'Chuka Chumasi' expands homeownership

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BARTLESVILLE, Okla. - The first mortgage has closed here under a $10 million commitment to provide financing to members of the Cherokee Nation.

The Cherokees are the fourth Oklahoma tribe included in a multi-institution effort, which has committed $35 million to make mortgages to American Indians in Oklahoma. It has closed 60 loans.

Jim and Mary Cooper, who live here, mortgaged a $90,000, five-bedroom, three-bathroom home. The couple has three children, ages 5 to 12. Cooper is a self-employed truck driver.

Their loan, which has an interest rate of 7.875 percent, comes to 97 percent of the purchase price of the home. They also obtained a 1.9 percent second mortgage from the Housing Authority of the Cherokee Nation, and put up just $900 of their own money to close the deal.

Four separate financial institutions are cooperating on the Cherokee agreement, and similar ones with the Chickasaw, Choctaw, and Citizen Potawatomie nations of Oklahoma.

First, there is a mortgage broker, Native-owned First Americans Mortgage of Kansas City, which qualifies tribal members. Next, a nationwide lender, Washington Mutual Bank of Seattle, provides the financing. Third, because there is so little money put down on the house, the mortgage must be insured, by PMI Mortgage Insurance Co. of San Francisco. Finally, the mortgage is bought by Freddie Mac, a Virginia-based secondary mortgage market agency that facilitates lending by providing liquidity.

The program has been in operation for a year, and originated with the Chickasaw 'Chuka Chumasi' (Beautiful Home) effort. Sixty loans have been closed so far, according to Beth Castro of Washington Mutual. That would make at least $4 million in financing extended to the tribal members.

The consortium hopes to finance homes for 200 Cherokee families. It allows for both rehabilitation loans and new construction finance. The tribe is financing its second mortgages by selling off Department of Housing and Urban Development Mutual Help-funded homes.

The consortium has had success is Oklahoma because the trust land issues that concern other tribes do not apply, since reservations were abolished. It is difficult to mortgage trust land, so it is easier to close Indian loans on fee simple or private property land, which is much more common for Oklahoma tribes. Individual members still hold 'allotted' land, but there is no tribal trust land per se.

The Cherokee Nation, based in Tahlequah, Okla., is the second largest tribe in the country, with 210,000 members.