ST. MICHAELS, Ariz. - Many well-intentioned American Indian mortgage programs have floundered because of the lack of existing housing stock on many reservations.
Now a program specifically is trying to encourage the development of a real estate market on the nation's largest homeland.
PMI Mortgage Insurance Co., San Francisco, in partnership with the Navajo Partnership for Housing, based here, has established a $250,000 revolving loan fund to buy and rehabilitate homes to resell them to members of the Navajo Nation.
The partnership acquired the first two homes through the program, one in Window Rock, Ariz., the Navajo capital, and the other in Shiprock, N.M.
"Right now on the Navajo Nation, most Navajo families do not envision the buying and selling of homes as it occurs off-reservation. I believe one way Navajo families can build personal wealth is through an active 'buy and sell' real estate market on the Navajo Nation. These funds given to us by PMI will certainly help NPH begin to build that new market on the Navajo Nation," said Richard F. Kontz, executive director of NPH.
Kontz, Navajo and Creek, earned a Realtor designation in hopes of furthering a real estate market on the 25,000-square mile reservation in Utah, New Mexico and Arizona.
The "revolving" loan fund uses payments from the first set of borrowers on their loans to replenish the fund, providing money to be loaned out again and again.
PMI recently announced a joint program with Wells Fargo Home Mortgage to facilitate the establishment of home mortgage programs on the nation's reservations.
It is not a lender, but a mortgage insurance firm. Mortgage insurance is required if a borrower puts up less than 20 percent of the price of a home as a down payment.
PMI also is contributing to the latest in the growing list of homeownership programs on tribal trust lands.
Under the program, Zions First National Bank of Salt Lake City will extend mortgages to Ute tribal members on their Utah homelands on the Unitah and Ouray Reservation.
PMI will provide mortgage insurance on the loans, (the tribe subsidizes the payments) and giant mortgage agency Fannie Mae will buy the loans from Zions.
Zions will offer mortgages with down payments of as little as 1 percent cash, with an additional 2 percent supplied through the Ute Indian Tribally Designated Housing Entity or by a gift or other grant from a non-profit.
Ute tribal members can finance new or existing home purchases with no income limitations, making higher-income Indians eligible.
The Unitah Basin Association of Governments, through Utah State University, will provide home buyer education and homeowner mentoring for two years.