Nation and Band housing

Region: Ontario Answer # 0653

The following information has been provided with the assistance of Lakehead University Faculty of Law, Aboriginal Law Studies.


Under the Indian Act, certain tracts of land are set aside by the Government for the use and benefit of a band. These are referred to as “reserve” lands. Possession of the lands is held collectively by the band. Ownership in the land, however, remains with the government.


Under s. 20 of the Indian Act, band councils are permitted to allot possession of lands to individual band members, provided that the Minister’s approval is obtained. In such cases, the band member’s rights in the land are registered with the Indian Lands Registry of Indigenous Services Canada. Upon registration, a Certificate of Possession is issued and provided to the band member as evidence of the land rights.

Other First Nations do not allot land using the Indian Act or any similar legislation (such as the First Nations Land Management Act). Instead, they use their own systems, known as custom allotments.


On-reserve housing situations vary from community to community. Some communities have their own source of revenue and high employment that results in good quality housing. However, there is a prevalent issue in the communities that do not have the benefit of own-source revenue or high employment. There is a shortage of proper housing on reserves. Consequently, these restrictions often prevent the development of housing programs.

A unique feature in land and housing ownership on a reserve is that title to the land is distinct from title to buildings. Whereas title on reserve lands can only be held by the Government, ownership in housing can be band owned or individually-owned. Although renting from a First Nation or one of its members may be permitted, landlord and tenant rights and obligations with regard to tenancies on reserves is not as clear as off reserve tenancies which are governed by provincial and territorial landlord and tenant legislation.

There is a shortage of proper housing on reserves. Barriers related to land and housing ownership arise from factors such as the:

  • the unique land tenure regime on-reserve,
  • the remote location of many on-reserve communities, and
  • limited access to private financing in the form of mortgages or housing loans.

Since the land on-reserve is held in common and is legislated under the Indian Act — which states that reserve lands are not subject to seizure under legal process — access to standard mortgages available to every other Canadian are not an option.

What is market-based housing?

Market-based housing is recognized as a necessary part of any long-term effective approach to meeting the current and future housing needs of Indigenous people in Canada. Market-based housing means the owners and occupants pay for the cost of their housing either through rental or loan payments. It includes private home ownership, rentals, and rent-to-own housing.

Market-based housing gives First Nations the ability to invest in their own communities.

The On-Reserve Housing Policy

The Government of Canada’s On-Reserve Housing Policy allows First Nations to significantly participate in how, where and when housing funds are invested. The main principles of the Policy are:

  • First Nations control;
  • First Nations expertise;
  • shared responsibilities; and
  • increased access to private sector financing

Through the Policy, annual funding allocations are distributed at the beginning of the fiscal year on April 1st. 

British Columbia:  The On-Reserve Housing Policy applies to First Nations in all provinces and territories except British Columbia. In British Columbia, support for better quality housing is provided through the Housing Subsidy Program and the New Approach for Housing Support.

First Nations Market Housing Fund

On April 20, 2007, Canada’s Government announced the First Nations Market Housing Fund (Fund). The Fund is a registered not-for-profit trust.

One of the main impediments to market-based housing is a lack of access to financing for housing on-reserve because of the Indian Act provisions which limit seizure of property on-reserve to a First Nations community or its members. As a result, mortgage security is not available. Consequently, this Fund was developed to facilitate and broaden the range of housing options for residents of First Nations communities so that they may have the same housing choices and opportunities as people in non-First Nation Communities.

The Fund helps First Nations communities by:

  • Providing a 10% backstop for housing loans guaranteed by the First Nation;
  • Providing financial leverage to negotiate with lenders for the best possible loan terms and conditions;
  • Strengthening First Nations communities and supporting increased self-sufficiency by providing financial literacy and financial management tools, enhancing the governance framework, and developing capacity with education, information, and innovative services.

(i) Credit Enhancement Facility – Providing alternative ‘security’

The Fund provides an alternative form of security for housing loans made on-reserve and settlement lands where appropriate, through its Credit Enhancement Facility. The backing provided by the Fund, in addition to First Nation guarantees, attracts lenders by offsetting some security issues while preserving the communal nature of the land. This enables First Nations to achieve favourable financing terms and conditions: interest rate discounts; loan features; risk sharing agreements; reduced loan program access fees; and favourable administrative arrangements.

(ii) Capacity Development Program

The Fund’s Capacity Development Program focuses on developing and/or expanding market based housing capacity through the provision of training and advice as well as codes, policies, by-laws, laws and systems and practice at the Leadership, administrative and membership level. Focusing on housing, lands and finance, examples include:

  • Housing Policy;
  • Housing Committee Terms of Reference;
  • Housing Inventory Management;
  • Arrears Management;
  • Governance Workshops;
  • Law and Policy Development;
  • Financial Laws and Policies; and
  • Land Management Systems

This will help individuals on-reserve and on settlement lands where appropriate, to obtain loans, where their First Nation meets certain criteria, such as a demonstrated ability to manage their finances, loans and housing.

“Once the First Nation has made the arrangement with the lender or lenders, members of that First Nation will be able to apply for a housing loan, in a similar way households do off-reserve, with similar lending terms and conditions. Lenders will review the value of the house, the borrower’s income and the borrower’s ability to repay a loan when their other expenses are considered. Assuming the borrower meets the lender’s criteria, he or she would be approved for a loan.”

The Canada Mortgage and Housing Corporation (CMHC) manages the day-to-day activities of the Fund, under the oversight of the Trustees.

(iii) Success of the fund

“Since the Fund opened its doors 10 years ago, we’ve seen a growing recognition about the value and possibilities of home ownership across First Nations. Individuals now know they no longer have to go it alone- they are creating wealth and building the homes of their choice with the help of a bank mortgage backed by the Fund,” stated John Beaucage, Chair of the Fund.

The latest figures from Statistics Canada, in 2011, show that 31 percent of on-reserve units were privately owned compared with approximately 69 percent of non-indigenous Canadians. The Fund has approved potential credit of $950 million for some 6,600 home loans to date, representing a significant investment in First Nations communities across Canada.

For more information, visit the Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) website. For further resources, check our Aboriginal Law links.


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