A first in B.C. at Tk’emlups
In the next two weeks, a member of the Tk’emlups Indian Band (TIB) will become the first person in B.C. to secure a homebuilding loan through a program designed to cut red tape for band members seeking mortgages.
The program is part of the federal First Nation Market Housing Fund, aimed at increasing housing choices on reserves.
While it has already been adopted by some bands in Eastern Canada, the TIB is the first in B.C. to roll out the program.
Before the fund was developed, program consultant Scott Flamand said getting a bank loan to build or buy a home on reserve lands was a drawn-out hassle.
Because reserve land can’t be seized by banks if a homebuyer defaults on a mortgage, Aboriginal Affairs and Northern Development Canada was originally responsible for guaranteeing band members’ loans.
That wasn’t usually a speedy process.
“You might have been already qualified at the bank and just needed a guarantee from them, but the government would still have to approve it and it would still take six to eight months,” Flamand said.
“There was one I heard of where it took over a year to get it.”
Through the new program, the band negotiated with the Bank of Montreal to provide loans to its members, which the TIB guarantee themselves.
Negotiations with other banks are also ongoing.
Loans can be as high as $400,000 for a new build or home purchase.
Renovation loans between $5,000 and $10,000 are also available.
Flamand said interest rates are similar and, in some cases lower, than what someone would pay to build or buy in the City of Kamloops.
TIB housing manager Dan Rodgers said he hopes the program will encourage more band members to build and buy — and ultimately, stay — on the reserve.
“There is a fairly long housing list for the band and the challenge would be to provide enough housing to meet the needs,” he said.
To qualify for a loan under the program, a band member must be 19 or older, have access to a lot on the reserve, meet a lender’s approved minimum credit requirements and have no default with the band longer than 30 days.
While not all band members will qualify for a loan, Rodgers said bank staff plan to offer financial advice and mentorship to members who are aspiring to own a home in the future.
He also hopes to set up workshops for high school-aged band members, which would explain credit ratings and the importance of savings plans and emphasize home ownership as a goal.
Rodgers said it is not uncommon for several generations of one family to share a house on the reserve, noting making home ownership a viable option for adult children still living with their parents “would alleviate a lot of the pressures in our community.”