It is everyone’s dream to own a house of their own, though with the ever increasing development costs and the rise in mortgage interest rates, such dreams are fast fading away.

Well, don’t despair, your dreams of owning a dream home might still be achievable, that’s if the draft National Housing Bill is passed by the cabinet.

In an interview with Business Daily, Tirop Kosgey, the Permanent Secretary in the Ministry of Housing said that the draft bill proposes the creation of a new housing fund with the aim of providing affordable mortgage loans.

Workers will voluntarily contribute five per cent of their monthly income to the fund which will be complimented by Treasury’s budgetary allocations which will be five per cent of the national budget.

Tirop Kosgey also said that he expects that employers will match the contributions made by workers who choose to become members of the housing fund. Mr Kosgey further stated that he expects that the fund will provide mortgage loans for home buyers at about 6.5 per cent interest rate, while savers will earn interest of about two per cent on their contributions. He added that members can opt out of the fund by withdrawing their savings plus the accrued interest income.

Simply put, this will be a form of saving scheme where workers voluntarily contribute five per cent of their monthly income to a housing fund. Their contribution will earn an interest of about two per cent and when a member decides to leave the fund, they can withdraw their savings plus their accrued interest. The draft bill also proposes that Treasury allocates five per cent of the national budget to the housing fund. The fund will provide mortgage loans for home buyers at about 6.5 per cent interest rate.

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