Understanding the First Nations Market Housing Fund’s Programs & Services

May 31, 2024

The First Nations Market Housing Fund’s foundational services are delivered in collaboration with First Nations leadership and administrators who share a vision for communities that have high-quality homes, take pride in homeownership, and benefit from economic opportunities. 

The Fund built these services by listening to communities’ needs, engaging with experts, and learning from First Nations communities that have succeeded in building their own housing markets. That’s why they call these services “products”—because they’re the results of a research process.

The Fund also looked to these First Nations communities to develop a list of must-haves for accessing support from the Capacity Development and Credit Enhancement programs. This article introduces some of the barriers to thriving housing communities on reserves, introduces these two core products designed to help First Nations address those barriers, and reviews program eligibility.

Insecure Financing

One key barrier to financing economic development on reserve is potential financers’ inability to guarantee (secure) the value of their loans.

First Nations property and assets are protected from outsiders. The Indian Act states that the real and personal property of an Indian or a band situated on a reserve is not subject to mortgage or seizure in favour or at the instance of any person other than an “Indian or a band,” blocking lenders’ ability to claim First Nations assets if a loan is not repaid. Language barring outside property seizure is also found in self-government agreements.

First Nations do not own their reserve lands. As the Crown technically holds reserve lands, they can’t be taken (seized) by the lender if the mortgage is not paid. So, while First Nations hold collective title to their land by law, there are clear ways that the use of that land is limited – and inequitable.

The steps to acquire, hold and relinquish lands by setting up a corporation or other business arrangements outside the Chief and Council system require a lot of resources. The Funds’s products are for on-reserve lands where the above barriers exist.

So, financers have good reason to feel insecure about lending to on-reserve clients. The Fund’s Credit Enhancement product helps eligible First Nations overcome this barrier.

Credit Enhancement

When First Nations have difficulty securing loans to purchase, build, or renovate homes on reserve, they may apply to the Fund’s Credit Enhancement product. Credit Enhancement offers lenders the security they need to loan First Nations money, guaranteeing that if the payment from the First Nation is delayed, the lender can seek reimbursement for those losses from the Fund.

The Fund has built relationships with select lenders and works with the First Nation to decide what types of lenders, loans, and terms may suit their community’s housing needs. They also collaborate on who can borrow, which lands are eligible, what the loans can be for, and how long the loans can last, setting out a roadmap for optimal community investment and successful repayments to lenders. This roadmap may offer rigid or flexible pathways, depending on the situation.

In addition to making secure investments in First Nations communities possible for lenders, the Fund protects First Nations interests by being selective about which lenders are eligible to participate.

Accessing Credit Enhancement

The Fund uses the Access Criteria to ensure that a community has the foundational elements to achieve its goals using Credit Enhancement. And if they need more time to be ready? Applying is also the pathway to accessing Capacity Development and building on their existing achievements. 

The Fund is looking for a community to have the “pillars” in place to dedicate financial resources, build capacity, and develop processes for improved housing systems in three areas:

1️⃣ Financial Management – This is the most precise area to measure, as the Fund uses financial statements, financial records, and debt repayment history to gauge financial wellness. They also examine whether the First Nation has qualified individuals for financial and loan management.

2️⃣ Good Governance – A good match for the Fund’s products will be practicing sustainable processes and systems for effective housing management and maintaining quality housing. They have a housing policy supporting market-based housing and “security of land tenure” for market housing that reflects their unique internal and external contexts. Whether a First Nation has good governance within the community is one of the more subjective elements of the three pillars.

🔒 Security of land tenure generally means recognized land rights that reflect the relationship between land and people – and prohibit the people’s removal from the land they are in relationship with. This can mean individual rights and collective rights to stay on their land.

3️⃣ Community Commitment and Evidence of Demand for Market-Based Housing – This is the most subjective area to evaluate, requiring evidence of community support for market-based housing. Community members need to understand the concept, want to participate, and have the financial means to afford homeownership and market rentals in the community.When a community isn’t strongly fulfilling the Access Criteria, the Fund may still offer the option to participate in the Capacity Development program and build on existing strengths for future qualification. See more details about the Access Criteria and evaluation here and see the flow of assessment below. (Click to enlarge)

Capacity Development

Whether a First Nation has been approved for Credit Enhancement or is strictly accessing aspects of the Capacity Development program, it supports getting in the best shape to build their housing market. It provides training, advice, and coaching to improve market-based housing skills in specific areas that need additional development.

A plan is created with the First Nation at the outset, detailing work under four categories to strengthen the pillars of the Access Criteria:

  • Planning, Development, and Operationalization
  • Staff Development
  • Educational Sessions
  • Land Use Developments

This support can be delivered to administration and leadership in areas such as developing policies and land use by-laws. It can be delivered to band staff through training and accreditations needed for good housing, financial, land, and building management. It can also look like community education about homeownership, personal finances, home maintenance, and other capacity building to ensure strong buyers for the Nation’s housing market. Learn more about the possible support options here.

Respecting and Supporting First Nations

No wraparound service exists that supports First Nations in addressing all of the social, economic, political, geographical, and historical challenges to support and provide adequate housing. The Fund provides support for communities to forecast what is needed to build their housing markets, builds capacity in communities that are close to readiness, and provides a Credit Enhancement product so that communities can borrow money to fund their housing initiatives. 

Whether your community has the qualifications and capacity to apply today or is planning for the future, the Fund is here to support leaders and administrators with information to reach your housing goals.