Kenyans to get Sh4m rural housing loans under new regulations

By Newsflash Writer

Kenyans will now be able to borrow up to Sh4 million from the Affordable Housing Fund to build rural housing units following the approval of new regulations by Parliament.

The National Assembly’s Committee on Delegated Legislation has cleared the draft Affordable Housing Regulations, 2025, developed by the Ministry of Lands, Public Works, Housing and Urban Development under Cabinet Secretary Alice Wahome.

“Having considered the Affordable Housing Regulations, 2025 (Legal Notice No. 114), the committee recommends that the House approves them,” said Committee Chair Samuel Chepkonga in a report. Once the committee tables its findings, the Clerk of the National Assembly is required to formally notify the regulation-making authority to proceed and publish the regulations in the Kenya Gazette. Those seeking loans will have to meet strict conditions before being considered.

Stringent loan application requirements

According to the rules, an applicant for a rural housing loan must have made voluntary savings with the Fund, not been allocated an affordable housing unit previously, and meet the eligibility criteria under Regulation 3. “The loan amount credited to a successful applicant shall not exceed four million shillings,” the regulations state.

Applicants must apply electronically and provide several documents: development approval from the respective County Executive for Lands, a valuation report of the land by a registered valuer, and a priced bill of quantities from a registered surveyor.

Additionally, they must present a title deed confirming land ownership, an official land search, and a declaration that the loan will be used solely for rural housing development.

The Affordable Housing Board may also assess whether applicants hold an operational voluntary savings account with the Fund and their ability to repay. Successful applicants will be required to sign agreements with the Board, take life insurance cover for the loan, and accept that the Board will register a charge against their property until repayment is complete.

Implementation of the Affordable Housing Act

The Affordable Housing Act, 2024 introduced a levy of 1.5 per cent on employees’ gross salaries and on the gross income of non-salaried individuals. Employers are required to match and remit this contribution. The Affordable Housing Regulations, 2025 are meant to operationalise the law, outlining provisions for eligibility, applications, levy exemptions, allocation, and reallocation in cases of default.

They also detail deposit requirements, loan interest rates or administration fees, and procedures for changing allocations or developing institutional housing.

In her explanatory memorandum to Parliament, CS Alice Wahome said the regulations are aimed at ensuring the progressive realisation of adequate and affordable housing. She, however, cautioned that their implementation may increase business costs, potentially straining weaker enterprises. Despite this, she maintained that the regulations would stimulate job creation in the real estate and construction sectors due to rising demand for services and materials.