Tribes Outline Successful Mortgage Strategies

Mark Fogarty

A conference on challenges and opportunities for homeownership in Indian country heard case studies from five tribes or confederations of tribes that have actively sought mortgage financing for their members.

The Mortgage Lending in Indian Country conference sponsored by the Center for Indian Country Development in Scottsdale, Arizona heard success stories from Maine, Washington State, Montana, South Dakota and New Mexico.

The Four Directions Development Corp., Orono, Maine, serves the four Wabanaki tribes in Maine: the Penobscot, Passamaquoddy, Micmac, and Maliseet. It focuses on mortgage lending, home equity and home improvement opportunities for its tribal members.

It has extended 218 mortgages for a total of $11.5 million in home finance, and has agreements with the Penobscot and Passamaquoddy Nations that allow a transfer if the original borrower defaults to keeps the property in Native control. It plans to add similar agreements with the Micmac and Maliseet Nations.

The Four Directions program has been a pioneering one, attendees heard, with other entrants moving into the Maine Native mortgage market. It has also improved credit scores for tribal members to help them qualify for mortgages.

The Makah Nation in Washington state is in the midst of a 10-year buildout to provide 72 single-family ownership homes to residents in its Sail River subdivision. The homes feature, on average, $124,000 worth of pre-installed infrastructure.

Residents can qualify for up to $15,000 in down payment assistance on homes that range in cost from $89,000 to $225,000, with monthly payments averaging $700.

The Makah Tribe Housing Department amassed $9.1 million from 13 different funding sources to make the project possible, according to its case study. It also made a point of getting input from high school juniors and seniors who will be in their home buying years as the project moves along.

The tribe hopes to increase housing stock on its reservation 25 percent by 2022.

The Salish & Kootenai Housing Authority detailed its success in establishing a true buy and sell real estate market on its Montana reservation, resulting in 1,100 mortgaged homeownership units.

It has used its Tribal Credit and Flathead Finance programs to assist members in getting mortgages, including from lenders using the HUD 184 guaranteed Indian mortgage.

The Sisseton Wahpeton Housing Authority in South Dakota pointed to 49 new homeowners on the reservation since it began its T Yamni program. This year, six of ten loans in the pipeline were closed.

The SWHA provides infrastructure and lots that are construction ready to aid tribal homeowners.

At the Zuni pueblo in New Mexico, the Zuni Housing Authority has facilitated a self-help program where tribal members help each other to build homes through sweat equity. The new owners get mortgages through the Rural Housing Service section 502 mortgage.

ZHA also plans to build a new community on a 159 acre site which will include mortgage and lease-purchase units. Currently there are 54 units finished with another 20-25 in the planning stage, the conference heard.

The Center for Indian Country Development is affiliated with the Minneapolis branch of the Federal Reserve Bank.

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