In Kenya, the dream of owning a home is often overshadowed by affordability constraints, limited access to long-term financing, and rising urban populations. As part of the government’s Big Four Agenda, affordable housing has been elevated to national priority status. Enter the Housing Finance Company of Kenya (HF Group)—one of the country’s oldest and most specialized mortgage lenders—offering a suite of affordable housing loan products designed to empower ordinary Kenyans to achieve homeownership.
This guide unpacks the structure, eligibility, benefits, and strategic use of HF Group’s affordable housing loans, particularly in the context of government-supported programs and partnerships with developers. It is tailored for first-time homebuyers, salaried individuals, entrepreneurs, and members of the diaspora interested in financing a residential property in Kenya.
Understanding the Role of HF Group in Kenya’s Housing Sector
A Legacy of Mortgage Innovation
Established in 1965, the Housing Finance Company of Kenya (HF Group) was created to address the severe housing shortages of the post-independence era. Initially owned jointly by the Kenyan government and British investors, HF evolved over the decades into a leading provider of home loans, construction finance, and housing development solutions.
As a licensed bank and mortgage finance institution, HF has consistently supported both individual buyers and large-scale developers in accessing financing to meet Kenya’s diverse housing needs.
Alignment with Government Affordable Housing Programs
Kenya’s Affordable Housing Programme (AHP), spearheaded by the State Department for Housing and Urban Development, seeks to construct over 500,000 low- and middle-income housing units across the country. HF Group has positioned itself as a financial enabler of this initiative by:
- Partnering with government-approved developers
- Offering reduced interest rates for qualifying homes
- Creating diaspora mortgage channels for Kenyans living abroad
🔗 Affordable Housing Programme – State Department for Housing
Key Features of HF Affordable Housing Loans
HF Group’s affordable housing loans are designed to make homeownership accessible to a wider demographic. Below are the primary features:
1. Loan Amount and Property Price Range
HF loans typically support property purchases ranging from KES 1 million to KES 10 million, depending on income levels and loan tenure. Properties under the AHP are usually priced under KES 5 million, qualifying them for HF’s low-cost housing loan packages.
2. Competitive Interest Rates
As of the most recent updates, interest rates on HF’s affordable housing loans range between 9%–12% per annum, often structured on reducing balance terms. Preferential rates may apply for:
- AHP-approved units
- Low- and middle-income borrowers
- First-time homeowners
Note: Rates are subject to Central Bank of Kenya’s guidelines and prevailing macroeconomic conditions.
🔗 Central Bank of Kenya – Rates & Regulations
3. Loan Tenure
Borrowers can choose repayment periods of up to 25 years, with the tenure determined by:
- Applicant’s age
- Type of employment (permanent, contract, business)
- Loan size
The longer the tenure, the lower the monthly repayment, but with a higher total interest payout.
4. Loan-to-Value (LTV) Ratio
HF typically finances up to 90% of the property value for salaried individuals and up to 80% for self-employed borrowers. This means the borrower must contribute a minimum of 10–20% as equity or down payment.
5. Flexible Repayment Options
HF offers a range of repayment flexibility including:
- Step-up repayment plans for clients expecting increasing incomes
- Top-up loans for home improvements or additional financing needs
- Early repayment options with no penalties for prepayment
Types of Affordable Housing Loans Offered by HF Group
1. Home Purchase Loans
This product is the most common mortgage type and is used to purchase a ready-built house from a developer or on the open market. HF works with approved developers for AHP projects to ensure affordable pricing and title deed security.
2. Construction Loans
For clients who already own land or intend to build through staged construction, HF provides construction loans disbursed in phases (tranches) based on construction milestones. This option is ideal for:
- Rural and peri-urban homeowners
- Borrowers with architect-approved plans
HF ensures all projects are professionally monitored by quantity surveyors and architects.
3. Tenant Purchase Schemes (TPS)
HF finances TPS properties in partnership with housing cooperatives and government institutions. Tenants gradually pay for and own the homes they occupy through structured monthly payments.
This model is popular among:
- Civil servants
- Members of housing Saccos
- Tenants in estate developments funded under PPPs
4. Diaspora Mortgage Loans
Kenyans living abroad can access affordable housing loans via the HF Diaspora Banking Program, allowing them to:
- Invest in homes or plots while abroad
- Finance construction on family land
- Support relatives with property purchases
Loan processing is digitized to accommodate overseas application and remittance flows.
Eligibility Criteria for Affordable Housing Loans
Eligibility for HF’s affordable housing loans varies by loan type and borrower category. General requirements include:
For Salaried Individuals:
- Minimum monthly income of KES 30,000
- Employment letter and 3–6 months’ payslips
- Bank statements for at least 6 months
- National ID and KRA PIN
- Employment must be in a recognized and stable institution
For Self-Employed or Business Owners:
- Registered business with at least 2 years of operation
- Certified financial statements or audited accounts
- Six months’ business bank statements
- Proof of regular income or contracts
For Diaspora Clients:
- Valid passport and foreign residence permit
- Proof of remittance or income source abroad
- Property purchase agreement or land ownership document in Kenya
- KRA PIN and Kenyan ID/passport
Required Documentation
Regardless of employment status, all applicants must submit:
- Loan application form
- Copy of national ID or passport
- Latest payslips or income proof
- Property offer letter or sale agreement
- Valuation report (arranged by HF)
- Bank statements (6 months minimum)
- Title deed or allotment letter for land (for construction loans)
HF also conducts credit checks through the Credit Reference Bureau (CRB) to assess loan eligibility.
Partner Developers and Housing Projects
HF collaborates with various public and private developers to finance pre-vetted properties under the AHP framework and other affordable projects.
Notable collaborations include:
- Pangani Housing Project – Nairobi City County
- Park Road Project – State Department of Housing
- Sakina Apartments, Karibu Homes, and Unity Homes
These properties are often sold at subsidized prices, and buyers can get fast-tracked loan approvals when using HF financing.
Advantages of Choosing HF Group
- Mortgage specialization with over 50 years in housing finance
- Deep network of valuation, legal, and project monitoring services
- Partnerships with developers and government
- Availability of group insurance, life cover, and home insurance
- Digital mortgage application platform
HF also offers account holders access to other services like salary accounts, mobile banking, and savings products to complement mortgage facilities.
Challenges to Consider
While HF’s affordable housing loans offer many benefits, borrowers should be mindful of the following:
- High interest rates compared to subsidized government loans or SACCO mortgages
- Loan processing time may take 4–8 weeks depending on documentation and property title status
- Hidden costs such as legal fees, valuation, and mortgage insurance must be budgeted
- Eligibility is subject to strict documentation and credit checks
How to Apply for an HF Affordable Housing Loan
Step-by-Step Application Process
- Identify a qualifying property – especially one within the AHP framework or HF-approved projects
- Visit your nearest HF branch or access the HF online portal
- Submit completed loan application form along with supporting documents
- HF will conduct a property valuation and credit appraisal
- Upon approval, you will receive a loan offer letter
- Complete the legal documentation process
- Funds are disbursed either to the seller, developer, or builder based on the loan type
Final Thoughts: Is an HF Affordable Housing Loan Right for You?
With rising urbanization and land prices in Kenya, HF Group’s affordable housing products offer a structured path to property ownership, particularly for first-time buyers and middle-income earners. Whether you are buying a home in Nairobi’s satellite towns or building on ancestral land in Kisumu or Nyeri, HF’s blend of competitive interest rates, flexible tenures, and government-aligned project financing can significantly reduce the barriers to entry.
Before applying, be sure to:
- Understand your financial capacity
- Compare HF offerings with SACCOs, commercial banks, and the Kenya Mortgage Refinance Company (KMRC) options
- Confirm property legitimacy and title availability
- Factor in the total cost of ownership (including legal, insurance, and maintenance)
For additional support, HF branches provide loan advisory sessions, or you can begin your journey with their online loan eligibility calculator.
Want to own your dream home in Kenya? HF Group’s affordable housing loans may be the bridge between aspiration and achievement.