Public university staff seeking car loans and mortgages under the 2026 scheme will have to meet a set of conditions, including providing property or vehicle ownership documents, taking out insurance and agreeing to repayment terms tied to their job grades.
The scheme sets a maximum repayment period of five years for car loans and 20 years for mortgages. It also provides for an interest rate of 3 per cent per annum on a reducing balance, while borrowers will be required to meet additional processing, legal and insurance costs.
Under the car loan requirements, applicants must submit an original sale agreement prepared by an advocate, a vehicle valuation report accompanied by a photograph, a logbook and a motor vehicle search certificate.
Applicants must also provide their Kenya Revenue Authority personal identification number and, where applicable, a proforma invoice and proof of deposit.
Borrowers will be responsible for processing fees, transfer charges and other related costs. The scheme also restricts staff members to one car loan at a time.
Conditions for University Staff Car Loans
Vehicles acquired through the scheme will be jointly registered in the names of the borrower and the financing institution. The institution will retain the logbook until the loan is fully repaid.
Applicants must also obtain comprehensive insurance for the vehicle.
Once a borrower clears the loan, the institution will issue a discharge certificate and notify the Registrar of Motor Vehicles to facilitate the transfer of ownership.
The maximum amount a staff member can borrow will depend on their job grade.
Employees in grades 19 and 20 can access up to KSh5 million, while those in grades 15 to 18 qualify for up to KSh4 million.
Staff in grades 12 to 14 can borrow up to KSh3 million, while those in grades 8 to 11 have a limit of KSh1.5 million.
The limit falls to KSh800,000 for grades 3 to 7 and KSh600,000 for grades 1 and 2.
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Mortgage Conditions for University Staff
Staff applying for mortgages will be required to submit documents depending on the purpose of the loan.
Applications for property purchases must include a sale agreement or evidence of ownership, a title search, a valuation report and a letter of offer, where applicable.
Those seeking financing for construction, renovation or repairs will need approved building plans and bills of quantities. Applicants may also be asked to provide additional documents requested by the financing institution.
The scheme allows mortgage financing for buying a residential property, acquiring land for a home, constructing a house, renovating or improving a property, taking over an existing mortgage and equity release.
Borrowers will pay processing fees, stamp duty, legal fees and other related costs. Legal transactions must be handled by an advocate of the High Court of Kenya.
Staff members will not be allowed to hold more than one mortgage under the scheme at a time.
For leasehold properties, the remaining lease period must extend at least 45 years beyond the date the mortgage is due to be fully repaid.
Mortgage Limits and Repayment Period
The maximum mortgage amount will also depend on the employee’s job grade.
Staff in grades 19 and 20 can borrow up to KSh25 million, while those in grades 15 to 18 have a limit of KSh20 million.
Employees in grades 12 to 14 can access up to KSh15 million, while grades 8 to 11 qualify for up to KSh10 million.
The limit is KSh6 million for grades 3 to 7 and KSh4 million for grades 1 and 2.
Mortgage repayments will run for a maximum of 20 years, with the financing institution registering a charge against the property as security for the loan.
The borrower will be required to maintain the property, pay land rates and rent where applicable, and meet insurance obligations.
Mortgage protection and fire insurance will be mandatory, with the borrower responsible for the premiums. The financing institution will retain the original property documents until the loan is cleared.
Borrowers will also need written consent from the financing institution before selling the property, transferring possession, creating another charge or surrendering a lease.
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What Happens if a University Staff Member Defaults?
The scheme sets out measures that financing institutions can take when a borrower fails to meet their obligations.
After a default, a three-month grace period will apply before the recovery process proceeds under the stated conditions. The institution may repossess and sell the secured asset to recover the outstanding balance.
For motor vehicles, the scheme provides for repossession within 30 days and disposal after a further 30 days.
For mortgages, the financing institution may call in the loan and sell the property through an auction or private treaty in cases covered by the scheme.
The rules also address changes in employment. Staff members who leave public service for reasons other than disciplinary action will remain subject to the existing loan terms, unless they default.
Those who leave on disciplinary grounds will move to commercial loan terms after six months, according to the scheme.
Members of the Fund Management Committee and its staff will not be allowed to buy property repossessed under the scheme.
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