Contributors to President Uhuru Kenyatta’s Housing Development Fund project will only reap its fruits after five years.
This is after a regulation was put in place ensuring that the funds deducted from formal workers at the rate of 1.5% are not touched until the period lapses.
The project was designed to give the contributors a security whenever they negotiate with other parties over mortgage or with landlords to get ownership of their properties.
“Contributions by individuals shall only be accessed for purposes of offsetting housing loans, security for mortgage or housing development after five years of uninterrupted contribution,” read the regulations.
Formal workers had been slated to make the contributions at the end of October but the plan was postponed due to lack of effective regulations.
This was part of a plan by the state of providing affordable housing units to bridge the current national deficit that stands at 1.85 units.
The Government project aims at locking down the funds so that developers get enough time to develop the units whereas the ministry of housing acquires enough money to meet huge demand financing by home buyers.
With a formal workforce standing at 2.5 million people, the government aims at raising Ksh57 billion every year.
The houses targeted include a studio apartment valued at Ksh600,000, a one bedroom house at Ksh1 million, two bedroom house at Ksh1.4 Million and three bedroom apartments to cost Ksh2 million.
However, in case 15 years of contributions pass by without a contributor getting housing units or is unable to continue making payments because of disability, he or she is liable to getting a refund without factoring in the money paid by the employers.
