National Assembly approves regulations for Sh4 million affordable housing loans for rural homes
If an application is approved, the Board will enter into an agreement with the applicant, credit the borrowed amount to the applicant’s account after registering a charge in favour of the Board, and notify the applicant to take out life insurance cover for the loan advanced.
Parliament has approved new regulations allowing Kenyans to access loans of up to Sh4 million from the Affordable Housing Fund to build rural housing units, in a move aimed at operationalising the Affordable Housing Act, 2024.
The move comes after the National Assembly’s Committee on Delegated Legislation cleared the draft Affordable Housing Regulations, 2025, developed by the Ministry of Lands, Public Works, Housing and Urban Development under Cabinet Secretary Alice Wahome.
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“Having considered the Affordable Housing Regulations, 2025 (Legal Notice No. 114), the committee recommends that the House approve the regulations,” Samuel Chepkonga, who chairs the committee, said in a report.
House rules require that once the committee tables its report approving the draft regulations, the Clerk of the National Assembly must notify the regulation-making authority in writing to proceed and publish them in the Kenya Gazette.
Those seeking loans from the Affordable Housing Board will be required to meet several stringent conditions.
“A person is eligible to apply for a loan for the development of a rural affordable housing unit if that person has made voluntary savings with the Fund, has not been allocated an affordable housing unit, and has met the eligibility criteria specified in Regulation 3,” the regulations state.
“The loan amount credited to a successful applicant shall not exceed four million shillings.”
Applicants who meet the criteria may submit an electronic application to the Board, but must provide development permission granted by the relevant County Executive Member for Lands, a land valuation report prepared by a registered valuer, and a priced bill of quantities from a registered quantity surveyor.
They must also submit a copy of the title deed confirming land ownership, an official land search, and a declaration that the loan will be used exclusively for developing a rural affordable housing unit.
“When determining an application, the Board may consider whether the applicant has an operational voluntary savings account with the Fund, and whether the applicant has the ability to repay the amount applied for,” the regulations add.
If an application is approved, the Board will enter into an agreement with the applicant, credit the borrowed amount to the applicant’s account after registering a charge in favour of the Board, and notify the applicant to take out life insurance cover for the loan advanced.
The Affordable Housing Act, 2024, introduced a levy of 1.5 per cent on the gross salary of employees and on the gross income of any other person not subject to an employee levy. Employers are required to deduct and remit an equivalent amount in addition to the employee’s contribution.
The Affordable Housing Regulations, 2025, provide clarity on the implementation of the Act, covering eligibility, applications, validity, and revocation of exemptions from the levy. They also outline criteria for allocation and reallocation in cases of default, deposit requirements, procedures for changing allocations, the loan interest rate or administrative fee, off-take processes for housing units, and eligibility for institutional housing agreements.
Lads Cabinet Secretary Alice Wahome said the regulations were designed to ensure the progressive realisation of adequate and affordable housing.
“The Act requires the Cabinet Secretary to develop and submit to Parliament the proposed Affordable Housing Regulations, 2025, within 30 days of the Act’s commencement,” Wahome said in an explanatory memorandum to Parliament.
She also acknowledged potential challenges in implementing the rules.
“The resultant effect may include an increase in the cost of business, which may adversely impact financially weak enterprises,” she noted.
However, Wahome said the regulations would create economic opportunities.
“The regulations will also create employment opportunities for firms in the real estate sector and related industries, owing to the increased demand for services,” she added.
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