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Housing Boom in the New Mexico Desert Thanks to Private Lenders

Financing unimaginable two decades ago is generating a large ripping sound on the desert plateaus of New Mexico. The noise is the welcome sound of barriers to homeownership being torn down for tribes in the state.

Private lenders are putting up large sums of money on Indian housing in New Mexico, with projects going on for at least five of the state’s 22 tribes. The financing, mostly federally guaranteed, is insured by the Department of Housing and Urban Development and the U.S. Department of Agriculture’s Rural Development unit, but even so, is being done by private lenders. Twenty years ago, many private lenders wouldn’t have come onto a reservation to win a bet.

At the San Felipe Pueblo north of Albuquerque, the tribe and its housing authority have gone full throttle. San Felipe, which had not seen any housing development in 40 years, last year completed 28 single-family homes and is now putting the finishing touches on a dozen more. It has secured a second HUD “Title VI” project loan from Bank of America and Indian Community Development Block Grant money which means Phase II, another 28 homes on top of the 40, will come into being at the Black Mesa View subdivision.

Mark Fogarty

At Nambe pueblo, north of Santa Fe, more than $10 million has been raised for a 61-unit housing development called the Buffalo Range subdivision.

San Felipe Pueblo Housing Authority executive director Isaac Perez isn’t stopping there, either. His goal is 150 units of new housing, 132 single-family homes and 18 multifamily, plus a commercial area. Total cost for all this?

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Somewhere around $17 or $18 million. At least a third of that has been raised. Bank of America made a $2.8 million “project” loan through HUD Title VI (95 percent guaranteed by the federal government), which is intended to provide construction and infrastructure costs for housing in areas that may lack both. The 12 units being built now are being funded by HUD’s Rural Innovation initiative. Phase II financing from Bank of America (a second Title VI loan) will build another 21 homes and money from HUD’s Indian Community Development Block Grant will finance another seven. Seventy jobs have been created as modular units are built right on the reservation, including many jobs for tribal members.

Add into the mix mortgage finance for the individual families, through HUD’s Section 184, 100-percent-guaranteed Indian mortgage, and you can see the beginnings of the kind of housing markets taken for granted in the dominant culture.

The housing authority is the borrower on the HUD 184s, which have been extended on all 40 units built to date. The housing authority then resells the loans to the individual borrowers, who are being assisted by the New Mexico Mortgage Finance Agency for downpayments.

The San Felipe Title VI loan for the first 28 units was the first of its kind in New Mexico in ten years. But these big project loans are becoming more common, with three more being extended for projects on San Felipe (Phase II), San Idlefonso pueblo, and the Jicarilla Apache reservation.

According to Eric Schmieder, Indian loan specialist for NMMFA, 10 housing units are going up at San Idlefonso pueblo, north of Santa Fe, and these are being supported by a HUD Title VI loan. At the Jicarilla Apache reservation adjacent to the Colorado border, ten or 12 units are set, also using Title VI. And at Zuni pueblo in the west of New Mexico, four or five “sweat equity” homes are going up using the Rural Development RHS section 502 direct mortgage.

At Nambe pueblo, north of Santa Fe, more than $10 million has been raised for a 61-unit housing development which will have 37 single-family homes, all with HUD 184 mortgages (to date four have been built and sold) and 24 multi-family units. This housing project, called the Buffalo Range subdivision (a herd of bison is just adjacent) has a ten-year timeline, according to project manager Andrew Martinez and Nambe Pueblo Housing Entity executive director Christine Brock, and has received three separate grants from the state’s TIFF program (Tribal Infrastructure Fund) plus money from the federal stimulus program.

At Nambe, mortgages are being planned for tribal borrowers from such dominant culture lenders as Wells Fargo, Bank of Albuquerque, and Gateway Mortgage. A New Mexico Native lender, Native Community Finance, is involved in construction lending and NMMFA is supporting both NCF and the individual mortgages with downpayment assistance. Three fulltime jobs have been created, with as many as eight workers at peak times.