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How to go about Financing an Apartment

Apartments are a great choice for housing. They are affordable while requiring less individual responsibility. Additionally, you don’t have to deal with the repairs nor landscaping.

As a buyer, if you want a newly built apartment you’ll need to be aware of the necessary steps to acquire a mortgage. The mortgage qualifications are almost as similar as a single-family house(bungalow).

However, the difference between the two is that you as a borrower need approval and the project itself needs approvals. There are two main approvals while building in Kenya:(1) seeking approvals from the municipal councils and (2) from the National Environmental Management Authority (NEMA).

Several requirements must be fulfilled in order for the processes of approvals by these two main approving authorities to be fulfilled.

Apartment Requirements

The requirements for an apartment project to receive approval differ for different loan types. Certain things need to be in place.

  • The percentage of units presold by the developer
  • The number of units that will be home or rental homes
  • The percentage of units owned by any one investor
  • The number of units approved for loans
  • The amounts of money set aside for maintenance and repairs
  • Studies of how much money should be set aside for those purposes
  • Physical and environmental evaluations of the property by licensed engineers
  • Various types of property insurance

No Approval, No Loan

As a buyer find out if the type of loan you want approves the type of apartment you want.

However, it’s possible to buy without approval, but the buyer’s loan options will be fewer and they should be prepared to make a large down payment.

Patience is Needed

Most Kenyan developers are normally eager to gain approvals for NEMA and loans leading them to start early to try to meet the requirements.

Still, as a buyer, you might have to wait while the developer or builder applies for approval for the type of loan they want. The wait could be a few days or several years; if the project is in the early stages of construction or the approval process is delayed.


Furthermore, as a buyer try to find out the status of the necessary approval for the type of loan you want and apartment development in the home buying process.

Don’t put your hopes up before you get certain questions answered about how quickly you’ll be able to get financing, purchase the unit and move in. A real estate agent or lender should provide you with the information.

Besides if the delay is long, the interest rate for your financing could change. If you’re on the borderline of being able to afford that particular unit, you want to try to protect your risk against that rising interest-rate market. One way to accomplish that is to find a lender that offers an extended rate lock.

The Bottom line:

However, challenging it may seem for you as a buyer. The approvals offer major benefits to buyers, as well as developers and lenders.

This whole approval process gives you confidence. With approvals in place, you’ll feel assured that you’ll be able to get financing.

Additionally, other buyers will be able to get financing meaning that the project will be financially stable and that purchasers will have access to financing when the original buyers decide to sell their units.

Despite that, some apartments projects fail to get approvals for financing that you want which doesn’t happen often. That means buyers who are well-informed, flexible and patient have a good chance of closing on a new construction apartment that will be their very own new home. You can be such a buyer.