Home loan program exceeds $100M

DENVER ? A federal mortgage guarantee program for American Indians has passed its 1,000th loan and the $100-million mark in financing.

The Department of Housing and Urban Development's Section 184 program, run out of HUD's Office of Native American Programs here, has guaranteed mortgages to 800 individual Indians and 200 tribes or Indian housing authorities, through a network of 198 different lenders in 31 states, since inception in 1995.

Loan sizes have ranged from $12,500 to $317,400, according to ONAP, and interest rates have averaged 6.82 percent in fiscal 2002, comparable to those in the private sector. Average loan amount is $96,688.

Guarantees have been extended on reservation trust land and on fee simple (private property) in non-reservation "Indian areas" in Oklahoma and Alaska. Loans can finance new or existing homes, construction and rehabs.

Although Paul S. Jurkowski, director of ONAP's Office of Loan Guarantee, had not responded to an inquiry on the breakdown of loans between trust and fee land by presstime, a recent report by the Congressional General Accounting Office gave a HUD 184 tally of 354 loans on trust land out of a 948 total when it made its inquiry.

HUD 184s were a key part of the recent complicated financing of several hundred homes on the Fort Apache reservation in Arizona, which included a $25 million mortgage revenue bond.

OLG has also conducted trainings around Indian country on the HUD 184, and they have been attended by more than 600 people.

The other guarantee program run by ONAP, called Title VI after the corresponding section of the Native American Housing Assistance and Self Determination Act, has guaranteed about $65 million in financing for Indian housing and infrastructure.

The biggest Title VI loan, for $50 million, has recently been closed to construct housing for the Cherokee Nation of Oklahoma. HUD guarantees 95 percent of any lender's outlay under the Title VI program.

Last year, the biggest HUD 184 lender in the country was Wells Fargo Mortgage of Des Moines, Iowa, which extended $6.3 million through 56 loans.

This year, Wells may face a run for its money as national leader. A community bank called McClain County National Bank of Purcell, Okla., has taken the lead in HUD 184 lending in that state and has already outstripped Wells' whole 2001 volume.

As of July 1, McClain County had made 95 loans to Indian borrowers this year, for $7 million in financing, and it expected to pass 100 loans by the end of the summer.

McClain County started making the HUD 184 loan in 1997.

In other federal Indian housing news, the Federal Home Loan Bank of Des Moines has awarded $250,000 to ten financial institutions to spur Indian homeownership.

The FHLB by law must designate 10 percent of its earnings to affordable housing, and as part of its Affordable Housing Program it has declared it will set aside $250,000 annually to support Native homeownership.

The money goes to individual financial institutions that are members of the district bank, who then parcel it out to low-income individuals on reservations within the FHLB's district. The Indian families will receive grants of between $500 and $5,000 apiece.

Seven banks and a thrift in Minnesota and two banks in the Dakotas have received Native American Homeownership Initiative funding for 2002 from the Des Moines FHLB. Subsidy amounts to them are from $5,000 to $25,000.

The banks include Wells Fargo Bank of South Dakota, First Dakota National Bank, also South Dakota, and the Native-owned Woodlands National Bank of Onamia, Minn.

In total, FHLB-Des Moines has funded $6.5 million to assist in the financing or construction of 1,183 housing units for Native Americans.