Kenyans to access loans of up to KSh 4m for rural homes after MPs approve new rules
- Kenyans building homes in rural areas will soon be able to access cheap loans following the approval of the Affordable Housing Regulations, 2025
- The loans will be disbursed under the Affordable Housing Fund at a subsidised interest rate of 3% for up to 25 years
- The regulations lower the deposit for government housing units from 10% to 5%, and introduce new rules
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Elijah Ntongai, an editor at TUKO.co.ke, has over four years of financial, business, and technology research and reporting experience, providing insights into Kenyan, African, and global trends.
Kenyans building homes in rural areas will soon access loans of up to KSh 4 million.
Source: Twitter
This follows the approval of draft Affordable Housing Regulations, 2025 the National Assembly’s Committee on Delegated Legislation.
The committee cleared the draft regulations developed by the Ministry of Lands, Public Works, Housing and Urban Development, under Cabinet Secretary Alice Wahome.
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"The affordable housing programme, including the eligibility criteria for allocation of housing units, the procedural guidelines for offtake and financing, voluntary savings, institutional housing, interest rates applicable for loans, and other administrative procedures to support the realization of the right to accessible and adequate housing under Article 43(1)(b) of the Constitution," the chair of the National Assembly’s Committee on Delegated Legislation, Samuel Chepkonga, stated in the report.
The report stated that the new regulations are designed to ease home ownership in villages and smaller towns, where access to financing has long been a barrier for low- and middle-income families.
According to the regulations, the loans will be disbursed under the Affordable Housing Fund and will attract subsidised interest rates to make repayments manageable.
Applicants will be required to meet eligibility criteria, including proof of land ownership and compliance with building standards.
Approval of the Affordable Housing Regulations, 2025
On August 14, Chepkonga moved a motion for the National Assembly to adopt the committees' report on Affordable Housing Regulations, 2025.
The new regulations were also passed by the Senate Committee on Delegated legislation.
Senator Danson Mungatana said that the newly approved Affordable Housing Regulations will significantly ease home ownership for Kenyans by providing financing at an interest rate of 3% for up to 25 years, compared to the current 15% charged in the mortgage market.
The regulations will also reduce the deposit required to secure a unit of the governments affordable housing units from 10% to 5% and stipulate that allocations can only be made once in a lifetime using a single ID.
The new regulations will also barr beneficiaries from selling their allocated houses for at least eight years.
Mungatana urged Kenyans to seriously consider the programme’s long-term benefits and drew parallels with the Buruburu housing scheme of past decades, where initial monthly payments of KSh 3,000 later seemed negligible as property values increased.
The National Assembly rules stipulate that once the Committee on Delegated Legislation tables its report approving the draft regulations, the Clerk of the National Assembly must notify the regulation-making authority to proceed and publish them in the Kenya Gazette.
Conditions to access the loan
Under the Affordable Housing Regulations, those seeking loans from the Affordable Housing Board must meet stringent conditions.
These include proving they have made voluntary savings with the Affordable Housing Fund, have not previously been allocated an affordable housing unit, and meet the eligibility criteria outlined in Regulation 3, which caps loans at a maximum of KSh4 million.
Eligible applicants may apply electronically but must provide several documents, including development permission from the County Executive Member for Lands, a valuation report by a registered valuer, and a priced bill of quantities prepared by a registered quantity surveyor.
Additionally, applicants must submit a title deed registered in their name, an official land search confirming ownership, and a declaration that the loan will be used solely for building the housing unit.
According to CS Wahome’s explanatory memorandum to Parliament, the Act requires the Cabinet Secretary to develop and table the proposed Affordable Housing Regulations, 2025 within 30 days of the Act’s commencement.
What is the cost of building a house in Kenya?
In other news the cost of building a house in Kenya in 2025 has significantly increased compared to 2024 due to rising prices of materials, labour, and land.
Earlier, TUKO.co.ke reported that estimates ranged between KSh 48,750 and KSh 122,860 per square metre depending on finishes.
A standard three-bedroom home now costs between KSh 3.5 million and KSh 9.5 million, while luxury builds can exceed KSh 12 million.
Nairobi remains the most expensive location, with construction costs up to 30% higher than the national average, whereas rural areas are more affordable though transport costs for materials can push expenses up.
Source: TUKO.co.ke
