Lending on First Nations Land
So, you have a deal that will require lending on First Nations land?
The good news is that the number of financeable First Nations developments increases every year. So, when you contact your lender about the application, let them know first that the application is for lending First Nations land and is a leasehold property. As well as the address and the number of years left on the lease. Most lenders will be able to tell you quickly from that information whether or not the development is approved for financing.
With an increase in developments approved for financing, more options are available for borrowers. For brokers, this leads to more available options for your clients. You will just need to get a little more information from your borrower to start.
One of the most important things to understand with lending on First Nations land is that each development is different.
Knowing where to spot those differences is a great way to ensure deals that deals like these go as smoothly as possible. Some examples of where the differences lie can be found in areas such as:
- If the development is on land owned by the Band vs land that has been allocated to an individual Band member
- When there are different leases, different property tax regimes, or different number of years left on the lease.
It’s also important to know what documentation you’ll require when the development is on First Nations Land:
- You’ll want to request a copy of the head lease and sub-lease from the borrower. They should have received this when they bought the property. In the case of a purchase, can get this from the vendor.
- You’ll need a copy of the most recent property tax notice.
- If it’s a purchase, you’ll require a copy of the vendor’s title.
When a deal involving lending on First Nations land comes across your desk, contact the professionals at Kokanee Mortgage.
