Frequently Asked Questions on Housing and Mortgages

Question: When is the best time to start planning for a mortgage?

Answer: The journey to property ownerships begins with putting funds aside as savings to achieve your long term goal of home ownership. This can be achieved by opening a 1^st HOP Account, a Crossover Savings Account or through purchase of a Housing Development Bond. It is advisable to begin saving early for home purchase since mortgage is a long term commitment that requires self-discipline.

The 1^st Hop account is an excellent starting point for young people who want to develop the savings discipline. It enables you to save up to Sh.4,000 per month tax free. Also, interest on the account for amounts below Sh.3,000,000 does not attract tax. The account’s key advantage is that it builds deposits and its benefits accrue when you invest in a housing project.

The Crossover Savings Account offers you very attractive features that enable you to save for long term projects such as home ownership or any other dreams you have.  These features include: earning high interest on the account deposits as well as loyalty points on every deposit, access to 100 per cent mortgage financing, up to 25 per cent discount on commitment fees, up to 2 per cent discount on mortgage interest when applying for a mortgage loan and much more.

The Housing Development Bond (HDB) on the other hand equally suits those who want to set aside money for putting up a home. The HDB requires a minimum of Sh.50,000 and offers a saving of 5 per cent on withholding tax. HDB gives you the flexibility of savings and withdrawal in case there is an urgent need for the money.

As your income grows, it is wise to put more money aside. The challenge with most of us is the culture of first spending then saving what remains.

Q: Do I have to wait until I have found a property I want to purchase before I can apply for a loan?
A: You do not have to wait until you find that property but it is strongly recommended. By getting approved now, you will know exactly what you qualify for before you begin shopping. Sellers will know you are a serious buyer because your financing is already arranged. This may be an advantage when the property comes at a discount for early buyers. To approve you and determine the amount for which you qualify, Housing Finance takes into account your current income, debt and credit history. Once you find a property, and sign a sales agreement, we can immediately begin processing your loan.
Housing Finance, though The Property Point, can also help you in the search for Property. The Property Point is a one-stop property shop that features displays from various suppliers of property in Kenya, thus enabling customers to access a wide range of options under one roof. This eases the process of acquiring property. In addition, The Property Point has also entered into strategic partnerships with suppliers of building and construction materials such as cement manufacturers, tiling, paint manufacturers, cabling etc to make all these services accessible under one roof at negotiated discounts.

Q: When buying a flat, what are your rights of ownership?

A: When you purchase a flat, you obtain a sub-lease from the main title. The main title is usually held in the name of a management company. The directors of this management company are the home owners of the court where the flat is located. The management company charges a service charge which caters for items such as payment of water and electricity in the common areas, security and garbage collection, among others.

Q: Does HF give individuals construction loans, and if so, what are the criteria for qualification and what percentage do they finance?

A: When it comes to construction finance, the firm will need to first ascertain the type of house you want to put up. We also establish the purpose for putting up the house, i.e. if its owner occupier you qualify for 80 per cent and for rental we disburse up to 70 per cent of the financing cost.

Q: Is age considered during the mortgage application process?

A: Yes. The repayment period of a mortgage is determined by the borrower’s age and the retirement age in their organization (if they are employed) or the age of 65 years if they are in business. The number of years you will pay for the mortgage will be determined by how old you are now and how long you have to get to retirement age. The maximum repayment period for any mortgage is 20 years.  Apart from age, your source of income will also determine the repayment period.

Q: What should I do if I can't make a payment on loan?

A: When you realize that your finances are unable to meet your mortgage obligation whether due to retrenchment or otherwise, immediately we advice you to talk to Housing Finance who will help you come up with options. Do not avoid the bank at this time as this will be viewed as default.    

How do I get more information?

Visit our website www.housing.co.ke or write to us on propertypoint@housing.co.ke or diaspora@housing.co.ke or call us on 3262000/ 3262364/

Property Finance for Kenyans abroad by Housing Finance

Housing Finance has for over 40 years helped Kenyans in Kenya and beyond turn their dreams into homes. The company was incorporated on 8th November 1965 as per the Banking Act, under the name the Housing Finance Company of Kenya

It has since been the premier mortgage finance institution by providing easy access to mortgage finance, by enabling our clients to access money as they build, buy and own their homes.

SOLUTIONS FOR YOUR EVERY NEED.

Housing Finance has developed a variety of products to suit your every need – we can provide you financing to buy an already completed house, build your home, purchase a plot or even build residential units. Our mortgages are offered at very attractive interest rates. We usually finance up to 85% the value of the property of choice for a maximum period of 15 years.

The most popular products are:

1. Investment Residential Mortgage – This loan facility is suitable for individuals who would like to buy property for investment purposes i.e. to earn rental income.
2. Vuna Hela Mortgage – This product is ideal for those who would like to borrow funds against a property they already own. Through regular repayments, one acquires equity in their mortgage equivalent to the amount already paid up. This acquired equity can be availed for further development of the property, or for other purposes. Money is lent on the value of the equity.
3. Plot Purchase Financing - This loan helps satisfy the aspirations of many Kenyans by providing access to funds that will contribute toward the purchase of a plot.
4. Construction Financing - This is a facility that allows those who already own a plot to borrow and build a residential unit on it.

 Innovation does not stop there; aspiring to take property ownership to new heights, Housing Finance has created new and unique products that are designed to provide convenience and match the changing customer’s needs;

These include:

Makao - Makao is a convenient building solution that aims to help home owners build a home cost-effectively by bringing together a consortium of professionals in the construction industry.

In this unique product, one is able to access qualified personnel to supervise the construction thus making the building process friendly and seamless.

A variety of house designs have been developed for home owners to choose from depending on their requirements and financial ability.

Project Finance

This is a specialized solution designed to cater for both small and large property developers who wish to put up multiple units either as build to rent or build to sell. Financing is normally based on the anticipated cash inflows or income of the property being developed.

We also have savings products to cater for those who would like to save some money back home. These accounts offer attractive interest rates and can be used to put aside money to raise the required minimum.

These include:

• Crossover Savings Account – This is a Super Savings account that not only earns you high interest on your money but also earns you points based on the deposits made into the account. These points can be redeemed for great household good. The account also gives you access to 100 per cent mortgage financing, up to 25 per cent discount on commitment fees, up to 2 per cent discount on mortgage interest when applying for a mortgage loan and much more.
• Treasure Account – This is a children’s account with no charges that allows guardians to put money away with the aim of giving their children a good start to life.
• Housing Development Bond – The HDB is an account that allows a fixed amount of money to be saved for a period of time. The account holder declares the amount to be saved as a lump sum and fixed for an agreed period.  It is designed for the individual saver who will not need to access the funds for the duration of the savings plan.

The Mortgage Process:

Mortgage acquisition is a very engaging process involving various stakeholders in the property market such as the Ministry of Lands, Lawyers, Valuers, and Quantity Surveyors etc.

The first step towards taking a mortgage is an appraisal carried out by a team of experts at HF once identification and income documents are availed. Upon review and approval by the Housing Finance team, the external stakeholders are then charged with the responsibility of ensuring that the right transfer of documents has been done. This process can take a maximum period of 3 months.

For more information on mortgage solutions, please send us an email on diaspora@housing.co.ke or visit our website www.housing.co.ke.

No matter your needs, Don’t let your home away from HOME be a factor to you not investing in your motherland.

Diaspora frequently asked questions on Mortgages

What mortgage products do I qualify for while in abroad?

At Housing Finance we have products for non-resident Kenyans or foreigners who would like to enjoy the banking services and products provided in Kenya.

We have a wide range of mortgage products available to you. These include property (plot, apartments, and houses) purchase, construction of residential and commercial houses and much more.
We can finance up to 85% the price of the property.

If I have already changed citizenship, do I qualify for a mortgage?

Yes you do. Under the new Kenyan constitution, dual citizenship is allowed.

As long as you have a valid Kenyan passport and a valid foreign passport you can apply for a mortgage.

Can I start saving for a mortgage while abroad?

Yes. There are savings accounts targeting those who would like to save towards owning a home. Such accounts include but are not limited to the following:

The Crossover Savings Account is an account that offers you very attractive features that enable you to save for long term projects such as home ownership or any other dreams you have in mind.  These features include earning high interests on the deposit made to the account, earn loyalty points on every deposit made into the account, access to 100% mortgage financing, up to 25% discount on commitment fees, up to 2% discount on mortgage interest when applying for a mortgage loan and much  more.

The Housing Development Bond (HDB) on the other hand is also good for those who want to set aside money for putting up a home. The HDB requires a minimum of Kshs 50,000 and offers a saving of 5% on withholding tax. HDB gives you the flexibility of savings and withdrawal in case there is an urgent need for the money.

What is the process of applying for a mortgage?

The first step towards applying for a mortgage is to provide your income details to us i.e. net income, living expenses, rental income (if any).  We will appraise you and advice on the loan amount you would qualify for. This will enable you to budget and look for a property that you can comfortably pay for.

Once you have identified a property, you will need to submit your full application to us for approval. On approval, we will give you an offer letter which you need to accept by signing and return to us.

How do I construct when away?

This can be done in two ways; Makao and through our construction product.

Makao is a product that offers a one stop solution for people who aspire to construct residential properties without going through the hassles of construction. There are pre-designed house types to choose from depending on your wallet size. All you need to do is provide your income documentation for pre-appraisal and sign up for the prototype of choice. The house will be delivered on your plot complete with keys and a house manual after a pre-determined period.

Alternatively, you can choose a team of professionals to carry out your construction. HF has an in-house team to vet and oversee the project to ensure the construction is done to detail. The funds are disbursed in stages after thorough site inspections are done.

As a developer in the Diaspora, how would HF assist me?

HF would finance you in developing the project under our construction product(s).

We would also market and sell the houses through our Property Point and finally provide mortgage to the end buyers of the project.

  

I work for an international organization on contract. Is it possible for me to still qualify for a mortgage?

Yes. When considering your application, we would look at several factors such as the stability of the organization, your profession within the organization, duration you have worked with the organization and number of renewed contracts.

We also consider your other sources of income e.g. rental income in Kenya and spouses income.

How do I get more information?

Visit our website Diaspora section www.housing.co.ke or write to us on propertypoint@housing.co.ke or diaspora@housing.co.ke or call us on 3262000/ 3262364/ 3262389