Considerations for Indigenous and Northern Housing Solutions Clients.
In addition to a Ministerial Loan Guarantee (MLG), Canada Mortgage and Housing Corporation (CMHC) is now accepting four additional alternative types of security for projects on First Nation lands. These four options are applicable to many CMHC and National Housing Strategy funding programs, including Affordable Housing Fund, Apartment Construction Loan Program, Seed, and Section 95.
Alternative Types of Security
Security Type
Description
Required Documentation
Pledge of land
The land must be:
held by a First Nation or Indigenous Development Corporation
registered in a Provincial or Territorial Land Registry
not subject to a prohibition against seizure
Copy of any registered encumbrances or agreements on title.
External appraisal report confirming the value of the parcel of land, zoning, permitted uses, restriction on land use and marketability.
Leasehold Interest
The leasehold interest must be:
permitted under a reserve land designation or a First Nation land code/constitution
registered in a land title or registry system
compliant with CMHC’s leasehold lending requirements
Copy of any registered encumbrances or agreements on title.
External appraisal report confirming the value of the leasehold interest, zoning, permitted uses, restriction on land use and marketability.
Business Revenue and Personal Property
First Nation business revenues, personal properties and assets can be considered as collateral toward a loan and may include, but are not limited to casino revenues, cannabis revenues, gas station, payday loans, etc.
The security must be enforceable.
3 year financial statements
Letter of Credit
Letter of credit must :
be issued by a bank (or Credit Union)
be irrevocable
indicate CMHC as the beneficiary
Letter of credit
Please note: Prior to starting the application review, CMHC requires your solicitor to review and confirm that the security satisfies CMHC's requirements.