NAIROBI, Kenya – Kenyans seeking to build homes in rural areas will now be able to access loans of up to Sh4 million from the Affordable Housing Fund after Parliament approved new regulations to operationalise the Affordable Housing Act, 2024.
The National Assembly’s Committee on Delegated Legislation cleared the Affordable Housing Regulations, 2025 (Legal Notice No. 114), developed by the Ministry of Lands, Public Works, Housing and Urban Development under Cabinet Secretary Alice Wahome.
“Having considered the Affordable Housing Regulations, 2025, the committee recommends that the House approve the regulations,” committee chair Samuel Chepkonga said in a report to Parliament.
The rules provide the framework for loan applications and eligibility criteria for Kenyans hoping to build affordable rural housing units.
Eligibility and Loan Terms
To qualify, applicants must have made voluntary savings with the Fund, must not have previously been allocated an affordable housing unit, and must meet the eligibility criteria outlined in Regulation 3.
The loan amount will not exceed Sh4 million and must be used exclusively for building a rural affordable housing unit. Successful applicants will be required to provide:
- A development permit from the relevant county executive member for lands,
- A land valuation report by a registered valuer,
- A priced bill of quantities from a registered surveyor,
- A copy of the title deed confirming land ownership, and
- An official land search.
The Board overseeing the Fund will also evaluate an applicant’s repayment capacity and require them to take out a life insurance policy for the loan.
Implementation of the Housing Levy
The Affordable Housing Act, 2024, introduced a 1.5% levy on employees’ gross salaries and on the gross income of self-employed individuals, with employers required to match employee contributions.
The 2025 regulations detail how the levy will be managed, exemptions applied, and housing units allocated.
They also spell out procedures for reallocation in case of default, off-take processes, institutional housing agreements, and loan interest rates or administrative fees.
Economic Impact
CS Wahome said the regulations are designed to advance the constitutional right to adequate and affordable housing.
“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 said.
However, she acknowledged possible challenges, including higher business costs that could strain financially weaker enterprises.
