Kāinga Whenua Loans for individuals
The Kāinga Whenua Loan Scheme is an initiative between Kāinga Ora and Kiwibank to help Māori achieve home ownership on their multiply-owned land. This can also include land received by iwi and hapu as part of Treaty settlements.
Kiwibank will approve and provide the loan, and you will need to meet their standard lending criteria as well as the Kāinga Whenua criteria. Kāinga Ora will underwrite the loan for Kiwibank. A Kāinga Whenua loan is secured only against the house, not against the house and land as with most home loans.
What can I borrow?
With a Kāinga Whenua Loan what you can borrow is down to what you can afford. No deposit is required for a loan below $200,000, but there is a deposit requirement of 5% for every dollar borrowed above $200,000 For example, a $400,000 loan would require a deposit of $10,000.
The approved loan value must include a 10% contingency amount – or 5% if a Master Build Guarantee is provided. Market interest rates will apply to the loan.
How does it work?
If you have a right to live on multiply-owned Māori land and can obtain a licence to occupy, a Kāinga Whenua loan can help you to build or purchase house on that land. The loan can also be used for repairs and maintenance for an existing house on multiply-owned land.
Kāinga Ora takes security over the house, through an agreement between the landowners, the applicant, and Kāinga Ora. This agreement requires the houses be built on piles, and able to be removed from the site if necessary. Applicants must also have a licence to occupy the land, a valuation from a registered valuer and a satisfactory building contract.
Am I eligible for a Kāinga Whenua loan?
To be eligible for a Kāinga Whenua loan for individuals, you need to meet both Kāinga Ora and Kiwibank’s affordability and eligibility requirements. Some of these include:
- the land needs to be Māori land that can’t be mortgaged (including land received by iwi and hapu as part of a Treaty settlement) and that is either owned by multiple beneficial owners or the land ownership is vested in the trustees of a trust or incorporation created under Te Ture Whenua Māori Act 1993
- you must be able to obtain a licence to occupy the land you wish to build on
- at least one borrower must live full-time in the house (i.e. it is not to rent or for use as a holiday home)
- you need to provide satisfactory proof of income to Kiwibank
- you have a good credit history that is acceptable to Kiwibank
What can I use a Kāinga Whenua loan for?
In order to take security over just the house, a Kāinga Whenua loan has a few requirements on the type of houses you can build or purchase. This includes when accessing the loan to renovate or maintain your house.
The requirements of a Kāinga Whenua loan are that the house needs to be:
- built on piles
- one storey of at least 50 square metres
- have reasonable road access
- be located on the mainland of the North or South Islands.
Next steps
To find out if you are eligible for a Kāinga Whenua loan, call Kiwibank on 0800 272 278.
Building on multiply-owned Māori land can be a long and complicated process. Kāinga Ora is here to support you through the process and you can call us on 0800 801 601 with any questions.
Please be mindful this may end up being a long process due to the complexities involved in securing a licence to occupy multiply-owned Māori land. Some of these steps don’t always happen in sequence, it’s just an overview on the process involved with using the Kāinga Whenua Loan.
Step 1. Decide to live on your multiple-owned Māori land
Consider the benefits, risks, and costs of home ownership in a multiple-owned Māori land situation.
Step 2. Apply for a Kāinga Whenua pre-approval
Kiwibank can assess your eligibility for a Kāinga Whenua loan and advise how much money you could borrow.
Step 3. Seek support from other owners of the land block
To qualify for a Kāinga Whenua loan will need the support of the other owners or trustees before you invest time and money. Once the loan is approved, the other landowners/trustees will need to sign the Kāinga Whenua (Land Tenure and Security Interest) Agreement (see Step 7).
Step 4. Design your home
You need to design your home bearing in mind the requirements of a Kāinga Whenua loan (see ‘What can I build/relocate with a Kāinga Whenua loan?’ above).
Step 5. Find a builder and produce a budget and plan
Your budget will need to meet Kiwibank’s lending criteria. You must also obtain all the council consents you need to comply with local bylaws.
Step 6. Get loan approval from Kiwibank
If your application fits with the Kāinga Whenua eligibility criteria, and Kiwibank’s lending criteria, Kiwibank will approve the loan.
Step 7. Sign the Kāinga Whenua (Land Tenure and Security Interest) Agreement
The Kāinga Whenua (Land Tenure and Security Interest) Agreement is made up of the licence to occupy part 3 page 9 (including a site licence) and a deed of mortgage. It needs to be signed by you, the landowners and Kāinga Ora. Note: this document is for reference and is only to be completed by Kāinga Ora – Home and Communities once we have received the final loan documents from Kiwibank. It will then be sent to your Solicitors to obtain the signatures of all parties involved.
Step 8. Register with the Māori Land Court
The Māori Land Court need to register your licence to occupy.
Step 9. Building starts
Building of new house, renovation or relocation of existing house starts according to the design, plan, and budget you submitted as part of your application.
Step 10. Progressive draw-downs
Timings and the finer details for progressive draw-downs will be unique to every Kāinga Whenua loan.
Step 11: Building complete
Once the building is complete you are now able to move in. Congratulations, you now have your own whare on your multiple-owned Māori land.
Uma na faafou le itulau: 31 May 2024