Residential Earthquake-Prone Building Financial Assistance Scheme
The loan scheme will help unit owner-occupiers in residential earthquake prone buildings, in areas of high seismic risk, facing hardship over earthquake strengthening costs.
The scheme is being delivered and managed by Kāinga Ora – Homes and Communities on behalf of the Crown.
The scheme is to help owners living in their own unit or apartment and who are facing financial hardship, to get support to strengthen their building.
Without financial assistance some owner-occupiers may be forced to sell their home/unit because they can not afford their contribution to strengthening their building.
How it works
A low interest deferred repayment loan of up to $250,000 will be available to eligible applicants to apply for.
To make sure the scheme is targeted to those who need the most support, there is a range of eligibility criteria to be met.
- Loans are only for seismic retrofit to achieve seismic performance up to 100% NBS - i.e. no more than 100% NBS;
- The maximum loan secured against any one unit will not exceed $250,000 (but with limited discretion for the Chief Executive of Kāinga Ora to approve amounts above this level on a case-by-case basis);
- Loans will become repayable on the unit’s sale, 12 months after the last owner’s death, if the owner is no longer an owner-occupier or if the borrower defaults. Borrower default refers to a situation where there is another mortgage on the property and the borrower defaults on that loan and/or they become personally insolvent or obtain a loan by deception;
- The loan provides for voluntary loan repayments (with no early repayment fees);
- Loans will be secured by a mortgage, charge, or another security against the unit’s record of title (or equivalent);
- Applications to the Scheme will close on 30 June 2027.
Interest rate settings for the Scheme
- The below market interest rate for the Scheme will be set at 50% of the Reserve Bank’s monthly average of five year fixed interest rates;
- The interest rates will be fixed for five years with rate reviews at loan anniversary and interest rates will be calculated daily and compound annually.
Kāinga Ora discretion
Kāinga Ora’s Chief Executive has limited discretion to consider loan applications where owner-eligibility financial hardship or the cut-off date criteria are not met.
The first step is to check the eligibility criteria
- Be a New Zealand citizen, or ordinarily resident in New Zealand, or overseas persons allowed under the Overseas Investment Act 2005;
- Be an owner-occupier of that household unit for the duration of the loan, or a former-owner occupier (on the condition that the applicant returns to live in the property or sells within two years of the property being removed from the EPB register).
- the inability to obtain finance for EPB seismic retrofit from a Reserve Bank of New Zealand registered bank or non-bank deposit taker; or
- where finance from one of the above entities can be obtained it is conditional upon the unit being sold when the building is no longer earthquake prone; or
- where finance from one of the above entities can be obtained, but would cause the owner significant financial hardship;
- An acceptable financial standing, by not being in default of a mortgage, charge, or another security, or being subject to a Court Order or Tenancy Tribunal Order, or being currently insolvent
If you receive a loan under this Scheme from Kāinga Ora, you will become ineligible for an Accommodation Supplement from Work and Income. You won’t be able to receive an Accommodation Supplement until you’ve repaid the loan and the mortgage obligation is discharged. Further work is currently being undertaken to examine interactions between the Supplement and the Scheme.
Unit and building eligibility
- The Scheme will be limited to units purchased before 1 July 2017; or purchased prior to to the date that the building was confirmed as earthquake-prone
- The unit must be within a building in an area of high seismic risk and which is two or more storeys and contains three or more household units (or is a household unit within a mixed use building);
- The unit must be within a building where the relevant territorial authority has issued an earthquake-prone building notice.
If you have questions before you apply, you can email us at: firstname.lastname@example.org
- Download the Application for Conditional Eligibility Approval Form [PDF, 105 KB]
- Review the form to ensure that you have all of the required documents
- Complete, sign and submit the Application for Conditional Eligibility Approval Form to email@example.com, attaching the required documentation to your email
- Kāinga Ora will acknowledge your application
- Your application will be assessed by Kāinga Ora. We will contact you if further information is required
- Once your application has been assessed, we will contact you with the result of your application
- Under certain circumstances, if your Application for Conditional Eligibility Approval has been declined, you may be able to seek an exemption from the Kāinga Ora Chief Executive. We will be able to help you with that process
- If your application meets the eligibility criteria, you will receive a letter advising that you have received a Conditional Eligibility Approval. The Conditional Eligibility Approval will be valid for a period of 12 months
- Once you have all the information required, you will need to complete and submit the Application for Loan Approval [PDF, 75 KB]
- If approved, Kāinga Ora will create a loan offer, and provide this to your solicitor
- Once the loan documents have been satisfactorily executed, the loan will be available for draw down
- The loan will be secured by a charge against your property’s record of title
- Drawdowns from the loan will be able to occur according to your ‘Works Contract’
- During remediation, the borrowers are required to provide monthly updates to Kāinga Ora of progress of the remediation work. Borrowers will be able to move out of the property during the period of earthquake strengthening
- Once the remediation is complete, the owner is required to occupy the property as their principal place of residence, unless you have been approved as a former owner-occupier
- Borrowers are able to make voluntary repayments
Supporting documents for an Application for Conditional Eligibility Approval
The documentation that will be required to support an application may vary according to a particular applicant’s circumstances. Generally though, Kāinga Ora will need the following documents to support a loan application. Further detail is shown on the Application for Conditional Eligibility Approval Form:
- Proof of identify – verified copy of each owner’s current passport or current New Zealand driver’s license
- Proof of address – copy of a recent utility bill, or similar
- Proof of ownership – copy of the record of title, or a copy of the Agreement for Sales and Purchase
- Proof of resident status – documentation required depends on whether the applicant is a New Zealand citizen, ordinarily resident in New Zealand or an overseas person allowed under the Overseas Investment Act 2005. If:
o A New Zealand citizen, then – a certified copy of passport (unless verified document provided as proof of identity) or a certified copy of New Zealand citizenship certificate
o Ordinarily resident in New Zealand, then – a certified copy of passport or a certified copy of letter from Immigration New Zealand (confirming residency status) and a IRD Summary of Earnings or signed Statutory Declaration certified by a Justice of the Peace
o An overseas person allowed under the Overseas Investment Act 2005 – a certified copy of passport
- Proof of status of the building – copy of the Earthquake Prone Building notice, as issued by the Territorial Authority
- Proof of loan amount required – evidence of finalised or indicative levies required for the remediation work
- Proof of financial position – copy of letter from lender declining, or conditionally approving, a loan application or evidence of significant financial hardship, and transactional bank statements for the last three months
Further documentation will be required during the full application assessment process including a pre, and post remediation valuation, building and works insurance certificates, a copy of the Works Contract, and further information relating to the property ownership structure.
If I don’t meet all of the eligibility criteria, is Kāinga Ora able to exercise any discretion in approving a loan?
Where an applicant does not meet the owner eligibility financial hardship or cut-off date criteria, you may be able to seek discretion from the Chief Executive of Kāinga Ora (case-by-case basis). We will be able to help you with that process.
I have a Power of Attorney for my parent that it is an owner occupier of a property in an earthquake prone building. Will I be able to apply for a loan on their behalf?
You should discuss you individual circumstances with Kāinga Ora
What do I need to do before I can apply for a loan?
Detail of the requirements for a loan application are shown on the Application Form. The Territorial Authority will have to have issued an Earthquake Prone Building (EPB) notice for the building. Before applying for an Application for Conditional Eligibility Approval, the remediation work will have been identified and costed.
I don’t have a current passport or current drivers licence – is there another document that I could provide to prove my identity?
If you don’t have a current passport or current drivers licence, we are also able to use a statutory declaration, a national identity card, a Kiwi Access Card or a New Zealand firearm’s licence.
What happens if the cost of remediation rises after loan approval?
Any variations to the approved loan amount will be considered on a case by case basis
What happens if an owner who has the loan needs to temporarily relocate and live elsewhere for a period of time due to strengthening works?
If a unit owner needs to temporarily relocate during strengthening works this does not trigger the requirement to repay their loan with Kāinga Ora.
Will I still be able to get an Accommodation Supplement when I receive this loan?
No, any Accommodation Supplement would stop from the date of receiving the loan from Kāinga Ora. An Accommodation Supplement can start again once the loan has been repaid and any mortgage obligation is discharged.
How do I demonstrate 'financial hardship'?
Unit owners will need to show they have made a reasonable attempt to obtain finance from a NZ registered bank or non-bank deposit taker. Examples of that evidence are:
- If declined, a copy of a letter from the bank showing a loan has been declined.
- If approved subject to sale of this property after remediation work, a copy of the loan offer showing this condition.
- If approved but the approved loan would cause significant financial hardship, a copy of the loan offer and explanation why the offered loan would cause significant financial hardship.
Why does the unit have to have been bought before 1 July 2017?
Owners who have bought after this date would have been aware of the need for strengthening at the time of purchase, as from 1 July 2017 a new national system for managing earthquake prone buildings came into effect.
What is a “verified” passport or drivers license? And how do I get my documents verified?
Verification of a document shows your identity.
A verified copy is a copy of the original document which has been signed and dated by a ‘trusted referee’ who can confirm that it's the same as the original and that it shows the identity of the person in front of them.
The trusted referee must sight the original documentary identification, make a statement to the effect that the document provided is a true copy and represents the identity of the named individual and sign and date the statement: For example:
“I verify that this is a true copy of the original identification document and represents the identity of the person described in the original document.”
They then sign & date this statement, and provide their full name and occupation.
Most lawyers do verification of documents for free. In addition, the verification does not need to be by your usual lawyer, so you can use a lawyer at a Community Law Centre or another law firm.
Unlike a certified copy, the trusted referee will need to see you as well as your identity document when they are verifying it.
What is a “trusted referee”?
A trusted referee must be over 16 years old and a person from the list of approved certifiers for documents set out below.
The person must not be:
- Related to you, for example, your parent, child, brother, sister, aunt, uncle or cousin
- Your spouse or partner
- A person living at the same address as you
- A person involved in the transaction or the business requiring the certification.
Trusted referees can come from the following occupations:
- Chartered Accountant - Must be a full and current member of the New Zealand Institute of Chartered Accountants and entitled to use the title Chartered Accountant as defined by section 19 of the New Zealand Chartered Accountants Act 1996.
- Lawyer - Must hold a current practicing certificate under the Lawyers and Conveyancers Act 2006.
- New Zealand Police Officer - Must hold the office of constable as defined in section 4 of the Policing Act 2008.
- Justice of the Peace - A person appointed as Justice of the Peace under the Justices of the Peace Act 1957
- Notary Public - A lawyer authorised to officially witness signatures on legal documents, collect sworn statements, administer oaths and certify the authenticity of legal documents.
- Member of Parliament - Elected representatives to Parliament.
- Registered Medical Doctor - A health practitioner registered with the Medical Council of New Zealand under the Health Practitioners Competence Assurance Act 2003.
- Registered Teacher - Registered with the New Zealand Teachers Council and hold a valid current practicing certificate
Verification must have been carried out in the three months before you give us the copied document.
What is a “certified” passport, or other document? And how do I have my documents certified, as required?
A certified copy only shows that the document is an accurate copy of the original document.
The copy of the original document is stamped or endorsed as a true copy of the original by a person authorised by law to take statutory declarations in New Zealand, such as a lawyer, notary public, Justice of the Peace, Registrar or Deputy Registrar of the Supreme Court, Court of Appeal, a High Court or a District Court of New Zealand or a Member of Parliament.
Unlike a verified copy, someone else can take the document to get certified.
About the loan
From the time an Application for Conditional Eligibility Approval is submitted, how quickly will receive a determination?
Once an application has been lodged we’ll acknowledge we’ve got it. If all the supporting documentation and necessary information has been lodged with Kāinga Ora, we’ll work with the applicant to keep them updated on when the assessment is expected to be complete.
When does the loan have to be repaid?
The loans becomes repayable on the first to occur of:
- the date of sale or other disposal of the property (including following the death of the last owner-occupant);
- the date falling 12 months after the death of the last owner-occupant of the property;
- the date on which the last owner-occupant stops occupying the property as their primary place of residence (other than due to their death); or
- the date set out in any notice Kāinga Ora gives the borrower to repay the loan after a default occurs
- loans provided to former owner-occupiers will need to be repaid within two years of the property being removed from the EPB register, unless the owner has resumed living in the property
Expression of Interest form
If you meet the eligibility criteria, or have a query you can fill in the Expression of Interest (EOI) form below.
This is not a formal application, but if you have any questions and would like some advice before submitting an application, the EOI provides us with more information so we can better understand your situation and respond to questions you may have.
Page updated: 18 May 2022