President Paul Kagame together with First Lady Jeannette Kagame last Friday and several government officials joined the investors to launch the construction of a new eco-friendly housing estate in Kigali.

The estate, dubbed Bwiza Riverside Homes, is expected to have over 2,200 affordable housing units upon completion.

Construction will be done in five phases, with the initial phase expected to see at least 252 houses completed by the end of this year.

Nestled between the lush hills of Karama in Nyarugenge District, the project will also have on site a day care centre, the ADHI TVET academy, and an Accredited Training in Methods of Sustainable Construction (AISLC) academy.

The estate, expected to cost over $100 million, is a public-private partnership between ADHI Corporate Group and the Government of Rwanda.

The move also raised optimism amongst Rwandans, mainly prospective home owners and industry players who said that it would relatively address the shortage of affordable housing units in Kigali.

Kigali alone needs over 310,000 housing units by 2032 to meet its rising demand.

On Monday, February 14, The New Times spoke in an exclusive interview, to Deudonne Nsengiyumva, the sales and Marketing Director of ADHI Rwanda, the developers, for a step-by-step guide on acquiring a home in the estate.

According to him, there are different styles of units that a buyer will have to choose from.

He said that prices range from Rwf16.5 million to Rwf86 million per unit.

However, only four models of units costing Rwf16.5 million, Rwf28 million, Rwf32 million and Rwf35 million have been put in the bracket of ‘affordable.’

The other two, added Nsengiyumva, include one of Rwf48 million and another of Rwf86 million, have been categorized as ‘non-affordable.’

"A buyer will need to verify that they are eligible for mortgage financing by registering with BRD (Development Bank of Rwanda) to obtain a clearance. BRD will perform a background check and verify that you fulfill all the eligibility criteria to access the 20-year mortgage at 11 percent,” he said.

The second step will be a visit to the model homes during which the buyer meets the ADHI sales team where they will explore the different home models depending on their income.

"They will then book a preferred home and sign their reservation contract. The contract is estimated at Rwf75,000.”

With a reservation contract in hand, Nsengiyumva pointed out that the buyer will then be guided to meet with a partner bank and get their loan application approved.

"Once your loan is approved, you will be required to deposit a 10 percent down payment to the selected bank, and your money will be deposited in an escrow account until your unit is ready. The bank will then issue a commitment letter to officially book the unit of your choice.”

Nsengiyumva highlighted that the final step will be transferring the property title deed in the buyer’s name.

This he said, will be done after the bank has sent an approved valuer who will inspect the house and approve that it matches the specifications on the contract. "The bank will then be required to release the remaining 90 percent and pay us on your behalf before the house is handed over.”

Meanwhile, ADHI Rwanda says that purchasing a non-affordable home will be done through Century Real Estate, one of the major real estate firm in the country.

Affordability

While majority of affordable housing projects are widely cheered by industry players, the pricing per unit has for the past left many Rwandans out of the bracket.

However, the new project seems to be relatively affordable based on the current annual average income of a Rwandan household according to Felix Nshimyumuremyi, the Director General of Rwanda Housing Authority (RHA).

For instance, he said, after making the down payment on the Rwf16.5 million unit, a buyer would need to pay only Rwf153,200 per month, in a period of 20 years at an interest rate of 11 percent.

If the same formula is carried out on the three other affordable units, then a buyer would have to pay a monthly fee of Rwf260,100 for the Rwf28 million house, Rwf297,270 for the Rwf32 million home and Rwf325,140 for the Rwf35 million unit.

The costs, he said, would require that the buyer has a monthly income of double the payment they are supposed to make per month.

Rwanda’s settlement policy stipulates that a household should not spend more than 50 percent of their monthly income on housing either for rent or mortgage.

"Actually, on standard it should not even go beyond 30 percent. Servicing a loan should be equal to or less than 30 percent, so that they are left with funds for other activities,” Nshimyumuremyi added.

Nshimyumuremyi didn’t disclose whether government would consider similar conditions but reiterated that adjustments to the policy are underway.