Mwalimu Sacco mortgages – Requirements, How To Apply

Mwalimu Mortgage Product

Mwalimu National Sacco jointly with other Sacco’s and banks have signed a partnership with Kenya Mortgage refinancing company (KMRC) to support and accelerate implementation of National government agenda on affordable housing by availing mortgage loans to Sacco members for development/purchase of residential houses across the country.

The Key Features of Mortgage product Target market

All Mwalimu Members

Purpose of the loan

• Construction of a residential
• Purchase of a Residential

Maximum Tenor

25 years subject to the borrower’s retirement age of 60 years.

Amounts

1. World Bank Funding;- Loan size up to 8M

In this scheme of affordable mortgage loan financing the following are the key features;-

1. Minimum Loan amount of Ksh500,000
2. Maximum Loan amount of up to Kes 8 million
3. Loan to Value (LTV) ratio is 90% + costs (costs covered by short term loans)

MWALIMU MORTGAGE

Repayment period up to 25 years subject to borrower’s retirement age maximum of 60

Interest Rate

9% p.a on reducing balance basis.

This is equivalent to KMRC rate currently at 5% plus 4%margin=9%.

Any changes on the rate will be determined by KMRC rate and approved by the board.

Negotiation fee

1% one off.

Insurance

Property and life insurance cover by the borrower during the entire term of the mortgage. Incase of failure to renew the insurance policy, the Sacco will renew and pass over the cost to the customer.

Insurance shall be undertaken through MNS Risk and Insurance Brokers Ltd.

Valuation

The property must be valued, and a valuation report submitted. This property will be revalued after every three years. This will be done by Mwalimu National prequalified panel of valuers and valuation costs shall be borne by the borrower.

Disbursement

Mortgage disbursement shall be made upon completion of the security perfection and registration and only upon the member meeting all conditions set out in the letter of offer.

Late payments

Late payments will attract a penalty of 2% of the overdue amount

Mode of loan repayment

Repayment for mortgage loan shall be purely on check-off basis subject to adherence to 2/3rd rule.

Minimum Customer Information Requirements Applicants Identification

• Copy of applicant’s ID / passport
• 3 recent passport-sized color photographs of applicant
• Proof of address (copy of most recent paid utility bills (electricity/ gas/telephone), copy of recent credit card bills and any other credit facilities (if applicable)

Applicants Income Details Employed persons

1. Applicants will be required to have been in their current job for a minimum of six (6) months and at least 18 months of continuous
   1. Employment Letter including date of joining and
   2. present designation &
   3. terms of employment
2. Letter from the employer confirming employment
   1. Original or certified salary slip of last three months
   2. Previous employment proof (if required – copy of contract)
   3. Current account bank / SACCO statement for the most recent 6 months
   4. Evidence of any secondary income that is to be considered
3. Professional association membership certificate Practice license if applicable ( doctors, lawyers, CPAs )
4. Alternative ways of income verification such as bank / SACCO statements
5. Credit history and relationship with other lenders

Minimum period during which the customer has maintained a formal bank / SACCO account with any financial institution; and bank / SACCO account statements

1. CRB report for credit history check
2. Borrower’s Basic Fact Sheet in application form
3. Details of any credit transactions over last two years, including loan and collateral agreements
4. Confirmation that any existing loan agreements are currently up to date
5. Details and turnover of any existing accounts (of all types), for example average monthly balance, average monthly credits, and debits
6. Information about assets with other lenders (securities, savings, )
7. Evidence of past bank / SACCO in audited accounts

Property documents

1. Copy of title of the property (registered in name of seller)
2. Original title of the property if title already registered in name of borrower:
3. A search of land records / Survey of Kenya certifying ownership of the title
4. Photos of the property
5. Construction permit (if applicable), approved building plan,
6. Completion certificate
7. Sale-purchase agreement where property is being purchased
8. Verification that property is not on environment and social (E&S) exclusion list

For construction loans:

Original or where applicable certified true copies of the following:-

• Approved bill of quantity by a qualified and duly licensed quantity surveyor as
• Approved building plans by relevant
• NEMA approval as may be
• A copy of title/lease or other form of title for affordable housing and official search report
• Current receipts for payment of land rates and rent, if
• Surveyors report confirming location and identity of property
• Applicable insurance

Others

• Budget planner outlining income and key expenses
• Map to property for viewing and valuation of proposed security

Eligibility criteria for the housing mortgages

1. The eligible property to secure the loan must either
2. owner occupied
3. title residential properties
4. Free-standing or apartment
5. Properties occupied by close relatives of
6. The title must be free from any delinquencies and
7. The mortgage loan limit will be KShs 8 million
8. The tenure of the collateral:
   1. Full
   2. Leasehold with a minimum of 40 years from the date the loan is