Working together for housing solutions First Nation Housing On Reserve Section 95 Housing Program Overview Pine Creek First Nation – October 13, 2015

Presentation Objective To provide an overview of the Section 95 Housing Program for the membership at Pine Creek First Nation

CANADA MORTGAGE AND HOUSING CORPORATION Section 95 Program  This Program assists First Nations in the construction, purchase or rehabilitation, as well as the administration of suitable, affordable rental housing on reserve.  CMHC provides a subsidy to the First Nation to assist with the financing (loan) and operation costs.  The subsidy is provided for the length of the loan amortization. ie 15 to 25 years.  The First Nation decides what type of housing they want to build given need, allocation from CMHC and any equity considerations.

CANADA MORTGAGE AND HOUSING CORPORATION Who is Eligible?  All First Nations are eligible to apply.  Aboriginal Affairs and Northern Development Canada (AANDC) must approve a First Nation’s request for a Ministerial Loan Guarantee (MLG).  Approval of the housing proposal is subject to various qualifying criteria with CMHC.  If a loan is approved by CMHC it can be for up to 100% of the of total eligible capital costs to construct the houses.

CANADA MORTGAGE AND HOUSING CORPORATION Subsidy calculation:  As mentioned CMHC provides a subsidy to the First Nation based on operating costs, principal & interest payments (P&I) along with a Minimum Revenue Contribution (MRC) to be collected from occupants:  Total Operating expenses + P&I – MRC = Subsidy.  If the revenue is not coming from occupancy fee collections, the revenue must come from another area of the First Nation’s operations or program area. ie Health, Education.  This may cause a shortfall of funds in these other areas.

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions – Rentals and Tenants What is a rental program? How are Occupancy Fees determined?  The First Nation collects occupancy fees from tenants living in Section 95 subsidized housing units.  Under the Pre ‘97 program, occupancy fees should be based on a rent geared-to-income (RGI) basis.  For Post ‘96 projects, First Nations are required to provide a Minimum Revenue Contribution for the housing projects.  These are requirements within the Section 95 Operating Agreement.

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions – Rentals and Tenants Occupancy Fees Collection Post ’96 Minimum Revenue Contributon (MRC) MRCShelter Allowance 5 bdr….$3876+people$387 4 bdr….$3715 people$371 3 bdr….$3444 people$351 2 bdr….$2943 people$310 1 bdr….$2442 people$285 1 person$243

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions – Rentals and Tenants Subsidy Calculation example - Post ’96 Program (new) Annual Loan Payment P&I 40,582 Annual Operating Costs+20,500 subtotal 61,082 Revenue Potential (MRC)- 22,260 Annual Subsidy$42,470

CANADA MORTGAGE AND HOUSING CORPORATION What happens once the houses are built?  An Operating Agreement is signed between CMHC and the First Nation.  Each party has various responsibilities as part of the Agreement.  The Agreement is in place for the length of the amortization of the loan.  The houses are owned and the responsibility of the First Nation.

CANADA MORTGAGE AND HOUSING CORPORATION Operating Agreement CMHC Responsibilities:  Provide monthly subsidy payments to offset the operating expenses.  Provide client service through monitoring the housing portfolio & operations.  Provide advice & recommendations.  Client visits are completed with Housing staff.  Offer training and workshop opportunities.

CANADA MORTGAGE AND HOUSING CORPORATION Operating Agreement First Nation responsibilities:  Ensure all Operating Agreements are implemented and adhered to.  Approve housing policies  Approve annual housing operating budgets  Approve/provide annual audited financial statements  Obtain annual fire insurance  Maintain books and records

CANADA MORTGAGE AND HOUSING CORPORATION Operating Agreement Responsibilities continued:  Review housing related matters and make recommendations to Chief and Council  Conduct periodic evaluations of housing operations  Hold regular meetings and ensure minutes are recorded  Develop, review and ensure Housing staff implement housing policies  Tenant selection as per BCR/Policy approved by Chief and Council  Create job descriptions for new and existing housing staff

CANADA MORTGAGE AND HOUSING CORPORATION Operating Agreement Housing Staff Responsibilities:  Conduct annual inspections of each unit  Use inspections and physical condition reports to develop a maintenance plan and capital plan each year  Maintain houses in good repair  Regulate leasing and occupancy fees collection  Prepare and monitor the annual operating budget  Educate tenants on housing policies and tenant responsibilities  Set up and maintain separate operating, replacement reserve and surplus bank accounts  Ensure monthly loan payments are made

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions - Organization What is a Housing Policy, who writes it and why is it important?  A housing policy sets out the instructions or rules for how decisions are made with regard to housing  It is developed by Chief and Council, members of a housing committee, outside consultants and/or the entire community  A written policy is important as it provides everyone within the First Nation a reference for:  how the housing portfolio works  how decisions are made  transparency - that decisions are fair and equitable  responsibilities of council/board/staff

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions - Organization Why does CMHC want to know if the housing policy is up to date and being followed?  A housing policy defines processes and criteria to keep the First Nation in compliance with CMHC program requirements.  Housing Policy is regularly updated the First Nation will be in a better position to ensure it can meet the changing needs of its membership.

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions - Organization What is Insurance and why confirm the coverage and deductible?  Insurance protects property against damage or loss.  If a loss occurs funds may be obtained from the insurance provider to help repair or replace affected unit.  Insurance coverage is a requirement of the Operating Agreement. CMHC wants to ensure the First Nation will have the resources to replace the damaged unit(s). CMHC must be loss payee on direct lending mortgages.  A deductible is the portion of any claim that is not covered by the insurance provider. It is the amount that must be paid out of pocket before an insurer will cover further expenses.

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions - Organization What is a Housing Budget and how is it prepared?  A housing budget is an estimate of revenues, expenses, and resources relating to a housing portfolio over a given period, typically a year.  A plan through which a First Nation balances its monies (occupancy fees and subsidies) and pays its bills (e.g. insurance, maintenance, loan payments, and administration expenses).  It is important for CMHC to understand how the housing budget has been created, who was involved, and what information and factors had an influence in creating the budget.

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions – Maintenance What is a Maintenance Plan?  A Maintenance Plan is an important tool in preparing budgets and ensuring routine housing repairs and renovations are undertaken.  The advantages and benefits of a maintenance plan include:  ensure houses don’t fall into disrepair  demonstrates a commitment to maintain social housing units over the project’s lifetime  maintenance and renovation work can be prioritized  keeps expenditures under control and ensuring replacement reserve funds are adequate  subjective decision-making and emergency corrective maintenance are minimized

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions - Organization How does a First Nation determine the amounts for maintenance and administration expenses?  Maintenance budget should be based on the First Nation’s maintenance plan. Expenses should be in line with the plan and budget.  The maintenance plan can be developed by using the annual inspections, PCRs, advice from staff/contractors, and past estimates and actual historical costs.  Administration budget should be based on prior year actual costs and the allowable amount per project.

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions - Finance Replacement Reserve Account  Interest bearing Restricted Savings account  Deposit annual or monthly payments to replacement reserve from operations based on the operating agreement  Withdraw funds for replacement of capital items (i.e.. roofs, appliances, furnaces, etc)

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions Capital Replacements  Replacement of Capital Items that reach the end of their life expectancy. Some examples are:  roofs  appliances  furnaces  HWT  Replacement, not repair of the item  Funded from the Replacement Reserve Fund

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions – Rentals and Tenants What is the Tenant Liaison process? Why is it important?  A means by which both the housing department and tenants can solve any issues or disagreements that may arise between them.  Could assist in issues such as:  maintenance and repair of the unit  occupancy fees collection  unit allocations  A housing department is in the BUSINESS of housing people. Issues and disagreements can arise – therefore, a process needs to be in place to deal with and resolve these.

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions – Maintenance What are Maintenance files?  provide information on the maintenance that has been done on individual units in the housing portfolio.  Information in maintenance files could include:  condition review reports  a list of completed repairs  a record of requests from tenants  location of the units  list of appliances including furnaces and hot water heaters (makes, models, serial #s and when acquired)  names of tenants

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions – Maintenance What are Maintenance files? cont.  date the housing unit was built  Annual move in/out inspections  Warranties for equipment (if any)

CANADA MORTGAGE AND HOUSING CORPORATION Administrative Functions Maintenance & Repairs  Types of Maintenance:  Routine – repairs that keep the building and property in good operating condition.  Preventative – repairs that preserve the expected useful life of capital items.  Extraordinary – repairs that extend the useful life of the capital item and are not considered a replacement reserve item.  Inspections  annual (Housing Authority)  move-in/move-out (Housing Authority)  Physical Condition Review, every 5 yrs (CMHC)

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