Draft Affordable Housing Regulations 2024 have been published by the Ministry of Lands, Public Works, Housing and Urban Development which has also put out a notice seeking written comments and input from the public, to be received by April 29th, 2024.
- These draft proposals, among other things, require that the deposit paid by a person who is eligible for allocation of an affordable housing unit will be at the rate of 10% of the sale price.
- A person who is unable to raise a deposit may apply for deposit assistance from the Affordable Housing Fund Board.
- These draft rules now open the way for the Government’s Affordable Housing Plan, which has been bogged down by legal hurdles and protests from the public.
Key Highlights of the Draft Regulations
The Draft says a person shall be eligible for deposit assistance if the monthly income is below KSh 20,000, demonstrates that the affordable housing unit to be purchased shall be their primary residence, and that the estimated monthly repayment for the purchase of the affordable housing unit is less than 30% of the applicant’s monthly income.
The Draft regulations also state that where a person defaults for four consecutive months, the affordable housing unit will be repossessed and reallocated to another eligible person. Other options include changing the person’s affordable housing unit to a lower-value unit or entering into a restructuring arrangement with the person in default.
The draft puts restrictions on a purchaser who will not sell their affordable housing unit until 8 years after completion of payment of the agreed price has lapsed. These rules do not apply to the purchase of an affordable housing unit through a mortgage.
An application for a rural affordable housing unit is to be made, in writing, to the Affordable Housing Fund Board, accompanied by building plans approved by the respective county government; a valuation report of the land issued by the chief government valuer or a registered valuer; a priced bill of quantities prepared by a registered quantity surveyor; and a copy of the title to the land and official search of the land as proof of ownership of the land.
The Board will consider the application where the applicant has an operational voluntary savings account with the Fund; the applicant satisfies the Board that the mortgage will be solely used for the development of the affordable housing unit; the amount applied for does not exceed KSh 4 million.
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