How Financial Capability Services Can Prepare Native American Families for Homeownership
Editor's note: This is a the second in a series of blog posts about increasing homeownership among Native Americans. The first post examines the major barriers that have limited homeownership on Native American lands.
“There are thousands of households in Indian Country that are ready for homeownership right now. And there are many thousands more that could be.”
Ohkay Owingeh’s Councilman, Joe Garcia, is correct in his observation that many Native American families around the country are ready to become homeowners. These families would benefit greatly from programs that facilitate homeownership. In honor of Native American Heritage Month, Prosperity Now continues to discuss homeownership as a pathway to economic prosperity and community development in Indian Country.
In the recently-released Tribal Leaders Handbook on Homeownership, we see that securing homeownership for Native Americans is about more than obtaining financing, although that is a major challenge. It’s also about properly preparing Native American families to manage the financial challenges associated with owning a home. Research has shown that financial capability services can help individuals increase their financial security and break down barriers to securing and maintaining stable housing.
Prosperity Now has promoted the integration of financial capability services into housing programs as a holistic way to build financial stability. The opportunities created through financial capability services, increasing financing options and increasing the number of affordable units through manufactured housing have been highlighted in our work with housing organizations that are integrating financial capability. In this model, financial capability services can be implemented in a variety of ways, ranging from basic coordination and referral of clients from one agency to another, to the building of an organization’s capacity to offer services.
In the case study presented in the Handbook, emphasis is placed not only on education, but culturally sensitive education that respects the customs and traditions of the tribes participating. The Handbook highlights a homebuyer program offered by the Confederated Salish and Kootenai Tribes on the Flathead Reservation. These tribes implemented a Housing Authority (SKHA) that oversees many programs intended to help pave the way to homeownership.
The homebuyer program has four areas of focus: application and intake; action planning; homebuyer counseling, readiness and education; and foreclosure counseling and prevention. During the first portion of the program, participants go through exercises to get a more accurate picture of their current financial situation and how they presently manage their money.
After that, SKHA staff reviews each participant’s financial situation and begins to separate participants into various categories. This process, known as customer segmentation, has many benefits for potential homebuyers. It allows clients with the same issues to work with staff most qualified to deal with their challenges. Those who are credit invisible or unlikely to qualify for a mortgage in the near term receive financial coaching or counseling as part of a long-term action plan. Those who need more specific help, like saving for a downpayment or increasing their savings in general, can receive support from staff. Participants who are “mortgage ready” are given details on banks that may be able to provide them mortgages.
Our blog series on securing homeownership for Native Americans will continue past Native American Heritage Month. To learn even more about manufactured housing and what you can do to make it more accessible for low-income families, join us at the I’M HOME Conference this December!