaration that the loan will be used exclusively for housing development
Applications can be made electronically, but physical documentation will be required for verification.
Implementation Process
According to parliamentary rules, once the Committee on Delegated Legislation approves draft regulations, the Clerk of the National Assembly must formally notify the regulation-making authority. The Ministry will then proceed to publish the regulations in the Kenya Gazette, paving the way for implementation.
What This Could Mean for Kenyans
The Affordable Housing Regulations, 2025, represent a significant policy step. By reducing interest rates and deposit requirements, the government is attempting to bridge the financing gap that has long excluded rural and middle-income families from home ownership.
However, the programme’s success will largely depend on:
- Transparent execution and monitoring
- Ability to manage defaults effectively
- Collaboration with financial institutions for loan administration
If well implemented, the framework could unlock long-term benefits similar to past successful housing projects. But as with any government-led credit scheme, the real test will be in governance and sustainability.
