This paper is based on research conducted in Eldoret Municipality among low-income estates, namely Langas, Huruma and Kamukunji. The main objectives were; to identify the health, environmental and housing problems; to examine government housing policy in relation to low-income housing. The results revealed that low-income housing impacted negatively on human health and the environment. Health problems identified include malaria, typhoid and cholera; Environmental problems include congestion, house pests, poor drainage, wastewater, air pollution and garbage. The results shows government policy is inadequate and mechanisms for enforcement are lacking, thus responsible for the housing problems of low-income groups. Government policies on low-income housing need to be reviewed to properly address the current situations by using cheap, affordable and locally available building materials. To improve the housing situation and alleviate the health and environmental problems associated with it, it is suggested that Eldoret municipal council should work closely with property developers to ensure that the necessary facilities and environmental infrastructure, such as piped water and sanitation, collection and disposal of waste, are provided. Furthermore there is need to promote the development of low-cost housing produced using locally available materials, in particular the use of soil bricks and prefabrication within the municipality.