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Kenyans will have to wait longer to realize the Affordable Housing Programme according to the second progress report on the Big Four Agenda published recently

The project now faces a critical challenge with funding as the previously reported request for KES 45Bn to capitalize the National Housing Development Fund (NHDF) was not captured in the Budget Policy statement as had been expected.

This means that unlocking the path to 100,000 homes may be further delayed since funds to secure agreements and provide end-user financing through the Partial Credit Guarantee (PCG) program are not available.

In addition, the existing budget for the State Department of Housing and Urban Development was reallocated to other programs according to the report.

The National Treasury has indicated a willingness to provide a letter of support to the AHP Developers and Financiers to see if this will catalyze projects.

However, the end-user financing requires the Partial Credit Guarantee (PCG) program to be unlocked. This initiative will be operationalized as soon as funding from the National Treasury is secured.

Already, the State Department of Housing has received letters of commitment from six (6) local banks to launch mortgage product targets toward the lower-income bracket home buyers.

The banks have availed KES 335Bn for qualified home buyers based on the Partial Credit Guarantee (PCG) program. Currently, these banks are conducting credit profiling of registered members on Boma Yangu to see how many can be pre-qualified for mortgages.

“The issue of funding has to be resolved especially since the Housing Fund regulations will be amended to reflect voluntary contributions,” says the report.

While KES 256Mn has been contributed by over 20,000 registered members, far more is required to unlock the massive scale that would be required to transform the affordable housing sector.

Over 296,000 Kenyans have registered on the portal demonstrating the presence of aggregate demand in the market. In addition, voluntary contributions by 20,111 contributors have reached over KES 226 million as at the beginning of April 2020.

The National Development Implementation Committee (NDIC) and the National Development Implementation and Communication Cabinet Committee (NDICCC) have directed the PS Lands to open a special desk at the Ministry of Lands to handle all County issues on land for the Affordable Housing Programme to accelerate projects

Furthermore, the Housing PS directed all Counties sign Memoranda of Understanding (MoUs) with the State Department of Housing and Urban Development on Affordable Housing by the end of March, 2020.

This was to ensure that the National Government gives institutional support in constructing Affordable Housing across the Republic.

The programme has identified over 120 potential project sites across the country with about 12,300 acres of land already assessed and due diligence completed.

The report also states that the government is working with the Kenya Mortgage Refinance Company (KMRC), to ensure that market-rate mortgages have fixed and reduced interest rates under 10%.

Currently, 1,509 units have been constructed while 6,168 are under construction.

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