Kenyans can now borrow up to Sh4 million from the Affordable Housing Fund to develop rural affordable housing units after Parliament approved new regulations.
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.
Lands Cabinet Secretary Alice Wahome.
Photo credit: Dennis Onsongo | Nation Media Group
“Having considered the Affordable Housing Regulations, 2025 (Legal Notice No. 114), the committee recommends that the House approves the regulations,” Samuel Chepkonga, who chairs the committee, said in a report.
House rules require 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 in writing to proceed and publish them in the Kenya Gazette.
Those seeking loans from the Affordable Housing Board will be required to meet a number of stringent conditions.
The Makasembo Housing Project on May 29, 2025, marking a milestone in Kisumu’s affordable housing journey.
Photo credit: Alex Odhiambo | Nation
“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.
Applicants who meet the criteria may submit an electronic application to the Board. They will, however, be required to provide development permission granted by the respective County Executive Member for Lands, a valuation report of the land prepared by a registered valuer, and a priced bill of quantities prepared by a registered quantity surveyor.
Applicants must also submit to the Board a copy of the title deed showing that the land is registered in their name, a copy of the official land search confirming the same, and a declaration that the loan shall be used solely for the development of 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 state.
Homa Bay affordable housing project in this photo taken on May 29, 2025.
Photo credit: George Odiwuor | Nation
“Where an application is successful, the Board shall enter into an agreement with the applicant, credit the amount borrowed to the applicant’s account in accordance with the agreement 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 provides for the imposition of the Affordable Housing Levy on the gross salary of an employee and on the gross income of any other person not subject to an employee levy. The rate is 1.5 per cent, with the employer required to deduct and remit an equivalent amount in addition to the employee’s contribution.
The Affordable Housing Regulations, 2025 seek to operationalise the Act and provide clarity on its implementation.
Specifically, the regulations set out provisions on eligibility, applications, validity, and revocation of exemptions from the levy. They also provide criteria for allocation and reallocation in cases of default, prescribe the requisite deposit for an affordable housing unit, and outline the procedure for changing an allocation.
The rules further stipulate the loan interest rate or administration fee, the process relating to off-take of housing units, and eligibility for entering into agreements to develop institutional housing.
Mukuru affordable housing project units in Nairobi on May 10, 2025.
Photo credit: File | Nation Media Group
Lands, Public Works, Housing and Urban Development Cabinet Secretary Alice Wahome said the regulations were designed to operationalise the Act and achieve 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,” Ms Wahome said in an explanatory memorandum to Parliament.
She noted, however, that implementation of the regulations could present challenges.
“The resultant effect may include an increase in the cost of business, which may adversely impact financially weak enterprises,” she said.
Nonetheless, Ms Wahome argued that the regulations would also create employment opportunities for firms in the real estate sector and related industries, owing to the increased demand for services.
