Opportunity to Build on Multiple Owned Maori Land - Kainga Whenua

Housing Minister Phil Heatley has announced that from the 3rd February, Maori who want to build on their ancestral land will have an opportunity through an innovative partnership between Housing New Zealand Corporation and Kiwibank.

The partnership was formally recognised at the Beehive when Housing New Zealand and Kiwibank signed a participation agreement to offer a home ownership product called Kāinga Whenua.

Why has Housing New Zealand developed this product called Kāinga Whenua?
To give Maori a home ownership opportunity to build, purchase or relocate a house on multiple-owned Māori land.
It is difficult for Māori to own a home on multiple-owned Māori land. The special nature of Māori land, means that it cannot be sold, and banks are unable to meet their standard security needs for mortgage security.
With a Kāinga Whenua loan, Kiwibank can lend 100 percent of house building costs or the purchase price of the house, up to $200,000, as long as the borrower has a right to occupy the land, a valuation from a registered valuer and a satisfactory building contract. No deposit is required for a loan below $200,000.

Is Kiwibank the only bank involved?
Yes, Kiwibank is the sole provider. The partnership with Kiwibank enables Housing New Zealand and Kiwibank to test/pilot the processes to ensure they are meeting the customers needs. The product may be extended to other lenders in the future.

Housing New Zealand is also partnering with a number of iwi around New Zealand to do larger developments on PapaKāinga land. Kāinga Whenua will make home ownership possible on that land.

What is Housing New Zealand’s role?

Housing New Zealand will insure the loan and Housing Partnerships Project Managers will support customers through the application process through to the actual building, or relocation of a house onto the land.

Who can apply for the Kāinga Whenua?
Kāinga Whenua is available to first home buyers, or people who have previously owned a home and are in the same financial position as a first home buyer
The borrower must earn under $85,000 or three or more borrowers can earn under $120,000. This multi-borrower option that allows three or more borrowers, in a single household, to apply for the loan, makes a loan more feasible for multi-generational households.

What does Kāinga Whenua mean?
*This name combines the concepts of home/homestead (kāinga) and attachment to the land (whenua)

When will Kāinga Whenua be available?
From 3 February 2010

How do people apply
Information will be on Housing New Zealand’s website. http://www.hnzc.co.nz/hnzc/web/home.htm

The first step will be to contact Kiwibank to see how much they can borrow.

What can build/relocate with a Kāinga Whenua loan?
Under a Kāinga Whenua loan, the house needs to be:

 built on wooden piles
 one storey of at least 70 square metres
 located on mainland North or South islands
 have reasonable road access

What is the eligibility criteria for a Kāinga Whenua loan?
To be eligible for a Kāinga Whenua loan a borrower needs to meet all of the following requirements:

• Earn up to $85,000 a year as a one or two income household. For three or more borrowers, the household can earn up to $120,000
• Meet Kiwibank and Kāinga Whenua lending criteria
• Provide satisfactory proof of income to Kiwibank
• Live fulltime in the house
• Be a first home buyer, or if you are not, be in the same financial position as a typical first home buyer in terms of assets and income
• Have a licence to occupy the land you wish to build on
• The land needs to be Māori land that can’t be mortgaged, and either owned by four or more beneficial owners or have the land ownership vested in trustees of a trust or incorporation, created under the Te Ture Whenua Māori Act 1993.
• Have a good credit history that is acceptable to Kiwibank.

Are the any exceptions to the criteria?
There may be. For instance, properties could be built with concrete floors where alternative security is offered or the lending cap of $200,000 could be increased in special circumstances to allow for larger families.
People should call Housing New Zealand on 0508 935 266 if they want to discuss this further
How long will it take to get a Kāinga Whenua loan
While getting a loan is usually a simple process, there are complexities involved in securing a licence to occupy multiple-owned Māori land, which can make it quite a long process.
There will be support along the way from Housing New Zealand and the Maori Land Court.