Patch Africa Housing will now finance buyers of Stima Investment Co-operative Society’s low-cost houses in Ngara, Nairobi, under a tenant purchase scheme.
The firm, which is a subsidiary of Liaison Group, says that under the deal homeowners will pay 25 percent of the total purchase price as a deposit and the balance settled as rent-to-own payments.
The tenant purchase scheme will attract an interest of between seven and nine percent payable in 25 years.
The model works through a lease agreement where a portion of the monthly rent covers the buying 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.
He said the arrangement will be available for home buyers of Stima Investment’s low-cost houses in Ngara whose groundbreaking was last month.
The 449 units sits on a quarter-acre piece of land in Ngara and they will be built at a cost of Sh1.2 billion.
The project dubbed Stima Height has 214 studio apartments, each selling at Sh2 million and 235 one-bedroom units at Sh3.9 million.
Work on the project started on March 29 and it will take 24 months.
Stima Investment CEO Jonathan Kinyenze said although the deal targets only Stima Height for now, the net will be cast wider to allow the financier to fund other projects owned by Stima.
Some of the developments owned by Stima Investment that can be financed by Patch Africa Housing include the Ruaka Heights with 198 units of one, two and three–bedroom units.
“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.