Carcross/Tagish First Nation citizens are one step closer to getting bank mortgages that many Canadians take for granted.
After two and a half years of trying, the Carcross/Tagish First Nation has qualified to be part of the First Nations Market Housing Fund.
The fund, set up in 2008 by the federal government, is aimed at helping First Nation Canadians and their governments qualify for mortgages on reserves and lands set aside.
“For most Canadians like you or I, we could walk into a bank and take out a half-million dollar loan if our credit scores would allow it,” said Nelson Lepine, the CTFN’s director of infrastructure and finance.
“But when a First Nation applies for a loan, the banks require them to have 100 per cent security on that loan. It’s idiotic. With this system, the Market Housing Fund provides that 100 per cent security,” Lepine said.
What that means, essentially, is that with the fund’s backing, approved First Nations can backstop loans and mortgages for its citizens up to $14.9 million. If someone defaults on a loan or mortgage, the First Nation will cover it.
“The individual will go to the bank, get a pre-approved mortgage, and once they qualify, we internally administer most of the paperwork, and the fund itself will secure the funds,” Lepine said.
That person can then use the loan or mortgage to either build a house themselves, or hire a contractor to build it.
The fund also allows First Nations governments to take out loans, which can be used for everything from single-dwelling constructions to apartment building projects.
The most important part of the process, though, is that this all happens without the First Nation having to surrender its title to the land under the foundations.
That’s an important distinction. For most Canadians with a mortgage, if they default, the bank reclaims their house and the property its on. If that were to happen on a First Nations reserve or settlement land, it would mean the bank takes over ownership of the land. Because the Market Housing Fund allows First Nations to backstop their citizens’ loans or mortgages instead, if a family defaults, the First Nation pays off the outstanding loan and keeps the land.
“Once you have the First Nation that has been approved for credit enhancement, the work is really no more than for anyone else who wants to build their own house,” said John Beaucage, the director of Market Housing Fund.
He would know. He’s used the fund himself.
“You could go to the bank and arrange your financing just like anyone else. I built a house on a reserve, and I basically acted as a general contractor. I hammered nails myself, I hired somebody to build the basement, and I did the finishing work myself,” Beaucage said.
In Carcross, there are a number of options the First Nation could pursue with the fund’s backing, Lepine said. There are a couple of initiatives in the works right now, but because the First Nation is still finalizing its agreements with various funding partners, Lepine said he couldn’t discuss specifics.
He did say that Carcross citizens could see construction projects underway within the next year, however.
“We have lots of irons in the fire right now that are pivoting around this stuff,” Lepine said.
In order to qualify for the program, First Nations work with the fund to do an assessment of each government’s capacity, stability, and ability manage the risk associated with covering citizens loans.
Beaucage said that it often takes a First Nation government between five and six years to meet all the requirements to join the fund. The fact that it only took CTFN a little over two years shows how well the government is doing, he said.
So far 116 First Nations across Canada have joined the fund’s program, with 55 houses already complete, another 50 more in the works and loan commitments on hundreds more.
The Tr’ondek Hwech’in and Champagne and Aishihik First Nations have also qualified and work with the fund.
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