Gulf African Bank and real estate developer Mi Vida Homes have signed a mortgage financing agreement to fund homebuyers at the company’s Garden City project at a rate of 11.75 percent.
The lender on Monday said the Shari’ah-compliant facility will be open to both customers and non-clients, and will also be extended to any new project by the homes developer.
The mixed-use development at Garden City comprises one, two and three-bedroom flats starting from Sh8.8 million—with a total of 221 units.
Gulf African Bank chief executive Anuj Mediratta said under the Shari’ah mortgage, a buyer will be paying a certain sum of money at fixed intervals of time, consisting of capital payment plus a rental amount to the lender.
This payment corresponds with a share in the ownership of the property. Subsequent payments increase the buyer’s share in the unit until a time when the financier no longer has any stake in the property and the right of ownership thus becomes transferred to the buyer.
“Our mortgage offering features transfers or takeovers from other financial institutions, outright purchases for new home buyers, diaspora mortgages and equity release arrangements,” said Mr Mediratta.
“Interested buyers will enjoy an approval time of 48 hours. The bank accepts multiple payment vehicles including pay slips, cash savings and the sale of investment property. Customers will also enjoy a repayment period of up to 20 years.”
Mi Vida Homes chief executive Samuel Kariuki said the partnership with the bank is part of the developer’s strategy to increase financing options for potential home buyers.
“We are constantly seeking partnerships with institutions that offer potential homeowners a wide variety of home financing options. Gulf African Bank has unique product offers for customers who prefer using financing models that are anchored on Shari’ah principles,” said Mr Samuel Kariuki, Mi Vida Homes chief executive.
Mi Vida had earlier announced that it will develop 800 affordable housing units in Riruta, Nairobi in a project estimated to cost more than Sh2 billion.
The developer is also eyeing projects in other areas as part of its ambition to deliver quality and affordable housing to the Kenyan market.
Mi Vida is a joint venture between private equity firm Actis and Indian construction giant Shapoorji Pallonji Real Estate.