# 5. Housing Scheme Fund Regulations, 2018 (Legal Notice No. 238 of 2018)

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·         The Regulations sought to mandate all employers to register with the Housing Fund, contribute to the Fund and establish a Fund to promote an affordable housing scheme.

·         Regulation 3 provides that the Housing Fund established under section 6 of the Housing Act shall be an affordable housing scheme for purposes of section 30A of the Income Tax Act.

·         Regulation 3(2) provides that an affordable housing scheme is differentiated into various schemes viz: social housing (designated for monthly income earners earning up to Ksh 19, 999); low-cost housing (designated for those earning between Ksh 20, 000 to Ksh 49, 999), mortgage gap housing (for those earning between Ksh 50, 000 to Ksh 149, 999), and middle to high income housing (for those earning Ksh 150, 000 and above).

·         Regulation 4 makes it mandatory for every employer to register with the Housing Fund as a contributing employer and shall register the employees as members of the Housing Fund. Employees are also obligated to register with the Housing Fund as contributing employees unless they are foreigners. Self-employed persons may also choose to register with the Fund.

·         Under Regulation 15 and 16, a person may apply to be granted a loan from the Housing Fund by making an application to the National Housing Corporation (NHC).

·         Under regulation 18, loans granted are to attract an interest rate of up to 7% on a reducing balance basis to be retained by the Fund or such other rate as may be determined by the NHC.

·         Employers and employees were to each contribute 1.5% making a total of 3% of monthly gross pay (capped at Ksh. 166, 000 per month) to individual accounts known as Housing Fund Credit accounts.

·         The Regulations were however quashed by the court and therefore their implementation derailed.
