Good news for would be first time home owners trying to swim through the complex issue of affordability. Mortgages have been hard to come by in the past as commercial banks had been reluctant to extend long term loans. Now the government seems to have come up with a solution. It has announced an initial Rwf200 billion fund to help plug the housing shortfall of at least 34,000 annually that is needed to mitigate the shortage. The equally good news that comes with the Affordable Housing Financing Fund is that it seeks to cap the mortgage interest rate at 10 per cent, down from the usual 17 per cent or more that financial institutions have been charging. The guarantee facility will help cushion developers and producers of locally manufactured building materials. It is estimated that, as a result, the cost of housing will be slashed by at least a half of the current rates. Real estate developers have welcomed the move, what remains to be seen is whether it will translate that into cheaper housing. Current housing projects such as the Vision City are way out of reach of the middle class due to what is seen as inflated prices. So, in order for the housing fund to really serve its main purpose; availability of affordable housing, there is need to put in place some supervisory body to make sure developers honour their side of the bargain. It would be a shame if developers only saw the fund as an opportunity to make a killing at the expense of the government and the primary beneficiaries. It will need vigilance.
