Alternative types of security

Considerations for Indigenous and Northern Housing Solutions Clients.

In addition to a Ministerial Loan Guarantee (MLG), Canada Mortgage and Housing Corporation (CMHC) is now accepting four additional alternative types of security for projects on First Nation lands. These four options are applicable to many CMHC and National Housing Strategy funding programs, including Affordable Housing Fund, Apartment Construction Loan Program, Seed, and Section 95.

Alternative Types of Security
Security Type	Description	Required Documentation
Pledge of land	The land must be: held by a First Nation or Indigenous Development Corporation registered in a Provincial or Territorial Land Registry not subject to a prohibition against seizure	Copy of any registered encumbrances or agreements on title. External appraisal report confirming the value of the parcel of land, zoning, permitted uses, restriction on land use and marketability.
Leasehold Interest	The leasehold interest must be: permitted under a reserve land designation or a First Nation land code/constitution registered in a land title or registry system compliant with CMHC’s leasehold lending requirements	Copy of any registered encumbrances or agreements on title. External appraisal report confirming the value of the leasehold interest, zoning, permitted uses, restriction on land use and marketability.
Business Revenue and Personal Property	First Nation business revenues, personal properties and assets can be considered as collateral toward a loan and may include, but are not limited to casino revenues, cannabis revenues, gas station, payday loans, etc. The security must be enforceable.	3 year financial statements
Letter of Credit	Letter of credit must : be issued by a bank (or Credit Union) be irrevocable indicate CMHC as the beneficiary remain in effect for the duration of the amortization period fully cover the loan amount automatically renew every year	Letter of credit

Please note: Prior to starting the application review, CMHC requires your solicitor to review and confirm that the security satisfies CMHC's requirements.

For more information about one of these options, please contact your CMHC Housing Solutions Specialist – Indigenous and the North.