Lending On Māori Land A Pathway To Prosperity Option 2 (1)

Buddle Findlay is delighted to have provided pro bono legal support to BNZ as it worked with Ngāti Whātua Ōrākei to develop an innovative financing framework for housing on iwi land.

Construction is now underway for 24 new whānau homes on Hawaiki Street in Tāmaki Makaurau Auckland.

As stated by BNZ, obtaining finance for housing on Māori land has been historically challenging.  The unique ownership structure and restrictions on land transferability often meant that it couldn’t be used as security for loans, creating a significant barrier for Māori home ownership.

However, the collaboration between BNZ and Ngāti Whātua Ōrākei has resulted in the development of a new framework enabling hapū members to secure a BNZ home loan for papakāinga housing at standard interest rates on iwi land.  The new framework employs standard leasehold mortgage lending practices, underpinned by a confidential Deed of Understanding.  This ensures that in the face of any challenges, such as a distressed mortgage, the land integrity and control is preserved by Ngāti Whātua Ōrākei who would take over the mortgage.  This approach balances the bank's security requirements with the enduring land rights of Ngāti Whātua Ōrākei.

In addition to collaborating with Ngāti Whātua Ōrākei on the funding model, BNZ also provided a $20 million social loan, certified by EY New Zealand, to support the construction of the homes.

Buddle Findlay banking and finance partner, Paul Farrugia, who led the team providing the pro bono legal support to the BNZ in developing this new funding model said "It was great to be involved in this collaboration between BNZ and Ngāti Whātua Ōrākei which has resulted in a mortgage lending framework providing greater accessibility to home ownership for Ngāti Whātua Ōrākei hapū members."