Canada's New Government invests $300 million to create home ownership opportunities for First Nations on-reserve

    OTTAWA, April 20 /CNW Telbec/ - The Honourable Jim Prentice, Minister of
Indian Affairs and Northern Development and Federal Interlocutor for Métis and
Non-Status Indians, and the Honourable Monte Solberg, Minister of Human
Resources and Social Development and Minister responsible for Canada Mortgage
and Housing Corporation, today announced a $300 million First Nations Market
Housing Fund that will give First Nations people living on reserve a better
chance to own their own home.
    "This fund represents a fundamental shift in how Canada's New Government
supports housing on-reserve," said Minister Prentice. "First Nation home
ownership is well below the national average. Not enough people living on
reserve know the feeling that comes from owning their own home. This approach
will support the development of a housing market on reserve, while fully
respecting the communal ownership of reserve land."
    The First Nations Market Housing Fund is a new and innovative approach to
give First Nations members the opportunity to own their own homes on reserve.
A market-based approach will increase access to financing for First Nations,
enabling more individuals to own or rent their own home on-reserve. It is
anticipated that up to 25,000 new housing units over 10 years could be
provided through this fund.
    "Canada's New Government is committed to providing First Nations
on-reserve with the same housing opportunities and responsibilities as other
Canadians. This innovative approach will improve housing on reserve, increase
the housing supply and provide First Nations families and individuals with a
means to build equity and generate wealth," said Minister Solberg.
    "The housing conditions of First Nations are well known and require
urgent attention. We will be consulting with our Chiefs as we are anxious to
maximize the benefits to all First Nations," said Assembly of First Nations
Yukon Regional Chief Rick O'Brien, co-chair of the Chiefs Committee on
Housing. "We welcome today's announcement as it's one important component in
an overall solution."
    Canada's New Government is committed to working in partnership with First
Nations and the financial community to create sustainable housing solutions
supported by strong accountability and governance structures that address the
long-term on-reserve housing needs of First Nations.
    The federal government will engage First Nations communities and
financial institutions on implementation of the fund.
    The $300 million investment initially announced in the 2007 Federal
Budget, is in addition to existing federal funding of $261 million annually to
improve on-reserve housing in all First Nations communities.



    Overview of Federal Housing Support on First Nations Reserves

    The need for adequate, affordable housing on-reserves is considerable.
According to the 2001 Census, 27.7% of on-reserve households were living in
inadequate or unsuitable housing and unable to afford acceptable alternative
housing. This situation leads to poorer economic and social outcomes and
contributes to the gap in quality of life for First Nations on-reserves
compared to the Canadian population in general.
    The federal government invests approximately $261 million per year in
on-reserve housing needs, including $138 million from Indian and Northern
Affairs Canada (INAC) and close to $123 million from Canada Mortgage and
Housing Corporation (CMHC).
    In addition, $295 million has been committed over five years to help
stabilize current housing conditions on-reserve.
    First Nations provide housing in their communities, in part by
administering these government funds, and by identifying and obtaining
additional funding from other sources to support these needs.
    In recent years, a number of First Nations have implemented successful
housing policies and management regimes, and pioneered financing techniques
leading to better housing outcomes and support for market-based housing. First
Nations continue to seek innovative approaches to improve housing in their

    First Nations Market Housing Fund

    Canada's New Government announced in Budget 2007 an investment of $300
million for market housing on-reserve which it is using to establish the First
Nations Market Housing Fund. The fund will help families and individuals of
First Nations living on-reserve to own their own home - a home they desire
based on their housing needs, financial situation and personal tastes.
    The fund is an innovative new approach to ensuring that First Nations
members on-reserve can have the opportunity to obtain loans from financial
institutions and build, buy or renovate a house on-reserve lands. This will
not only increase the housing supply, but will provide families and
individuals on-reserve the means to build equity and generate wealth.


    People who live off reserve can obtain loans to buy their own homes
because lenders receive security in the form of a mortgage on the property.
    At present, it is difficult for someone living on-reserve to obtain a
housing loan because the land belongs to the community and not the individual.
This makes traditional forms of mortgage security inappropriate.
    The new First Nations Market Housing Fund will help individuals on-reserve
to obtain loans. The fund will provide financial backing to First Nations that
meet certain criteria, such as a demonstrated ability to manage their
finances, loans and housing. The First Nation would provide financial backing
to members on-reserve who want to obtain bank loans.


    Once the fund is established, housing loans can be provided by lenders to
First Nations residents through the following process:

    - Once the fund qualifies a First Nation, it will provide financial
      backing to it. This would be like collateral. The fund's backing will
      allow the First Nation to negotiate an arrangement with a lender or
      lenders to allow its members to obtain housing loans.

    - Once the First Nation has negotiated the arrangement with the lender or
      lenders, members of that First Nation will be able to apply for a
      housing loan, in the same way households do off-reserve, with the same
      lending terms and conditions. Lenders will review the value of the
      house, the borrower's income and the borrower's ability to repay a loan
      when their other expenses are considered. Assuming the borrower meets
      the lender's criteria, he or she would be approved for a loan.

    - The fund will not be touched unless both the borrower and the First
      Nation default.

    - If the borrower continues to make the loan repayments, the First Nation
      does not have to repay the lender and the fund is not touched.

    - If the borrower fails to repay the loan, the First Nation would step in
      and remedy the default under the terms of its agreement with the
      lender, using the First Nation's own resources to meet the obligations.

    - If both the borrower and the First Nation are unable to meet their
      obligations to the lender, the lender could then turn to the fund for

    Not all First Nations will be able to meet the fund's criteria right
away. The fund will work with First Nations that do not qualify to help them
strengthen the way they manage housing in their communities so that they can
meet the fund criteria and obtain loans in the future.
    The fund will be run by a Board of Trustees made up of individuals drawn
from First Nations, financial institutions, such as banks and other lenders,
and the federal government.
    The fund will provide yearly reports to the Government of Canada
addressing its business plans, operations and finances.
    Canada Mortgage and Housing Corporation (CMHC) will manage the day-to-day
activities of the fund in the initial years, under the direction of the Board
of Trustees.
    Canada's New Government expects that the fund will help to provide for up
to 25,000 housing units on-reserve over 10 years.

For further information:

For further information: Minister Prentice's Office: Deirdra McCracken,
(819) 997-0002; Minister Solberg's Office: Lesley Harmer, (819) 994-2482; INAC
Media Relations: (819) 953-1160; CMHC Media Relations: (613) 748-4632; This
release is also available on the Internet at and

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