Having adequate housing provides personal security, health and dignity and is a fundamental human right to all (UN-Habitat 2009), which legitimately satisfies the needs of a household and offers legal protection against forced evictions. The housing sector in Uganda like any other developing country has undergone a paradigm shift since independence, from state-sponsored to neoliberalism (private sector provision) but the low-income population still suffers from a huge housing deficit especially in urban areas. The lack of innovative and appropriate housing finance mechanisms, which are tailored to incremental housing processes, have aggravated the low-cost housing deficit in Uganda. It is against this background that this research sought to answer the question: “What is the effect of incremental housing finance on access to a core house and its upgrading? In answering this question, a desk-based review of related literature, which developed a theoretical framework for this research was undertaken followed by the field study that was conducted in the Stanbic Nam project in Mukono Uganda.

The findings from this study revealed that due to innovative planning and effective coordination of partnerships between Civil Society, the private sector and HFHU the core housing project was successfully implemented for the poor. The core housing pilot project ensured that all the selected beneficiaries have access to an interest free mortgage loan payable in a period of 10 years with 3 months grace period and the units were affordable to the selected poor households. It was also revealed that the loan repayment was successful since 94% of the beneficiaries completed their loan repayment in a period between 2-6 years even before the loan tenure which was 10 years. The project handed over certificates of ownership at the completion of loan repayment, which guarantees full ownership of the land and the house (this certificate is also a legally recognized land document in Uganda). However, HfHU has a global land title from which beneficiaries have started processing sectional land title deeds. After loan repayment completion (a precondition in loan terms that no one was allowed to make changes till loan repayment completion), home owners started to upgrade their housing unit and at the time of research 46% of the total respondents had done house upgrading in one way or another. Core-houses and basic services sanitation (VIP latrine) and water (a borehole although it did not last longer) were provided by the project. However, there was no electricity which formed the basis for house improvement after loan completion to connect electricity and water plus other upgrades.