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News Releases

 

RBC first to offer unique mortgage program to First Nations members

Program helps First Nations capitalize on economic growth opportunities

TORONTO, May 13, 2009 — RBC today announced a new mortgage program, the Leasehold Mortgage Program that will provide First Nations members with greater flexibility and choice when it comes to financing the purchase or construction of a home. It also helps create marketable housing in reserve communities.

"RBC has worked with First Nations leaders/governments for many years to find and provide options for financing a home in the same manner that is offered off a reserve," said David Cutway, manager, Residential Mortgages Policy, RBC. "Created by RBC, this new CMHC default-insured program does just that. It allows qualified borrowers - on qualified reserve lands - to obtain a home mortgage, benefitting both the purchaser and the First Nation community."

Options to finance on-reserve housing in the past have been limited. For example, First Nations members had to obtain a band or Ministerial Loan Guarantee (MLG) to secure a loan to purchase a home on reserve land. In addition, the First Nation government was responsible for the construction, maintenance and repair of these homes, which is why many turned to leased land options to capitalize on opportunities for greater economic growth.

The Leasehold Mortgage Program can help First Nations improve economic development through the construction of new homes, renovations to existing homes, purchases of new or existing homes, and construction of duplexes to four-plexes. First Nations communities may also use the program to attract non-Aboriginal homebuyers to properties developed on leasehold land, such as the housing development projects undertaken by the Westbank and Tzeachten First Nations, both of which are located in British Columbia.

To implement the Leasehold Mortgage Program, a First Nation government must formally designate, in accordance with the procedure set out by applicable law, reserve land for leasing purposes. Qualified individuals who want to purchase or build a home on the reserve can apply for a Canada Mortgage and Housing Corporation (CMHC) default-insured RBC mortgage. Once the borrower and the property are approved by RBC and for CMHC mortgage default insurance, RBC can make a loan to the individual.

"Some First Nations are structuring their land tenures to allow for social and mid-market housing for First Nations members only, while others see tremendous benefit in sharing the lands with the community at large," explains Dale Sturges, national director of Aboriginal Banking, RBC. "This unique mortgage program enables First Nation communities to create an environment with full market potential. It also helps many Canadian families who want financial security and are seeking the opportunity to grow their personal worth through home ownership."

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Media contact:
Jackie Braden, (416) 974-2124


 


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05/13/2009 10:05:33