The Voice of Canadian Credit Unions
Community Development / Human Interest /  •

A Roof Over Their Heads

The $300-million First Nations Market Housing Fund is helping Aboriginals across Canada obtain mortgages for homes on reserves

It’s hard not to get excited about housing listening to John Beaucage. “We’ve had houses with swimming pools, we’ve had houses with double car garages, we’ve had five bedroom houses with rec rooms,” Beaucage says.

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For almost 10 years, the chair of the First Nations Market Housing Fund (FNMHF) has seen all kinds of homes being built on reserves across the country. “Some of them are in remote areas in northern Quebec, others I’ve seen in the Yukon. We’ve had them all over Ontario. Down in the Maritimes they have some beautiful houses just outside Sydney, NS. Any kind of house that you would see in a typical urban neighbourhood anywhere in Canada is the kind of house we’re building with FNMHF,” says Beaucage.

Working in partnership with six credit unions and six caisses popularies, the fund, created in 2008, has thus far backed housing projects in 220 communities, which is almost a third of First Nation communities in Canada. And now, as Prime Minister Justin Trudeau calls for a “renewal” of Canada’s relationship with First Nations peoples, the $300-million FNMHF is poised to play an even greater role in helping to ease borrowing and building in the emerging housing market for band members living on reserve.

Laying the groundwork, building capacity

Financing and developing housing projects for Canada’s indigenous peoples is not without challenges. Limitations imposed by the Indian Act relating to the uses of communally owned reserve lands, the remote locations of many reserves and limited access to private financing like mortgages or housing loans have meant that market-based housing is a new concept for many First Nation communities. (The Indian Act is a statute administering Indian status, local First Nations governments and the management of reserve land and communal monies that was first introduced in 1876.) Arguably, the historical lack of market-based initiatives partially accounts for the poor living conditions on some reserves.

Now in its ninth year, the First Nations Market Housing Fund has provided 6,000 housing loans.

When the FNMHF was first established in 2008, the learning curve was considerable for Beaucage and his team. They had many challenges, not least of which was many of the people in First Nations communities aren’t used to borrowing — especially for mortgages. “We had to work to bring up their level of governance and economic education” among First Nations’ administrators, Beaucage says.

The first credit union to sign on as a lender with the fund was Vancouver City Savings Credit Union (510,353 members, $20.9 billion in assets). For Vancity, engaging in personal development initiatives to help train First Nation organizations was a crucial first step. “The act of lending is only one part of the fund’s work,” says Stewart Anderson, the credit union’s manager of Indigenous Partnerships. “A lot of work that the fund has done to this point is the capacity building and working with First Nation governments to firm up policy and procedures around their existing housing portfolio. This creates an environment that allows market housing to take place within the community.”

Membertou, an urban First Nation located near Sydney, NS, was one of the first communities to get involved with FNMHF. To date, they have built almost 30 homes with its support. Though market housing was not entirely new to the community when they partnered with the fund, Membertou policy coordinator Jenn Martin echoed the importance of preparation to get band members ready — and in some cases, even interested — in building their own houses. They’d have to understand how credit works, how to budget for their daily, weekly and monthly expenses, the different insurances involved and how to collect house plans and get quotes, as well as find a contractor, Martin says.

Capacity development needs can vary depending on the location, says Deborah Taylor, the fund’s executive director. Basic systems taken for granted in an urban centre may not exist in a rural locale. In some communities, for example, systems are needed to ensure housing is built to code and that the right contractors, construction companies and home inspectors are lined up. Accessibility to building materials and contractors, as well as the cost of materials, will also vary depending on geography.

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Taylor recalls one community she worked with in rural Quebec that had to get creative when finding contractors to build their homes. She points to the community of Wemindji, 1,400 kilometres north of Montreal. All the materials had to be shipped from the Montreal area and, as a result, that added a substantial amount to the cost of those homes, Taylor says.

Two of the latest housing loans to be backed by the FNMHF are for borrowers from Henvey Inlet First Nation south of Sudbury, Ont. Market-based housing is new to the rural community of 170 residents. Millie Pawis, director of finance and administration at Henvey Inlet, credits the First Nation’s relationship with nearby Caisse populaire de Verner limitée (5,384 members, $160 million in assets) and particularly with general manager Stéphane Méthot for the success of the loans. “It takes the right person inside the financial institution itself to want to help the people,” Pawis says. One loan for $200,000 will be used to build a new family home. Another $90,000 loan is for renovations to an existing home. Though loans through the fund differ depending on the community, they range from $30,000 to $150,000 for renovations and from $150,000 to $450,000 for new home construction.

Sylvain Bilodeau, a senior manager at Caisse populaire de Verner limitée, agrees that First Nations and credit unions need to work together to further their communities. “It’s not all about money, it’s about growing as a community and region.” New to lending through the fund, Bilodeau is optimistic about his caisse working with more local First Nations. Though some credit unions may initially be intimidated working with band councils and the fund, Bilodeau said his team found the process simple.

Wait times frustrating

On the other side of the country, Jackie Rumney, a senior manager at Northern Savings Credit Union (16,185 members, $820.9 million in assets) in Prince Rupert, BC, says that making the decision to partner with the fund was simply about providing better service to their Aboriginal members. Before the fund was established in 2008, the only widely available program for financing new homes built on communal land was through a Ministerial Loan Guarantee obtained through the Department of Indigenous and Northern Affairs Canada (INAC). The process is known for extended wait times; band members can wait anywhere from a couple of months to more than a year to get financing approved. “We were  finding that it was really frustrating for our Aboriginal members,” Rumney says.

In contrast, the fund’s First Nations-led approach works to create relationships first, strengthening communities through its capacity development initiatives. Once a First Nation meets specific criteria, for example, demonstrating an ability to manage their finances, loans and housing, the community can formalize an arrangement with a lender or lenders to allow its members to obtain housing loans. In this manner, First Nation band councils guarantee their own members’ housing loans. This means quicker turn-around times — as little as 48 hours — to get members approved for home ownership, rentals and renovation loans.

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As the latest credit union to partner with the fund, Northern Savings will help get housing loans for band members of Skidegate First Nation on Haida Gwaii off British Columbia’s West Coast. Rumney says there are already 10 members from Skidegate waiting to apply. Rumney’s long-term vision for the partnership is to help other First Nations communities in northern BC do the same thing. “All credit unions have Aboriginal communities within their regions. We need to service and assist and help them attain their dreams and their goals, just like we do with all of our members,” she says.

Vancity’s Anderson concurs. For him, working with First Nations makes both good business and community sense. “As the market evolves there are going to be opportunities for the credit unions to be involved with local housing initiatives. From a credit union perspective, this is a good thing to be doing,” he says. “Get to know them, find out what products those communities want and then be prepared to participate if communities are interested in being part of the fund.”

“All credit unions have Aboriginal communities within their regions. We need to service and assist and help them attain their dreams and their goals, just like we do with all of our members” – Jackie Rumney, Northern Savings Credit Union

While credit unions from across the country — from BC to Quebec — are supporting the work of FNMHF, the organization is still looking for credit unions to partner with in Alberta, Manitoba, Atlantic and Northern Canada. “We are always looking for more regional lenders,” says Taylor. “It doesn’t cost a lending institution to work with us. They have to be regulated in Canada and need to be able to provide a high-level of service such as interest rate discounts and paying dividends that credit unions are normally known for. We have been pleased with the take-up so far, in the lenders’ interest and desire to serve the community well. It all starts with community mindedness,” Taylor adds.

Provided 6,000 housing loans

Following a 2015 interim report by the The Standing Senate Committee on Aboriginal Peoples which found “the poor quality of housing” in many communities to be “a distressing situation,” the 2016 Federal Budget announced $554.3 million over two years through INAC and Canada Mortgage and Housing Corporation to address urgent housing needs.

Now in its ninth year, the FNMHF has provided 6,000 housing loans. Though the total number of houses built is much lower, fund chair Beaucage is confident demand for market-based housing will continue to rise. “Our middle class is growing so there will be more potential buyers as you move forward,” he says. “We’re looking at having these houses be a generator of wealth for First Nation members — something that is taken for granted by Canadians.”

Having seen his daughter wait for a whole year to get approved for a housing loan through the INAC program at home on Wasauksing Nation in Ontario, Beaucage knows all too well the frustrations of trying to get a loan approved under the traditional systems. But he anticipates that the Wasauksing community, now in the capacity development stage, will get the chance to access housing loans quicker through the fund within a year. At the same time, Beaucage remembers seeing the pride beaming from fund recipient Nelson Breaker when his new two-storey home was finally ready. The home in Siksika Nation was the first privately nanced home backed by the fund in Alberta. Breaker spent five years saving up the $12,000 down payment for his $240,000 mortgage. “We cut the ribbon when they were building this house. He was so happy and
so proud that there was no subsidy to this house and that he was paying for it all himself because he was approved for a mortgage,” Beaucage recalls. “As these families are creating wealth, they’re creating something for their families — a legacy.” ◊