The National Housing Corporation in its 2023- 2027 strategic plan has explained how it plans to deliver at least 110,000 Affordable Housing Units.
First, the corporation explained that the construction of the units is in line with the government’s plan to have mortgages that cost Ksh10,000 below quantified in terms of monthly payments.
“The government aims at increasing the number of mortgages from the current 30,000 to 1,000,000 from 2023 – 2027 by enabling low-cost mortgages of Ksh 10,000 and below,” read the plan in part.
Hence NHC has adopted a segmented financing model that will see County Governments incur the cost of construction of 100,000 Affordable Housing units.
Meanwhile, 5,000 units will be built on the Corporation’s land targeting the commercial rate market.
NHC has also committed to the construction of 5,000 rooms for student accommodation which will aim to bridge the gap of inadequate student housing.
Further, NHC also explained that it targets to increase its asset base for land through increasing its purchases, recovery of the land and allocation by government and other State Agencies.
Implementation of the plan is expected to cost Ksh 361.9 billion, which the Corporation details will be achieved through the mobilization of Ksh 340 Billion from external sources while the balance of Ksh22 billion will be sourced internally.
Further, NHC explained that within its five-year plan, there was a Ksh 250 billion commitment of which Ksh 50 billion was to be advanced by the government through budgetary allocations.
As outlined in the document, Ksh 200 billion will be drawn from pension funds.
However, NHC explained that the government will need to allocate approximately Ksh 57.9 billion for five years in order to unlock Ksh 200 billion from pension funds and the private sector.
The corporation also expects to secure financing for the construction through other collective investment schemes including Diaspora bonds.
A spot check by Kenyans.co.ke revealed that monthly mortgage rates in Kenya typically range above Ksh15,000 with most banks offering between Ksh15,000 and Ksh20,000 depending on the tenor and the size of the mortgage.
