BNZ has announced an expansion of a funding framework that provides a path to homeownership on Māori freehold land.
The expanded model means individuals and whānau who meet BNZ’s standard home lending criteria will be able to secure a home loan for housing on Māori land managed by land trusts or incorporations at standard home loan interest rates.
This is an extension of the funding model developed in collaboration with Ngāti Whātua ki Ōrakei, which enabled lending for housing on iwi land.
BNZ Māori business head Whetu Rangi says the initiative is a step forward in addressing the challenges Māori face when seeking finance to build homes on their whenua.
“It’s about more than just providing loans; it’s about empowering our people to create sustainable, thriving communities on their whenua,” Rangi said.
Māori freehold land is different from iwi-owned land, which is usually held by an iwi post settlement as a result of Treaty settlements.
Challenges for lending
Māori land trusts and incorporations are crucial for the management of Māori freehold land, which covers approximately 1.4 million hectares, about 5% of Aotearoa’s land area. Trusts and incorporations manage the land on behalf of multiple owners.
Owners generally are connected through whakapapa and there can be hundreds and thousands for a single land block.
The collective ownership structure of Māori land has historically posed challenges for lending and this, combined with restrictions on land transferability, including those in Te Ture Whenua Māori Act 1993, created barriers to using Māori land as security for loans.
Due to these challenges, Māori have faced significant obstacles in obtaining individual home loans on collectively owned land.
The BNZ framework uses leasehold mortgage lending practices that align with Māori land ownership legislation and enshrines agreements which ensure property is controlled by the Māori land trust, incorporations and owners, which would take over in the event of a distressed mortgage.
Balanced approach
This approach balances the bank’s security requirements with the land rights of shareholders and beneficiaries of Māori land.
BNZ chief executive Dan Huggins says extending the framework is about supporting Māori aspirations.
“Developing this framework has taken several years, requiring a significant amount of legal work, and a full understanding of the unique aspects of Māori land ownership. This model respects the c
ollective ownership structures of Māori land and ensures the land remains a taonga tuku iho — a treasure passed down through generations,” Huggins says.
“We’re proud that we’ve managed to develop a solution that not only can facilitate home ownership on whenua Māori but also acknowledges and protects the deep connection Māori have with their whenua. We hope this approach is the first of many innovative solutions enabling Māori home ownership.”