Thirty-eight thousand American Indian families.
That's how many people are ready for mortgage finance in Indian country, reports a recent analysis of the situation quoted at this year's Department of Housing and Urban Development Native American Housing Summit.
Until very recently, as readers of this newspaper know all too well, Indian country has been redlined for lending by nearly all financial institutions. That's starting to change, but the pace of change is slow.
Those 38,000 families are the number of people estimated to be ready and able to afford financing on the country's tribal lands, an area that put together is about the size of Montana and is home to about 1 million people.
They are the people who work for tribes or the U.S. government or in natural resources or gaming, bringing home a steady paycheck but not able to finance a home on the res because the banks won't lend there.
At $80,000 a loan, that's about $3 billion in mortgage volume that could be added to lenders' balance sheets. At a minimum it's $1.4 billion, reports Patrick Borunda, who heads First Nations-Oweesta, based in Washington state.
Borunda has quoted a HUD report which shows a minimum of 10,700 households to a high of 30,600 ready for ownership on Indian lands. In addition, if financing and jobs were available on reservations, the estimate is another 2,675 to 7,650 households would move back and become homeowners.
Added up that's 38,250 potential mortgages, using the high end of the estimates.
Granted, it's tough lending. Sovereignty and trust land status are difficult concepts for many lenders. Many tribal areas lack the basics the mortgage industry would take for granted: Realtors, appraisers, title insurers, local lenders. But the evidence at the HUD summit this year in Portland, Ore., is that mortgage lending in Indian areas slowly is gaining ground.
I heard of 30 mortgages done on the Chickasaw Nation of Oklahoma, eight in Washington state, 40 mortgages on Navajo Nation trust land, 22 extended to tribal members served by the Northern Circle Housing Authority in California. And there are more.
Lenders that have been active include some of the largest institutions in the country, like Bank of America, Wells Fargo Home Mortgage, Bank One and some of the tribally-owned banks around the country.
Last year at the summit, HUD was about to pass the 500 mark on its Section 184 guaranteed-mortgage lending program. That number has grown to 700 this year, for $68.8 million in financing, and the number of HUD 184s on tribal trust land is growing.
A couple of dozen hands went up when asked if there were any lenders present - an encouraging sign that there is interest and commitment to seeing this vast tract of territory incorporated into the financial grid of the rest of the country.
Expectations need to be in line with what can reasonably be accomplished. Last year, President Clinton made a highly-publicized visit to the Pine Ridge Reservation of the Oglala Sioux Tribe in South Dakota. HUD, under the enthusiastic leadership of Secretary Andrew Cuomo, promised "to build about 300 new homes and rehabilitate dozens by the end of 2000."
So far, 19 have been built and financed. Sixteen more are planned for this summer, with another 10 or 15 promised by the end of the year. Cuomo has taken a lot of heat for the shortfall, and he's guilty of unreasonable expectations. But the fact that 19 homes have been built and financed at Pine Ridge over the last year is a very decent start.
Patience is a big virtue in Indian housing finance. I was happy to learn that last June, the first three "conventional" loans closed on the Navajo Nation, a reservation the size of West Virginia. Conventional mortgages are those without government support, like the majority of mortgages in the dominant culture.
That was a full three years after the tribe and Fannie Mae signed an agreement to allow conventional mortgages on the largest tribal homeland in the country. And that signing followed two tough years of negotiation. So those first three loans were five years in the making. Another 38,000 could follow, all across the country.