The good news is that the number of developments on First Nations lands that can be financed increases every year. As a broker, you just need to ask a few more questions of your borrower.
The most important thing to understand is that each development is different. There may be differences if the development is on land owned by the Band vs land that has been allocated to an individual Band member. There are different leases, different property tax regimes, different number of years left on the lease.
All of that aside, there are some very good lending opportunities on First Nations lands. If you’re presented with a file where the property is located within a development on First Nations Lands, you’ll need to ask:
- Request a copy of the head lease and sub-lease from the borrower (they should have received this when they bought the property, or in the case of a purchase, they can get this from the vendor).
- Ask the client for a copy of the most recent property tax notice.
- If it’s a purchase, ask the borrower for a copy of the vendor’s title.
When you contact the lender, start by letting them know not only the address of the property but that the application is for First Nations leasehold property and the number of years left on the lease. Most lenders will be able to tell you quickly from that information whether the development is approved for financing or not.
Our MIC lends on a number of developments on Reserve land, both in the interior of British Columbia and at the coast.