The Loan Insurance Program On-Reserve with Ministerial Loan Guarantee

How can the program help First Nations?

The program may assist Band Councils or Aboriginal persons living on-reserve in accessing financing for the construction, purchase and/or renovation of single-family homes or multiple residential rental properties.

Who is eligible?

To be eligible, a borrower must:

• have a Certificate of Possession or have been granted use of the land by the First Nation
• be able to obtain a Ministerial Loan Guarantee
• satisfy the minimum requirements for taking out a loan with an approved lender and be able to support repayment of the loan
• for homebuyers: have savings or a Indian and Northern Affairs Canada (INAC) contribution; a minimum 5% of the lending value or approved costs of the house (for example, if the cost to build your house is $90,000, you must have at least $4500 as a down payment)
• for rental projects: have a minimum downpayment of 15% of the lending value. CMHC insured loans are available for qualified rental projects for up to a maximum of 85% of the lending value.

How does it work?

CMHC provides loan insurance to the Approved Lender (banks, Aboriginal Capital Corporations, credit unions, etc) to make loans on residential homes or projects located on-reserve.

• Security for the loan is made by a loan agreement with the Approved Lender, secured by a Band Council Resolution and a Ministerial Loan Guarantee obtained through Indian and Northern Affairs Canada (INAC). If the agreed repayment of the loan is not made, the outstanding balance is paid out to the Approved Lender through the Ministerial Guarantee by INAC on behalf of the applicant. INAC will then require repayment from the Band.
• The loan application process is carried out with the help of the Band Council who can assist in obtaining the necessary approvals.
• The Approved Lender works with the borrower in preparing the application package, and when complete, submits the application to CMHC for approval.
  

Where can I get more information?

Contact your Band Council;

Contact your local lender.

Contact your local CMHC office.