Demystifying Mortgages: KMRC & The Affordable Housing Programme

How KMRC and the Affordable Housing Programme Are Changing Home Financing

For decades, single-digit interest rate mortgages were virtually non-existent in Kenya. Commercial bank mortgage rates hovered between 13% and 18%, keeping homeownership out of reach for many middle-income earners.

Today, state-backed initiatives like the Kenya Mortgage Refinance Company (KMRC) and the Affordable Housing Programme (AHP) are shifting the landscape.

What is KMRC and How Does It Lower Your Interest Rate?

KMRC does not lend directly to individual buyers. Instead, it provides long-term, low-cost funds to primary mortgage lenders—such as commercial banks and SACCOs—allowing them to issue home loans at single-digit fixed rates (typically 9% to 10.5%).

KMRC Loan Eligibility Highlights:

• Income Cap: Designed for households earning up to KES 150,000 per month.
• Maximum Loan Threshold: Up to KES 10.5 Million within the Nairobi Metropolitan Area (NMA) and up to KES 8 Million for the rest of the country.
• Repayment Period: Up to 25 years, significantly lowering monthly installments compared to standard commercial bank loans.

The Affordable Housing Programme (Boma Yangu) Explained

The Affordable Housing Programme aims to deliver decent, low-cost housing units across major urban centers.

How to Participate:

1. Registration: Register on the government portal (Boma Yangu).
2. Savings Contribution: Save toward the initial deposit requirement (typically 10% of the unit price).
3. Allocation: Units are allocated based on availability, family structure, and savings consistency.
4. Tenant Purchase Scheme (TPS): Instead of a traditional bank mortgage, buyers pay monthly rent-to-own installments over 15–20 years until the property is fully paid off.

Final Takeaway: Mortgages vs. SACCO Financing

If you are looking to buy or build, do not limit your options to traditional commercial banks. Explore whether your employer or financial provider accesses KMRC refinancing, or consider SACCO asset-financing options, which often offer fixed-rate construction loans with lower setup fees.