In the early 1990s, the access to housing finance was not satisfactory and financial institutions considered housing as an unproductive sector to finance. In such a situation, families themselves marshaled resources, acquired land, and building materials, and organized all the building construction activities. The houses were developed floor by floor, incrementally to improve their savings. To respond to such a situation, the Nepal Housing Development Finance Company (NHDFC) was established under the Finance Company Act of 1985. Its major objectives were: to improve the present housing delivery system, undertake new housing projects and provide housing credit. This paper makes an assessment of the NHDFC’s experiences in terms of types of households served, the number of houses produced, borrowing and repaying behavior, and difficulty in expanding loans. The paper begins with a description of the urbanization process, land and housing development trend, housing policy and programs, experiences of NHDFC, and, finally, concludes with recommendations for further improvement in the housing finance system in Nepal.