Traditional banks require land as collateral for mortgages, but Māori freehold land cannot be sold or seized, making it ineligible for standard lending. This has long been a barrier to homeownership for Māori families.
Hikurangi Enterprises, a community-led social enterprise in Te Tairāwhiti (the Gisborne district), builds affordable, transportable homes. Kaenga Hou, a trust focused on innovative financing, enables families to access these homes through a rent-to-buy programme that gradually transfers ownership while reducing financial risk.
Instead of relying on bank loans, funds come from ethical investors, also called impact investors, such as Community Finance. These investors accept lower returns in exchange for social benefits like increasing Māori homeownership and protecting ancestral land. Community Finance combines private capital with government funding to make the programme viable.
Families enter the rent-to-buy programme by making rental payments to Kaenga Hou. These payments are divided into three parts: one portion covers interest payments to investors, another builds savings toward a home deposit, and the remainder goes into an “aroha fund”, a collective safety net designed to support families facing financial hardship and reduce the risk of default.
As families accumulate savings, they eventually reach a financial threshold that allows them to secure a conventional loan or use their savings to buy the home outright (similar to a leasehold arrangement). This approach allows Māori families to achieve homeownership without requiring land as collateral.
Centrist Ltd.