Using a tenant purchase program, Patch Africa Housing will now provide financing to purchasers of the affordable homes built by Stima Investment Co-operative Society in Ngara, Nairobi. According to the company, a Liaison Group subsidiary, under the terms of the agreement, homebuyers will pay a deposit equal to 25% of the entire purchase price and the remaining amount will be paid through rent-to-own payments.
Interest on the tenant purchase plan will range from 7 to 9 percent and be due over a 25-year period. The strategy relies on a leasing arrangement in which a portion of the monthly rent serves as payment for the purchase price.
“We are offering offtake finance on this project so that homeowners will be able to access the units through an efficient financing mechanism which is the tenant purchase scheme,” said Patch Africa managing director Tom Mulwa on Thursday.
At the Radisson Blu Hotel in Nairobi Upper Hill on April 6, 2023, Chief Executive Officer of Stima Investment Society Jonathan Kinyenze (left) and Managing Director of Patch Africa Tom Mulwa meet. IMAGES | DENNIS ONSONGO | NMG
He said the arrangement will be available for home buyers of Stima Investment’s low-cost houses in Ngara whose ground-breaking was last month.
The 449 units would cost Sh1.2 billion to construct and are located on a quarter-acre plot of ground in Ngara. The project known as Stima Height offers 235 one-bedroom flats for Sh3.9 million and 214 studio apartments for Sh2 million apiece. The project would take 24 months to complete and work on it began on March 29.
Although the partnership currently only affects Stima Height, Stima Investment CEO Jonathan Kinyenze said the net would be expanded so the financier can support further Stima-owned projects. The Ruaka Heights, which has 198 apartments of one, two, and three-bedroom units, is one of the developments held by Stima Investment that can be financed through Patch Africa Housing.
“This arrangement is … for the Stima Heights project in Ngara but going forward, we will have a different arrangement of how Patch Africa Housing can finance other projects,” said Mr Kinyenze.