The government has unveiled new regulations that are set to greatly determine beneficiaries eyeing units in the country’s affordable housing program.
Under these proposed rules, individuals seeking to purchase homes through mortgage financing will now be required to provide proof of income.
This move is aimed at ensuring that applicants possess the financial capacity to meet the loan requirements and secure the housing units they are interested in.
However, this requirement may present a significant hurdle for non-salaried Kenyans, commonly known as ‘hustlers,’ who lack the conventional pay slips that serve as evidence of their income.
“An application for allocation of an affordable housing unit shall be accompanied by; the deposit payable at the rate of 10 percent of the purchase price; proof of identification; a list of beneficiaries to the applicant; proof of income and ability to pay for the loan; a passport size photo of the applicant,” read the 2024 Affordable Housing Regulations draft.
Rules on Sale of the Affordable Housing units
Moreover, the draft regulations also outline additional guidelines that potential homeowners need to be aware of.
One key provision states that purchasers are prohibited from selling their affordable housing units until eight years have elapsed after completing the payment of the agreed price.
Section 31 (1) of the 2024 Affordable Housing Regulations Draft states that, “For purposes of Section 54 of the Act, a purchaser shall not sell their affordable housing unit until eight years after completion of payment of the agreed price has lapsed.”
Also Read: Kenyans to Pay Ksh200 to Activate Affordable Housing Account
Furthermore, individuals who acquire their affordable housing units through mortgage agreements are explicitly restricted from being eligible to sell these units.
Additionally, the draft also notes that in cases where a buyer intends to sell their affordable housing unit after the designated eight-year period has passed, they will be required to offer the Affordable Housing Board the right of refusal before listing the unit for sale.
“A purchaser of an affordable housing unit who intends to sell or agrees to sell the unit or any interest therein to any other person shall seek the consent of the Board in accordance with section 54 of the Act.” reads section 31 (1).
This stipulation ensures that the board is granted priority as a potential buyer whenever an owner decides to sell a unit.
More Regulations
Additionally, Kenyans who make purchases of the affordable housing unit through mortgage financing and fall behind on scheduled payments for four consecutive months will be considered in default, as outlined in section 13 of the Draft Regulations.
In such a scenario, the individual will be presented with three options to address the default situation.
Also Read: Family Issues Demands After Accident in Affordable Housing Project
Also, individuals seeking mortgage financing from the Affordable Housing kitty for constructing a rural home, as per Section 52 (4, b) of the Affordable Housing Act 2024, may face a borrowing limit of Ksh4 million if the current proposal is approved.
Furthermore, the regulations suggest setting the interest rate for financing from the affordable housing kitty at nine percent per annum.
These regulations mark a significant step towards ensuring the success of the affordable housing initiative, setting a clear framework for participation and ownership within the program.
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