There are no funds for cheap homes, says Treasury CS

By , February 28, 2020

MORTGAGES:  The Affordable Housing Project (AHP) is staring at imminent collapse after the government admitted inability to raise enough cash to finance the project.

Treasury Cabinet secretary Ukur Yatani yesterday told the Parliamentary Transport Committee, chaired by Pokot South Member of Parliament David Pkosing that although his ministry had budgeted Sh45.2 billion for AHP and had allocated Sh5 billion in the current financial year, no cash has been released.

“We may not even be able to provide anything in the next financial year,” he said.

Out of the 500,000 housing units that the government promised to construct in 2017, only 228 units of the 1,370 units in the first phase have been completed.

“We had budgeted for the take-off of the project but we are unable to release funds because there is no money,” he said.

Despite receiving a request to avail the Sh4 billion to kick start the project, the ministry was only able to release Sh1 billion.

Yatani said incorporation of the Kenya Mortgage Refinance Company (KMRC) into the project will go a long way in the success of the programme.

KMRC was incorporated in April 2018, to provide secure long-term funding to primary mortgage lenders (banks and saccos) to increase the availability and affordability of housing loans to Kenyans.

His sentiments came after his Housing counterpart James Macharia complained that out of the allocation, only Sh1 billion has been released.

Due to financial constraints, Macharia told MPs that they are considering exploring the mortgage culture wand rope in the low-income bracket.

“Currently there are about 25,000 mortgages in the country, which by any standards is quite low.

The ministry is encouraging investors to come in and take risk by putting up houses for sale,” he said.

The two had been invited by the committee to shed light as to why the project is yet to kick off despite assurances that the project was ongoing.

Pkosing sought to know why Yatani assured the members of the committee that Treasury would pump funds into AHP, yet up to now nothing has happened.

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