Pilot program increases rates of mortgage lending on South Dakota’s reservations
South Dakota Native Homeownership Coalition
During her address at the National American Indian Housing Council’s Legal Symposium, Tawney Brunsch, Executive Committee Member of the South Dakota Native Homeownership Coalition, reported that through a partnership with United States Department of Agriculture Rural Development, two Native community development financial institutions (CDFIs) deployed eight home loans totaling nearly $1 million in two reservation communities during the past couple of months – more than was deployed in the previous nine years prior to the start of the program.
The United States Department of Agriculture Rural Development officially launched the 502 Direct Native Native Community Development Financial Institutions Relending Pilot Program last summer as a way to increase homeownership opportunities on tribal lands, and approval of funds for deployment began in October this year.
“The 502 Relending Pilot has been a huge success! The United States Department of Agriculture, the South Dakota Native Homeownership Coalition, and the Native Community Development Financial Institutions have worked together to efficiently expand access to affordable mortgage capital to Native borrowers on trust land,” said Brunsch.
In just two months, the two Native Native Community Development Financial Institutions participating in the pilot, Four Bands Community Fund on the Cheyenne River Reservation and Mazaska Owecaso Otipi Financial on the Pine Ridge Reservation, have deployed approximately 50% of the $2 million in loan capital that was allocated to the pilot program and are currently working with 24 more families who are applying for the United States Department of Agriculture 502 Direct Loan.
“This deployment rate shows that Native Native Community Development Financial Institutions are able to leverage their strong relationships within the communities they serve and their expertise in mortgage lending processes on tribal trust lands to accelerate homeownership rates on Indian reservations,” explains Brunsch.
The South Dakota Native Homeownership Coalition began advocating for the pilot program in 2015 and worked closely with U.S. Senator John Thune (R-SD), U.S. Senator Mike Rounds (R-SD), and U.S. Senator John Hoeven (R-ND). In March 2018, the South Dakota congressional delegation requested that United States Department of Agriculture implement the pilot and recognized that while the 502 Direct Loan program was highly utilized, only 23 of the 7,187 loans made through the program in fiscal year 2017 went to Native American families on tribal lands.
Brunsch says the South Dakota Native Homeownership Coalition’s next step will be continued advocacy with the intention of making the pilot permanent so that it can be expanded to other Native communities throughout the country.
“We appreciate the leadership of our Senators who made this pilot possible and are excited to partner with the National American Indian Housing Council, National Congress of American Indians, and the Native Native Community Development Financial Institutions Network to support the replication of this successful model in all Native communities,” Brunsch said.
About the South Dakota Native Homeownership Coalition
The South Dakota Native Homeownership Coalition was born out of a need to expand homeownership opportunities for Native Americans in the state of South Dakota. Created in 2013, the Coalition is a diverse group of agencies, institutions, and organizations that works to increase homeownership opportunities for South Dakota’s Native people to build strong and healthy communities. Its growing group of members includes representatives of South Dakota’s tribes, federal and state agencies, tribally designated housing entities (TDHEs), nonprofit organizations, housing developers, lenders, and community development financial institutions. The South Dakota Native Homeownership Coalition works to increase Native homeownership rates by strategically leveraging knowledge and resources among stakeholders and other key entities. More information about the Coalition can be found at www.sdnativehomeownershipcoalition.org.