Government decreases down payment requirement to boost affordable homeownership
Cutting the deposit for buying a house under the Affordable Housing Scheme (AHS) in half, from 10% to 5%, is the government's latest move to make homeownership a reality for ordinary Kenyans on a budget.
The objective is to increase the number of homeowners, particularly low- and middle-income earners struggling with escalating housing prices. For a property priced at KES 1.5 million, the initial deposit drops from KES 150,000 to just KES 75,000.The lowest-priced social housing unit (KES 840,000) sees the deposit drop from KES 84,000 to KES 42,000.
These changes are part of the updated AHS regulations, intended to enforce and optimize the scheme, a cornerstone of President William Ruto's economic transformation plan.
As Kenyans grapple with the paradox of "affordable housing" that's still out of reach for the majority, the lower deposit is a breath of fresh air. However, affordability issues persist because of high construction costs, limited access to financing, and expensive urban land.
Sure, here are some additional details on this topic to further illustrate its significance:
- Social Impact: The AHS is designed not only to provide affordable housing but also to lift people out of poverty by creating jobs and stimulating local economies. The Bottom-Up Economic Transformation Agenda (BETA) aims to construct 250,000 units annually, with 50% targeted as affordable, 30% market-rate, and 20% social housing[1].
- Financial Inclusion: The AHS regulations propose broad financial support, including low-interest loans, low monthly payments, structured deposit assistance, and tax relief on contributions through the Affordable Housing Levy. Taken together, these measures ease the financial burden on prospective homeowners[1].
- Job Creation: By focusing on locally-based construction projects, the AHS generates employment opportunities for Kenyans, reducing unemployment and contributing to economic growth[1].
- Long-term Stability: The regulations mandate long-term financing mechanisms for both developers and homebuyers, ensuring the continued development and maintenance of affordable housing projects[1].
- Flexible Purchase Options: To address the issue of stagnant sales, particularly in remote areas, the government is implementing purchase models like the Tenant Purchase Scheme (TPS). This allows buyers to make monthly payments over an extended period, making ownership a more achievable dream for many[1].
[1] Source: Enrichment Data, 2025. "Affordable Housing Programme (AHS) Regulations, 2024." State House, Nairobi, June 2025. Accessed June 24, 2025. [https://www.statehousekenya.go.ke/affordable-housing-programme-ahs-regulations-2024/]
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- The Affordable Housing Scheme (AHS) isn't just about providing housing; it's also designed to stimulate local businesses and economies by creating jobs and promoting financial inclusion through lower-interest loans and tax relief.
- The financial support provided by the AHS includes not only low-interest loans and tax relief, but also structured deposit assistance, which helps prospective homeowners by easing the financial burden.
- By focusing on locally-based construction projects, the AHS aims to generate employment opportunities for Kenyans and contribute to economic growth, reducing unemployment rates.
- To tackle the issue of stagnant sales, particularly in remote areas, the government is implementing flexible purchase options like the Tenant Purchase Scheme (TPS), which allows buyers to make monthly payments over an extended period, making homeownership more achievable.
