The Mana party is promising to give Maori no deposit, low interest home loans funded from the Government's coffers.

Mana's Ikaroa-Rawhiti candidate Te Hamua Nikora and leader Hone Harawira made the announcement in policy announced in Pomare this morning.

They said Maori were being driven out of the market by property developers and foreign owners who were driving up prices.

Maori families were left renting substandard accommodation, they said.

"[Our] loan scheme will encourage Maori to become homeowners and not just renters of dumps owned by property developers," Nikora said.

The scheme was similar to the Maori Affairs Housing Scheme that was canned in 1989.

Only Maori first-home buyers would be eligible, he said.

It would be run through Te Puni Korkiri to "cut out banks and their mean-spirited attitude to Maori".

No deposit would be needed and low interest rates would be charged.

Up to $200,000 could be borrowed to buy a house or build, he said.

Mana is looking to reintroduce Maori apprenticeships to help with the building.

The scheme had not been costed, and Harawira said he had not spoken to other parties about getting support.

"The issue isn't about cost; it's about priorities."

The Government was willing to give money and assistance to rich people who did not need it, he said.

He said it could build quality houses for $200,000.

"Not something big and flash, but something comfortable ... That's the thing about Maori; we do have land," he said.

Mana also pledged to build 10,000 state houses a year, starting with 500 in Ikaroa-Rawhiti, the electorate where a by-election will take place next week.

Harawira said it was "not just unethical, it's immoral" that people were being kicked out of state houses, including in the Pomare area of Lower Hutt where the announcement was made.

He said he would not get arrested again in Pomare. "One arrest in each electoral term is enough."

Harawira was arrested while protesting about state house redevelopment in Glenn Innes, Auckland.

He intends to represent himself in court next month and said his trail was a political statement about the housing situation in New Zealand.