Housing is a fundamental component of quality of life. Without appropriate shelter, people cannot meet their basic needs and participate adequately in society. Housing issues can have flow-on effects for health, education and community wellbeing. Ethiopia has identified housing Problems as one of the key problems facing cities and towns. Hence, the purpose of this paper is to give an analysis on factors influencing accessibility and affordability of urban dwelling units’ particular emphasis on Ambo town. The methodology employed here is a descriptive analysis where the sources of the data are both primary and secondary. The study revealed that various factors have contributed to unaffordable and inaccessible housing units in Ambo town for government employees. Among these factors lack of enabling policy, low income of households, lack of financial institution, high cost of land for housing, unaffordable construction material cost and lack of low cost housing program in the town. These factors have also a great impact on tenure arrangement, physical quality and facilities of dwelling units.