Skip to document content Go to main menu Go to search

The Affordable Housing Regulations, 2025

Legal Notice 114 of 2025

The Affordable Housing Regulations, 2025
Citation
Legal Notice 114 of 2025
Primary work
Affordable Housing Act
Date
9 July 2025
Language
English
Type
Legal Notice
Original enactment
Download original enactment (PDF) (257.0 KB)
Skip to document content
LAWS OF KENYA

AFFORDABLE HOUSING ACT

THE AFFORDABLE HOUSING REGULATIONS, 2025

LEGAL NOTICE 114 OF 2025

  • Published in Kenya Gazette on 9 July 2025
  • Commenced on 9 July 2025

Part I – PRELIMINARY

1. Citation

These Regulations may be cited as the Affordable Housing Regulations, 2025.

2. Interpretation

In these Regulations, unless the context otherwise requires—"agreement for financing" means an agreement entered into in accordance with section 45 of the Act;"credit rating" means evaluating the ability of an individual to meet payment obligations to the Board for a for a loan, tenant purchase scheme or deposit assistance;"deposit" means an amount payable towards the purchase of an affordable housing unit;"deposit assistance" means a loan issued by the Board towards raising a deposit for the purchase of an affordable housing unit as well as provisions for furnishings for persons whose income is below twenty thousand shillings and whose full repayment is only due upon default, sale, surrender, or transfer of the affordable housing unit;"financing institution" includes a commercial bank, microfinance bank, mortgage finance institution or a mortgage refinancing company;"gross income" means the total amount received from the economic activity of a person before deducting the expenses incurred by the person;"Levy" has the meaning assigned to it under section 2 of the Act;"off-take" means the acquisition of an affordable housing unit under an approved housing scheme; and"tenant purchase scheme" means an arrangement for the purchase of an affordable housing unit where monthly payments are made to offset the outstanding amount and interest to acquire the affordable housing unit.

Part II – ALLOCATION OF AFFORDABLE HOUSING UNITS

3. Eligibility criteria for allocation of an affordable housing unit

A person is eligible to be allocated an affordable housing unit if that person—
(a)is a citizen of Kenya;
(b)has attained the age of eighteen years;
(c)has not been previously allocated an affordable housing unit; and
(d)has not been previously advanced a loan for the development of a rural affordable housing unit.

4. Application for allocation of an affordable housing unit

(1)A person who meets the eligibility criteria specified in regulation 3 and intends to purchase an affordable housing unit shall submit to the Board an electronic application for allocation of an affordable housing unit in Form 1 set out in the Schedule.
(2)The Board shall, within ninety days after receiving an application made under paragraph (1)—
(a)verify the authenticity of documents attached to the application; and
(b)evaluate the ability of the applicant to meet the payment obligations for the selected affordable housing unit.

5. Allocation of an affordable housing unit

(1)Upon the successful determination of an application made under regulation 4, the Board shall allocate an affordable housing unit categorised in accordance with regulation 21, to the applicant.
(2)Where the application made under regulation 4 is for a tenant purchase scheme, the Board shall take out a group life insurance cover for the outstanding amount payable by the applicant, whose premiums shall be payable by the applicant.
(3)A person who has been allocated an affordable housing unit under paragraph (1) shall remit the payments, interests and other charges for the affordable housing unit, in accordance with the agreement entered into by the Board and the person.

6. Decline of allocation of an affordable housing unit

Where an application made under regulation 4 is not successful, the Board shall, within fourteen days after the decision is made—
(a)notify the applicant of its decision specifying the reasons for its decision; and
(b)transfer the amount deposited to the voluntary savings account of the applicant.

7. Rate of deposit

The amount of the deposit payable for the purchase of an affordable housing unit shall be up to five percent of the purchase price of the affordable housing unit.

8. Deposit assistance

(1)A person is eligible to deposit assistance where that person—
(a)is a citizen of Kenya;
(b)has attained the age of eighteen years;
(c)has not been previously allocated an affordable housing unit;
(d)has not previously received deposit assistance from the Fund; and
(e)has the ability to repay the deposit assistance as determined by the Board.
(2)A person who meets the criteria specified in paragraph (1) and intends to obtain deposit assistance shall apply for deposit assistance required in the application made under regulation 4.
(3)Where an application for deposit assistance is successful, the Board shall enter into an agreement with the applicant and credit the deposit assistance to the account of the applicant in accordance with the agreement.
(4)The amount of deposit assistance advanced under paragraph (3) shall be added to the outstanding amount, and any interest, payable by the applicant under a tenant purchase scheme, or the amount advanced to the applicant for the development of a rural affordable housing unit.
(5)Where an application for deposit assistance is not successful, the Board shall notify the applicant of its decision and state the reasons for the decision within fourteen days after the decision is made.

9. Change of allocated affordable housing unit

(1)A person is eligible to a change of allocated affordable housing unit where that person has already been allocated an affordable housing unit and has not transferred the ownership of the affordable housing unit.
(2)A person who meets the criteria specified in paragraph (1) may submit an electronic application to the Board specifying the reasons for the proposed change of allocation.
(3)Where the Board considers that the affordable housing unit surrendered in accordance with paragraph (7) is not tenantable, the Board may renovate and recover the cost of the renovation from the person who made the application.
(4)Within thirty days after an application made under paragraph (2) is made, the Board shall determine the application and notify the applicant of its decision within fourteen days after the decision is made.
(5)Where an application made under paragraph (2) is successful, the Board shall—
(a)allocate a different affordable housing unit to the applicant; and
(b)withdraw all the payments made by the applicant for the previously allocated affordable housing unit and repurpose those payments for the newly allocated affordable housing unit.
(6)An applicant under paragraph (2) who had not taken possession of the previously allocated affordable housing unit shall forfeit the affordable housing unit.
(7)An applicant under paragraph (2) who had taken possession of the previously allocated affordable housing unit shall surrender the affordable housing unit to the Board in a tenantable condition.
(8)Where the newly affordable housing unit allocated under paragraph (5) is of a lower value than the previously allocated affordable housing unit—
(a)the Board shall, within ninety days of making the decision, refund the applicant the payments made by the applicant that exceed the amount of the monthly payments of the newly allocated affordable housing unit; and
(b)the Board and the applicant shall restructure the payment obligations of the tenant purchase agreement for the newly allocated affordable housing unit.
(9)Where the newly allocated affordable housing unit allocated under paragraph (5) is of a higher value than the previously allocated affordable housing unit, the applicant and the Board shall restructure the payment obligations of the tenant purchase agreement for the newly allocated affordable housing unit.

10. Default in payment for an affordable housing unit

(1)Where a person who was allocated an affordable housing unit under a tenant purchase scheme defaults in the payment for one month, the Board shall issue a notice, in writing, to that person requiring the default to be remedied within thirty days.
(2)Where a person fails to comply with the notice issued under paragraph (1), and has been in default for the payment for two consecutive months, the Board shall, issue a notice, in writing, to that person requiring the person to, within two weeks—
(a)pay the amount in default;
(b)apply for change of allocation of the affordable housing unit to an affordable housing unit of a lower value; or
(c)restructure the payment obligations of the tenant purchase agreement.
(3)The notice issued under paragraph (2) shall specify that where the person in default does not comply with the notice, the Board shall take possession of the affordable housing unit and may reallocate the affordable housing unit to another eligible person.
(4)Where an application made under paragraph (2)(b) is successful, the Board shall, within thirty days after the application is made, allocate the person an affordable housing unit if—
(a)the applicant meets the criteria set out under regulation 3 for an affordable housing unit of a lower value than the affordable housing unit previously allocated;
(b)the payments made by the applicant are adequate to purchase the affordable housing unit of a lower value than the affordable housing unit previously allocated; and
(c)an affordable housing unit of a lower value than the affordable housing unit previously allocated is available.
(5)Where an application made under paragraph (2)(b) is not successful, the Board shall, within thirty days after the application is made, issue to the applicant a notice in writing of the intention of the Board to repossess the unit within fourteen days from the date of the notice.
(6)Where the Board takes possession of an affordable housing unit under paragraph (5), the Board shall assess any applicable refunds due to the applicant under the tenant purchase agreement.

11. Application for a loan for the development of a rural affordable housing unit

(1)A person is eligible to apply for a loan for the development of a rural affordable housing unit, if that person—
(a)has made voluntary savings with the Fund;
(b)has not been allocated an affordable housing unit; and
(c)has met the eligibility criteria specified in regulation 3.
(2)A person who meets the criteria specified in paragraph (1) may submit to the Board an electronic application for a loan for the development of a rural affordable housing unit in Form 2 set out in the Schedule accompanied by—
(a)a development permission granted by the respective county executive committee member under section 57 of the Physical and Land Use Planning Act (Cap. 303);
(b)a valuation report of the land issued by a valuer who is registered in accordance with the Valuers Act (Cap. 532);
(c)a priced bill of quantities prepared by a quantity surveyor who is registered under the Architects and Quantity Surveyors Act (Cap. 525);
(d)a copy of the title to the land indicating that the land is registered in the name of the applicant;
(e)a copy of the official search of the land indicating that the land is registered in the name of the applicant; and
(f)a declaration that the loan shall be solely used for development of a rural affordable housing unit.
(3)When determining an application made under paragraph (1), the Board may consider the following—
(a)whether the applicant has an operational voluntary savings account with the Fund; and
(b)whether the applicant has the ability to repay the amount applied.
(4)The Board shall, within ninety days after an application made under paragraph (1), determine the application and notify the applicant in writing of its decision within fourteen days after the decision is made.
(5)Where an application made under paragraph (1) is successful, the Board shall—
(a)enter into an agreement with the applicant;
(b)credit the amount borrowed to the account of the applicant in accordance with the agreement after the registration of a charge in favour of the Board; and
(c)notify the applicant to take out a life insurance cover for the loan advanced.
(6)The loan amount credited to a successful applicant under paragraph (6)(b) shall not exceed four million shillings.
(7)Where an application under paragraph (1) is not successful, the Board shall specify the reasons for the decision in the notice issued under paragraph (5).

Part III – INSTITUTIONAL HOUSING

12. Agreement to develop, renovate existing or complete unfinished institutional housing

(1)A public institution may enter into an agreement with the Board to develop institutional housing where the institution satisfies the Board that the public institution—
(a)has a need for the proposed institutional housing;
(b)has land available for the development of the proposed institutional housing; and
(c)has developed a system or structure for the management and maintenance of the proposed institutional housing.
(2)A public institution may enter into an agreement with the Board for—
(a)the renovation of existing institutional housing of the public institution; or
(b)the completion of unfinished institutional housing of the public institution.
(3)This regulation shall apply only where the land on which institutional housing is to be developed, renovated or completed, does not have any encumbrances placed on its ownership.

13. Development of institutional housing through implementing agencies

The Board shall design, develop and maintain institutional housing through an approved implementing agency set out in the First Schedule to the Act.

Part IV – OFF-TAKE

14. Institutions which may offer financing for off-take

The Board may enter into an agreement for financing off-take with the following institutions or entities established, registered or authorised to provide loans for purchasing affordable housing units—
(a)an entity established by the national government or a county government;
(b)an institution licensed under the Banking Act (Cap. 488);
(c)a retirement benefit scheme registered under the Retirement Benefits Act (Cap. 197);
(d)a securities exchange, commodities exchange or derivatives exchange, registered venture capital company, collective investment scheme or credit rating agency, licensed under the Capital Markets Act (Cap. 485A); or
(e)a savings and credit co-operative society licensed under the Sacco Societies Act (Cap. 490B).

15. Approval of an institution to offer financing for off-take

(1)An institution or entity referred to in regulation 14 may finance off-take where the institution or entity submits a valid tax compliance certificate issued under section 72 of the Tax Procedures Act (Cap. 469B), to the Board and satisfies the Board that the institution entity is creditworthy.
(2)An institution or entity which meets the eligibility criteria specified in paragraph (1) shall submit an electronic application for approval accompanied by—
(a)a copy of the certificate of incorporation, or registration certificate, of the institution, where applicable;
(b)a certified copy of a valid licence in respect of the institution issued under the Banking Act (Cap. 488), where applicable;
(c)a certified copy of a valid licence in respect of the institution issued under the Microfinance Act (Cap. 493C), where applicable;
(d)a certified copy of a valid registration certificate issued under the Retirement Benefits Act (Cap. 197), where applicable;
(e)a certified copy of a valid authorisation issued under the Capital Markets Act (Cap. 485A), where applicable;
(f)a certified copy of a valid licence in respect of the institution issued under the Sacco Societies Act (Cap. 490B), where applicable;
(g)a copy of the Kenya Revenue Authority personal identification number of the institution; and
(h)a copy of the valid tax compliance certificate for the institution.
(3)The Board shall, within ninety days after an application made under paragraph (1) is made, determine the application and notify the applicant in writing of its decision within fourteen days after the decision is made.
(4)Where an application made under paragraph (1) is approved, the Board shall enter into an agreement with the institution for financing off-take.
(5)Where an application made under paragraph (1) is not successful, the Board shall notify the applicant of its decision and state the reasons for the decision.

16. Eligibility criteria for off-take by the Board

The Board may off-take from an agency specified in the First Schedule to the Act where the agency submits a valid tax compliance certificate issued under section 72 of the Tax Procedures Act (Cap. 469B), to the Board.

Part V – INTEREST RATE

17. Interest rate

The interest rate for a loan issued for the purposes of purchasing an affordable housing unit and development of a rural affordable housing unit shall be—
(a)where the monthly income of the person allocated an affordable housing unit is less than twenty thousand shillings, three per cent per annum of the reducing balance;
(b)where the monthly income of the person allocated an affordable housing unit is at least twenty thousand shillings but does not exceed one hundred and forty-nine thousand shillings, six per cent per annum of the reducing balance; and
(c)where the monthly income of a person allocated an affordable housing unit is more than one hundred and forty-nine thousand shillings, nine per cent per annum of the reducing balance.

Part VI – TRANSFER OF OWNERSHIP OF AN AFFORDABLE HOUSING UNIT

18. Consent for sale of an affordable housing unit

(1)Where the owner of an affordable housing unit intends to sell the affordable housing unit or an interest in the affordable housing unit, the owner shall apply for consent, in writing, specifying the reasons for the sale of the affordable housing unit or an interest in the affordable housing unit, and submit the application electronically to the Board.
(2)When considering an application made under paragraph (1), the Board shall determine whether the applicant—
(a)has been in possession of the affordable housing unit for at least five years after the completion of the payment obligations for the affordable housing unit; and
(b)offers a price within the prevailing market price range for a similar affordable housing unit as determined through a valuation procured by the owner from a valuer registered under the Valuers Act (Cap. 532).
(3)Where an application made under paragraph (1) is successful, the Board shall, within thirty days after the application was made issue, in writing, a consent to sell the affordable housing unit.
(4)Where an application made under paragraph (1) is not successful, the Board shall, within thirty days after the application was made, notify the applicant of its decision within fourteen days after the decision is made, specifying the reasons for the decision.
(5)An affordable housing unit that is offered for sale upon a consent issued under paragraph (4) shall only be purchased by a person who meets the eligibility criteria referred to in regulation 3 for the respective affordable housing unit.

Part VII – REVIEW AND APPEAL AGAINST DECISIONS OF THE BOARD

19. Review of decisions of the Board

(1)A person who is aggrieved by a decision of the Board made under regulation 4, 8, 9, 10, 11, 16, 17 or 21 may apply in writing to the Board for a review of the decision within fourteen days after the decision is made.
(2)An application for review may be made under paragraph (1) on the grounds of—
(a)the discovery of a new or important fact, the evidence of which, after the exercise of due diligence, was not within the knowledge of the person when the decision was being made; or
(b)a clerical or arithmetic error that is apparent on the decision.
(3)Where the Board considers that there is no sufficient ground for a review, the application shall be dismissed and the decision of the Board shall stand.
(4)Where the Board is of the opinion that the application for review should be granted, the Board shall reconsider the application for which the review was applied for within the timelines specified in regulation 4,8,9,10,11,16,17 or 21.

20. Appeals against decisions of the Board

A person aggrieved by a decision of the Board under regulation 4,8,9,10,11,16,17 or 21 may appeal to the High Court.

Part VIII – MISCELLANEOUS

21. Categorisation of affordable housing units

(1)The Board shall categorise affordable housing units in an affordable housing scheme into the allocation pools based on the level of income.
(2)The pools referred to in paragraph (1) shall be categorised as follows—
(a)social housing units which shall be for applicants whose monthly income is below twenty thousand shillings;
(b)affordable housing units which shall be for applicants whose monthly income is between twenty thousand and one hundred and forty-nine thousand shillings; and
(c)affordable middle-class housing units which shall be for applicants whose monthly income is over one hundred and fort-nine thousand shillings.

22. Establishment of an electronic system

(1)The Board shall establish an electronic system for the allocation of affordable housing units in accordance with the pools categorised under regulation 21.
(2)In relation to applications made under regulations 4, 8, 9, 10 and 11, the system established under paragraph (1) shall—
(a)provide real-time tracking of each application;
(b)record timestamps for each application;
(c)distinguish applications in accordance with the pools categorised under regulation 19; and
(d)provide access and transparency to the applicants.
(3)The Board shall process applications made under regulations 4, 8, 9, 10 and 11, in accordance with the timestamps for each application.

23. Development of associated physical infrastructure

The Board may develop the following associated physical infrastructure in every affordable housing scheme—
(a)access roads and parking;
(b)non-motorised transport including walkways;
(c)storm water drainage;
(d)sewer line connectivity;
(e)water reticulation services;
(f)liquefied petroleum gas reticulation services;
(g)street lighting;
(h)internet connectivity;
(i)high mast lighting;
(j)connectivity to electricity supply;
(k)solar lighting; and
(l)infrastructure for transit oriented public transport.

24. Development of associated social infrastructure.

The Board may develop the following associated social infrastructure in every affordable housing scheme—
(a)a health facility;
(b)a pre-primary educational institution;
(c)a basic education institution;
(d)a fire station;
(e)a police post;
(f)a social hall;
(g)a market;
(h)open spaces; and
(i)infrastructure for the management of solid waste.

25. Conduct of public participation

(1)Where the Board intends to conduct public participation and stakeholder engagement under section 41(2) of the Act, the Board shall issue a notice of at least a fourteen days to interested persons and the members of the public.
(2)The notice issued under paragraph (1) shall specify—
(a)the period which public participation and stakeholder engagement shall be conducted;
(b)the date, time and location where each forum for public participation or stakeholder engagement will be conducted; and
(c)the purpose of the public participation or stakeholder engagement.
(3)The Board shall publish the notice issued under paragraph (1)—
(a)in two newspapers of nationwide circulation;
(b)on at least one radio station whose coverage is nationwide;
(c)on at least one radio station whose coverage is at least within the respective county; and
(d)on the website of the Board.
(4)The Board shall not conduct public participation or stakeholder consultations on county land that has not been approved for allocation by the respective County Assembly and the National Land Commission for affordable housing.
(5)The Board shall review and consider comments received from stakeholders and members of the public during the public participation.

26. Development of an affordable housing scheme on settlement

Where the Board intends to develop an affordable housing scheme on land which is situated on a settlement under section 47 of the Act, the Board shall issue a notice of intention to develop an affordable housing scheme in Form 3 set out in the Schedule.

27. Off-take of an affordable housing scheme on settlement

Where the Board intends to off-take an affordable housing scheme developed on land which is situated on a settlement under section 47 of the Act, the Board shall issue a notice of intention to off-take in Form 3 set out in the Schedule.

28. Agreement of the Board with a private institution

Where the Board intends to enter into an agreement with a private institution for the purposes of section 44 of the Act, the Board shall publish a notice of intention to enter into an agreement in Form 4 set out in the Schedule.

29. Voluntary savings

Where a person who has made voluntary savings with the Fund for purposes of raising a deposit, but has not been allocated a unit, intends to withdraw the savings in accordance with section 52(4)(a) of the Act, the Board shall, refund the savings and any accrued interest or profit less any applicable administrative costs and close the person's account.

SCHEDULE

FORMS

FORM 1 - APPLICATION FOR ALLOCATION OF AN AFFORDABLE HOUSING UNIT(r. 4(1))
(Should not exceed 90% of the cost of the development subject to a maximum loan of KSh. 4,000,000)
DeclarationI hereby declare that—
(a)the information provided is true and accurate to the best of my knowledge;
(b)I consent to the verification of the same as required by the Affordable Housing Board; and
(c)the loan advanced shall be used solely for the development of the rural affordable housing unit.
☐  I agreeSignature of the applicant: ...................................Date: .................................................................
FORM 3—NOTICE OF INTENTION TO DEVELOP OR OFF-TAKE AFFORDABLE HOUSING SCHEME(r. 26, 27))
The Affordable Housing Board hereby gives notice to the residents of ................................. (indicate name of the sub-county/ward), of the intention to develop/off-take .......................................... (indicate the name of affordable housing scheme) situated on ...................................... (indicate title number of property) at ........................... (indicate the name of the County).The affordable housing scheme includes the development/off-take of—
(a)(indicate the quantity and category of the affordable housing units)
(b)(indicate the quantity and type of associated physical infrastructure) and
(c)(indicate the quantity and type of associated social infrastructure).
The residents of ............................................. (indicate name of the sub-county/ward), at ............................................. (indicate the name of the County) are invited to submit their comments on the intended development or off-take to the Board within twenty-one days.
Dated .......................................................... 2025.
.....................................................
Chairperson,Affordable Housing Board.
 
FORM 4—NOTICE OF INTENTION TO ENTER INTO AN AGREEMENT WITH A PRIVATE INSTITUTION(r. 28)
The Affordable Housing Board hereby gives notice to the public of the intention to enter into an agreement with an interested private institution with the capacity to develop and construct affordable housing units and associated social and physical infrastructure and for the supply of goods and materials in connection with the development and construction of affordable housing units.Interested private institutions are invited to submit their applications in line with the invitation of tenders dated ................................ Tender Number ...................................
Dated .......................................................... 2025.
.....................................................
Chairperson,Affordable Housing Board.
 
▲ To the top

History of this document

09 July 2025 this version
Commenced

Cited documents 8

Act 8
1. Tax Procedures Act 1606 citations
2. Physical and Land Use Planning Act 689 citations
3. Retirement Benefits Act 280 citations
4. Sacco Societies Act 133 citations
5. Capital Markets Act 131 citations
6. Microfinance Act 77 citations
7. Valuers Act 37 citations
8. Architects and Quantity Surveyors Act 26 citations

Documents citing this one 0