Housing loan limit increased

More community members will soon be able to access funds to help them build and buy housing in Kahnawake, thanks to an increase in the On-Reserve Loan Guarantee limit from $175,000 to $400,000.

“The overall big picture is building a stronger family unit, and I’m happy that we were able to knock this out,” said Mohawk Council of Kahnawake (MCK) chief Ryan Montour. “We had a lot of pressure from community members, repeated requests to raise it, and this is a major unifying factor in Kahnawake, our housing.”

On-Reserve Housing loans are offered by Caisse Populaire Kahnawake, which has worked in collaboration with the MCK since 2008 to approve Kahnawa’kehró:non for housing loans. The increase in the limit has come about as part of an interim agreement for On-Reserve Housing Loans, which will remain in effect until June of next year. Currently, the agreement requires a five percent down payment when borrowing.

“There are higher costs now to build a home, you can’t really buy much with $175,000,” said Mandie Montour, general manager at the Caisse Populaire. “We have seen a demand for a higher increase in borrowing amounts since COVID, because the cost of construction and materials has gone up, and that’s a fact everywhere.”

The increase in the guarantee limit does not mean everyone will be approved for a $400,000 loan - borrowers will still have to meet with financial advisors at the Caisse to establish how much they can afford, which will be assessed on an individual basis with necessary documentation.

“Before anybody starts construction they have to meet with an advisor, they have to get prequalified for a loan amount based on their income and based on several factors, but this is the maximum amount that could be borrowed,” Mandie said.

Ryan said the agreement was made interim because of the process of going through legal contracts and documents is lengthy.

“It’s really a complex agreement, so in the interim we wanted to appease community members’ demands to raise the limit,” he said. “Right now, it can be renewed next year, and people have the opportunity now to go collect enough capital to build their homes.”

He said that part of the negotiations included establishing the duration of the agreement, a detail that is still being ironed out while the current interim agreement runs its course.

“MCK is taking a lot of risk being the guarantor with a long-term agreement, so we thought it was fair, the Caisse thought it was fair, and to me what it means is that we’re able to service community members who are ready to build their forever home,” he said.

MCK executive operations officer Alan John Rice said the increase in the cap will make homeowning more accessible to community members.

“Unfortunately, the cost of housing has skyrocketed in the last couple of years, but this should make it so people can at least have access to the types of funds that are actually needed to build a home,” Rice said.

He said it’s necessary that adjustments like this are made to cope with unexpected economic circumstances, like the effect of the pandemic on building and buying.

“The costs increased since COVID and they never came back down. Everyone was hoping that it would come back down, but it didn’t, and the cost of inflation and living is up, so the people building the houses also have to make their living too,” he said. “We’re similar in what it costs to build anywhere else, so it’s unfortunate that it’s this high, but that’s unfortunately the state of the world right now.”

Ryan said that there are at least 17 clients in the community ready to build, for whom the increased cap will make a major difference.

“For me, the people that have been anxiously waiting, basically being pre-approved and having to wait for the implementation of this agreement, are seeing a major step forward to alleviate the housing shortage in Kahnawake,” he said. “It’s great that we got this done.”

He added that he’d hoped the agreement would have been completed in time for building season, but said it’s still progress to get it out now.

“I know it’s not fast enough. We pushed as hard as we could, but big contracts and big agreements like this take time if you want to get it done right,” he said.

Should a long-term agreement not be established before the interim agreement expires, the current agreement can be extended, Ryan added.

“We always get stuck into 99-year leases that were done in the 1950s and 1960s, but if we see changes that are needed, we want to be looking at more like 10 to 20-year agreements,” he said. “If it’s running good and it’s running well, it shouldn’t be a problem knocking it out this year.”

He said he’s happy with the progress that MCK is making with regards to housing, particularly with the ongoing construction of new rental units in the community.

“The pressure is off a bit now. We’ve got this interim solution, the Caisse Populaire is happy, we’re happy, and ultimately, we’re both servicing the clients of Kahnawake,” he said. “It’s a win-win for everybody.”

[email protected]