Unlocking tribal land for housing

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

Housing New Zealand chief executive Dr Lesley McTurk and Kiwibank chairman the Rt Hon Jim Bolger signed an agreement at the Beehive this morning to offer a new home ownership product called Kāinga Whenua.

Mr Heatley said with the Crown stepping in as guarantor for qualifying home loans the problem of Maori not being able to provide multiple-owned (papakainga) land as collateral to the bank had been overcome.

"It is difficult for Maori to own a home on multiple-owned Maori land," Mr Heatley said.

"The special nature of Maori land means it cannot be sold, which means banks are unable to meet their standard requirements for mortgage security.

"National campaigned on exploring ways to give banks more confidence to back papakainga housing.

"I want to thank the Maori Party for their support in the development and launch of this important initiative."

Today's partnership provides a home ownership opportunity for Maori to build, purchase or relocate a house on multiple-owned Maori land.

Kiwibank is the sole lender for the product and will approve and provide home loans, which will be insured by Housing New Zealand.

With a Kāinga Whenua loan, Kiwibank can lend 100 per cent 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.

Kāinga Whenua is available to first home buyers, or people who have previously owned a home and are in a similar financial position as a first home buyer.

The borrower must earn less than $85,000 or three or more borrowers can earn less than $120,000.  This multi-borrower option, which allows three or more borrowers in a single household to apply for the loan, makes a loan more feasible for multi-generational households.

Mr Heatley said demand for the product was likely to be modest, but noted that for many years Maori had been frustrated by their inability to get bank funding for papakainga development, and that Housing New Zealand was dealing with a number of Maori groups interested in helping their people to build on ancestral land.

Kāinga Whenua: combines the concepts of home/homestead (kāinga) and attachment to the land (whenua)

Q&A

Why is Housing New Zealand working with Kiwibank?

Building on multiple owned Maori land can be a long and complicated process.  A partnership with Kiwibank enables Housing New Zealand and Kiwibank to test/pilot the processes to ensure they are meeting the customer's 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 papakainga land.  Kāinga Whenua will make home ownership possible on that land.

How do people apply?

Information will be on Housing New Zealand's website - www.hnzc.co.nz.  The first step for prospective borrowers will be to contact Kiwibank to see if they qualify and if so how much they can borrow. 

What can I 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 sq m


• located on mainland North or South islands


• have reasonable road access

What are 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 joint borrowers, the household can earn up to $120,000


• Meet Kiwibank and Kāinga Whenua lending criteria


• Provide satisfactory proof of income to Kiwibank


• Live (or intend to live) fulltime in the house


• Be a first home buyer, or if you are not, be in a similar 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 Maori 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 Maori 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 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 Maori land, which can make the process longer.

There will be support along the way from Housing New Zealand and the Maori Land Court.