How Does The Government Mortgage Scheme Work In Kenya?

How Does The Government Mortgage Scheme Work In Kenya?

The Kenyan government has implemented several mortgage schemes to encourage home ownership among its citizens, particularly civil servants.

One such scheme is the Civil Servants Housing Scheme Fund (CSHSF), which allows government workers to access loans and pay their mortgage up to five years after the official retirement age of 60.

The CSHSF has partnered with financial institutions such as KCB and HF to disburse loans worth billions of shillings to civil servants.

Another mortgage scheme is the Special Scheme Residential Mortgage, which is available to salaried individuals working for the government, parastatals, or corporate companies that provide housing benefits.

This scheme enables individuals to construct their own homes or purchase one off-plan or complete. The benefits of this scheme include value appreciation, mortgage relief, and reduced rates and fees.

The Kenya Mortgage Refinance Company (KMRC) is another initiative that is making home ownership possible for low-income earners in Kenya.

The KMRC was granted a license to conduct mortgage refinance business in 2020 and is yielding positive results.

The KMRC enables onward lending to low-income earners through financial institutions such as SACCOs.

The interest rates for these loans are considerably lower than the prevailing market rates, making home ownership more affordable for low-income earners.

Boma Yangu is another government initiative aimed at providing affordable housing to Kenyans. This initiative allows individuals to register for free and submit their personal details and housing preferences.

Upon registration, individuals are eligible to apply for affordable housing units that are being constructed by the government.

Who Is Eligible For The Government Mortgage Scheme In Kenya?

The Kenyan government has several mortgage schemes to help citizens own homes. To qualify for the affordable housing program, one must be a Kenyan citizen, have a valid national identity card, and be over 18 years old.

After meeting these requirements, one can register on the Affordable Housing portal known as Boma Yangu.

The Civil Servants Housing Scheme Fund (CSHSF) provides loans to civil servants ranging from KShs 4 million to KShs 20 million, depending on seniority and affordability.

The loan is repayable within 20 years or before the loanee attains the age of 60 years, whichever is earlier.

The Kenya Mortgage Refinance Company (KMRC) provides long-term funds to primary mortgage lenders such as banks, microfinance banks, and Saccos to increase the availability and affordability of home loans to Kenyans.

KMRC offers affordable housing loans, which are loans extended to primary mortgage lenders to refinance mortgage loans capped at KES 6 million in the Nairobi metropolitan area (Nairobi, Kiambu, Machakos & Kajiado).

KMRC also offers market housing loans, which are loans extended to primary mortgage lenders to refinance mortgage loans above the affordable housing loans threshold.

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