The government is planning to give civil servants a soft landing for home ownership as they will soon be allowed to pay their mortgage loans up to five years after the official retirement age of 60 in a raft of proposals intended to encourage uptake of the public service mortgage scheme.
The State department of Housing and Urban Development has in also proposed to reduce by half, the value of cash deposit that government workers are required to put down as security to access the State-sponsored home loans.
Under the new proposal, public servants will now be required to deposit five per cent of the value of the property, down from the current 10 per cent. The incentives proposed by the department of housing under the Civil Servants Housing Scheme Fund (CSHSF) are intended to make home loans more accessible to low-income workers.
Data from the ministry shows that the scheme had facilitated 989 civil servants with mortgage loans for construction and purchase worth Sh. 4.474 billion through the Kenya Commercial Bank (KCB) and Housing Finance (HF) Group as at June 30, 2018.
Infrastructure and Urban Development Cabinet Secretary James Macharia has called for a review of regulations governing the scheme to also extend the term for repayment of loans borrowed to put up or purchase houses.
Among the new proposals is to give civil servants the ability to repay their loans up to the age of 65 years, up from the current limit of 60 years.
“To ensure benefits under the scheme are affordable and accessible housing to civil servants, the civil servants housing scheme regulations are proposed for review… to allow those applying for construction loan to utilize the land as their deposit commitment,” Mr Macharia said.
The proposed changes in the scheme’s regulations will also allow applicants to support their ability to repay their loans from other regular reliable sources of income over and above payroll deductions.
The ministry is also exploring the use of Public Private Partnerships (PPPs) in the provision of civil servants’ housing.