Better Access to Home Financing for First Nations

Every First Nation family should have the opportunity to have a home within a strong community. Canada Mortgage and Housing Corporation (CMHC), in partnership with the Lands Advisory Board (LAB), is pleased to announce two policy enhancements that will create easier access to home financing on First Nation or Indigenous Settlement land.

CMHC will provide mortgage loan insurance for home financing secured through A to A leasing, an innovation led by the Lands Advisory Board. CMHC will also establish lower down payment requirements for First Nations borrowers, as they access insured home financing on-reserve.

These policy enhancements will allow First Nations to access home financing without a traditional Ministerial Loan Guarantee, provided by Indigenous Services Canada, as well as providing greater access to the First Time Home Buyer Incentive.

Loans for housing located on self-leased lands

To facilitate homeownership, without the requirement of a Ministerial Loan Guarantee, CMHC is introducing mortgage loan insurance for leasehold loans secured by an A to A lease for First Nation borrowers with an individual holding. Through an A to A lease, First Nation members who have an individual holding grant a lease to themselves. Once the First Nation member holds the lease, which they have granted themselves, they can then mortgage the leasehold property, through a financial institution. The A to A lease can be applied to a maximum two-unit property. The home must be for homeowner occupancy or a relative of the owner-borrower on a rent-free basis.

Easier access to mortgage loan insurance

On-reserve leasehold loans without a Ministerial Loan Guarantee will now be subject to CMHC’s standard policies for equity. To support greater access to insured home financing on-reserve, CMHC is removing the requirement for First Nation borrowers to provide a minimum 10% down payment from traditional sources. From now on, on-reserve leasehold loans without a Ministerial Loan Guarantee are subject to standard down payment requirement of 5%, which can be satisfied from an acceptable down payment source.

Quotes:

“The Lands Advisory Board supports initiatives of CMHC which will make it easier for First Nation governments to support their members in improving housing on reserve lands. A to A leasing is an innovation first developed in my community, Westbank First Nation, and it is good to see that CMHC recognizes the potential benefit of this option for other First Nations and is now able to provide mortgage loan insurance for A to A leasing.”

“These policy enhancements will provide First Nations borrowers more access to insured financing for homeownership, including through the new First Time Home Buyer Incentive. We commend the Lands Advisory Board for championing innovative housing solutions for First Nations, such as the A to A leasing concept.”

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As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers unbiased housing research and advice to all levels of Canadian government, consumers and the housing industry. CMHC’s aim is that by 2030, everyone in Canada has a home they can afford, and that meets their needs.

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For information on this release:

Leonard Catling
Media Relations
Canada Mortgage and Housing Corporation
604-787-1787
lcatling@cmhc-schl.gc.ca