Top 8 Things You Must Know About The Affordable Housing Regulations Of 2024
The Affordable Housing Regulations, 2024 were published for public participation by the State Department for Housing and Urban Development under the framework of the Affordable Housing Act, 2024 outlining crucial guidelines for the development, allocation, and management of affordable housing units.
These regulations aim to provide guidance and establish procedures for the implementation of affordable housing initiatives in Kenya.
Key highlights from the regulations include:
Exemption regulations
Individuals or income classes can be exempted from the Levy under specific conditions like pension income, medical reimbursements, insurance compensation, or income tax exemptions under an Act of Parliament.
Exemption requests must be made in writing to the Cabinet Secretary with reasons specified and accompanied by a tax clearance certificate. An exemption issued is valid for the period and extent specified in the notice.
The Cabinet Secretary may recommend the revocation of an exemption if certain conditions are met, such as disqualification or omission of material information during the application process.
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Allocation regulations
A person eligible for allocation must be a Kenyan citizen, above 18 years, and not previously allocated an affordable housing unit.
An application for allocation must be made as per the Affordable Housing Board’s specified manner and accompanied by required documents like proof of identification, income, deposit, passport-size photo, and list of beneficiaries of the applicant.
The deposit payable by an eligible person for an affordable housing unit allocation is set at 10.0% of the sale price. Individuals unable to raise the required deposit can apply for deposit assistance if their monthly income is below Kshs 20,000 and the estimated monthly repayment is less than 30.0% of their income.
Any funds provided as deposit aid will be reimbursed without incurring any interest or administrative charges. Upon receipt of an application, the Board will decide and notify the applicant of its decision within a specified timeframe.
Changing or Reallocation of a Unit
A person can apply for a change of an affordable housing unit if they meet specified allocation criteria, surrender the current unit in good condition, and have paid all service charges and levies.
The Board will decide upon receiving the application and notify the applicant of its decision. If the application is approved, the Board will allocate an appropriate affordable housing unit to the applicant and transfer all payments made to the new unit’s account.
If a person fails to pay for four consecutive months, the Board can take possession of the unit, reallocate it to another eligible person, change the unit to a lower value one, or enter a restructuring arrangement with the defaulter.
The Board may change a unit to a lower value one if the defaulter meets the criteria for the lower value unit and the payments made would cover the purchase price of the lower value unit. The interest rate for a loan issued under the Act should not exceed 0% per annum on a reducing balance basis.
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Developing Institutional Housing
A public institution can develop institutional housing if it proves the need for it, has available land, and has management systems in place. The institution must apply in writing to the Board for approval, accompanied by necessary decisions or resolutions.
The Board will review the application, decide, and notify the applicant of its decision. If approved, the Board will include the housing in its annual investment program and agree with the institution. In case of rejection, the Board will inform the applicant of reasons for the decision.
The Board will engage an implementing agency listed in the First Schedule of the Act for the design, development, and maintenance of approved institutional housing units,
Financing Regulations
An institution or mortgage scheme must apply in writing to the Board for approval to provide financing for off-take. The application should include various documents like a copy of the certificate of incorporation, valid license, and tax compliance certificates.
The interest rate or administration fee charged by an approved institution or mortgage scheme for financing should not exceed 9.0% per annum. This rate or fee is determined based on the typology and dimensions of the affordable housing units relative to the incomes of the individual applicants.
Institutions or mortgage schemes eligible to enter into financing agreements must satisfy creditworthiness, tax