New Mexico Surpasses $100 Million in HUD Indian Mortgages

Mark Fogarty

New Mexico this fiscal year has passed the $100 million mark in mortgages to American Indian residents of the state through the HUD 184 loan program.

Data revealed at a breakfast held in conjunction with the New Mexico Mortgage Finance Authority’s recent Housing Summit in Albuquerque show private lenders have made $110 million in government-guaranteed mortgages to New Mexico Indians both on- and off-reservation through 695 loans since program startup.

About a third of the lending has come on the state's nearly two dozen Indian reservations, according to a briefing sponsored by the Federal Deposit Insurance Corp., the Federal Reserve Bank of Kansas City, and the Office of the Comptroller of the Currency.

For this fiscal year, through the end of July, lenders have extended 121 mortgages for $20 million through the HUD 184. Just 14 have been on allotted or tribal land.

Deanna Lucero, senior loan guarantee specialist for the Department of Housing and Urban Development, said the HUD 184 is “now the leading loan program in Indian country” after a slow start that saw only 17 loans closed in its first year back in the 1990s.

Three hundred lenders have signed on to be in the program, she said, and her office gets new requests every day. The program has had good credit performance, with about 8.5 percent of loans in delinquency or foreclosure. Nationwide the program has closed more than $3 billion in mortgages.

Marvin Ginn, executive director of Native Community Finance, a Laguna, New Mexico Pueblo community development financial institution, remembered that his first HUD 184 took three years to close. He now provides construction finance on 184s and says each deal takes four months maximum to get completed.

Betty Shaw, senior vice president at Bank2, Oklahoma City, said her bank can be a “correspondent” lender for 184s, meaning it can fund loans originated by lenders in New Mexico (and elsewhere).

Elvira Duran, a mortgage banker at Bank of Albuquerque, is a HUD 184 specialist who says she has done hundreds of the loans. Other major HUD 184 lenders in the state include Wells Fargo New Mexico, Bank 2, and 1st Tribal, based in California.

The New Mexico Housing Summit had an unusually robust track on American Indian housing this time, featuring tribal leaders, state and federal agency heads, and private mortgage lenders gathering to explain the latest in public and private programs that can benefit tribes. The Native track was organized by Eric Schmieder, tribal housing program manager for the New Mexico Mortgage Finance Authority, which sponsors the biennial event.

A session on U.S. Department of Agriculture mortgages was set to focus on the USDA's Rural Housing Service loans, targeted to the rural areas that include most reservations. RHS offers both the section 502 direct-to-borrower mortgage and the section 504, a loan guaranteed by the federal government.

Another panel was to focus on housing success stories among New Mexico's tribes and pueblos. Tribes have been successful in recent years in packaging loans such as the HUD 184 guaranteed mortgage and the Title VI project loan with their own and other sources of money to make desperately-needed housing rise on their homelands.

Obtaining titles for Indian land through the Bureau of Indian Affairs has always been a challenge, and another panel was set to talk about the progress that has been made in recent years.

Manufactured housing, a staple of reservation life, was to be discussed in another panel, with a focus on how Indian owners can refinance their hugely expensive "chattel" loans into lower-costing "conventional" home mortgages. Ownership of land, always a controversial topic in Indian country, comes into play. The writer of this article was the moderator of this panel.

The Indian housing track also scheduled a session on the latest changes to the HUD 184 program. Schmieder also was to host a class on the HUD 184 program for Realtors and Brokers to get up to speed on this essentially risk-free loan on tribal lands (and non-tribal land) that is 100 percent guaranteed by the federal government. Key takeaways were to be how to partner with Tribally Designated Housing Entities (TDHEs) on reservations and how to reach out to off-reservation Indians, who are also eligible throughout the state. Continuing education credits were awarded to attendees.

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