All applicants seeking to purchase units in the State’s affordable housing programme through mortgage financing would be required to present proof of income, the government says in new proposed regulations.
This is likely to rattle many Kenyan hustlers without regular pay slips and who form a majority of the population.
Proof of income or funds is a document or paper that shows a person or entity has the ability and funds available for a specific transaction.
“An application for allocation of an affordable housing unit shall be accompanied by – the deposit payable at the rate of 10 per cent of the purchase price; proof of identification; a list of beneficiaries to the applicant; proof of income and ability to pay for the loan; a passport size photo of the applicant,” say the Draft Affordable Housing Regulations of 2024 by the State Department of Housing.
The proof of income rule could prove a thorn in the backside for non-salaried Kenya popularly aka hustlers, unlike their counterparts in formal jobs who have salary verification letters as evidence that they have a job and can comfortably secure a loan or sign a lease.
The rule could, however, be a boon for the Kenya Revenue Authority which could have a clearer view of the income status of the hustlers who have largely remained off its tax radar for a long time.
Further, the government is now proposing that Kenyans who make cash purchases of units under the government’s affordable housing agenda be allowed to sell them after eight years following completion of payment, and after seeking the approval of the Affordable Housing Board.
Item 31(1) of the Draft Affordable Housing Regulations 2024 states that, “For purposes of Section 54 of the Act, a purchaser shall not sell their affordable housing unit until eight years after completion of payment of the agreed price has lapsed”.
Item 31(2) of the Draft Regulations expressly bars Kenyans who purchase their affordable housing units through mortgage arrangements from being eligible for the sale of the units.
The Draft Regulations further provide that, in the event, a cash buyer wishes to sell their affordable housing once the prescribed eight years lapse, they will have to grant the Affordable Housing Board the right of refusal before putting the unit on sale in the market. This means that the board will be given priority as a potential buyer every time an owner wishes to sell their unit.
Any Kenyan who purchases the affordable housing unit through mortgage financing and fails to make scheduled payments for four consecutive months will be deemed to be in default and will be given three options as per item 3 of the Draft Regulations.
