RBC first to offer unique mortgage program to First Nations
membersProgram 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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