Housing New Zealand could enter into joint ventures with Maori who can't pay their mortgages, says Maori Party co-leader Tariana Turia.
Under the Kainga Whenua scheme announced on Wednesday, Kiwibank will provide no deposit loans of up to $350,000 for Maori to build homes on multiple-owned land. Housing New Zealand will guarantee repayments.
"Many of our people who built rurally, their loans fell over and the houses were often abandoned," Mrs Turia told Waatea News.
She says Housing New Zealand would have the opportunity to go into a joint relationship with the owners of the land to take over the mortgage payments.
Mrs Turia says she can understand other banks' reluctance to get into such lending.
Home repairs 'a priority'
The head of northern iwi Te Runanga o Te Rarawa says the Government should be repairing old homes as a priority.
The Essential Repairs programme which helped make homes habitable and healthy.
Haami Piripi, who heads Te Runanga o Te Rarawa, says at the same time as announcing the loans guarantee scheme the government has cut the Essential Repairs programme which helped make homes habitable and healthy.
Mr Piripi says people cannot afford new homes, while most repairs and upgrades can be done for under $15,000, a loan that iwi members could manage to repay.
He says they still have 500 people on a waiting list.