Making Homeownership Affordable for Native Americans

While there are many downpayment assistance programs at the local, state and federal levels to help eligible borrowers, the options available to Native Americans are fewer, limiting their ability to own a home. Land in Indian Country is not only rural and remote, but often protected with regulations resulting in a scarcity of services. This has created a large discrepancy between Native American and overall rural homeownership. The homeownership rate is 81 percent in the rural United States and 52.9 percent for Native Americans.   

Programs like the Indian Home Loan Program and the Rural Development agency of the Department of Agriculture offer both direct and guaranteed home loans for Native Americans, but there’s still much room to increase the affordable financing options available to tribal members. Although they have helped Native Americans achieve homeownership, government programs should not be the only source of lending capital. 

Home Mortgage Disclosure Act (HMDA) data does show that borrowers in Indian Country are looking for alternatives. The Center for Indian Country Development recently noted that Native American borrowers more often apply for manufactured home loans. HMDA data also shows that loans to purchase manufactured homes are much more likely to be high-priced, and by a higher margin, than mortgages on site-built homes. This high financing prevents manufactured homes from being as affordable as they should be for borrowers.

Even after establishing multiple financing options in Indian Country, they must be adjusted for different tribes. Culturally sensitive education is key to ensuring Native American borrowers understand the terms and conditions of financing options available to them. There are also geographic challenges due to the rural nature of some tribes, as well as challenges accessing areas due to inclement weather. Finally, there is the question of determining whether new homes are manufactured or site-built.

To address these interdependent concerns, we must recognize that strategic networks and partnerships are needed at every level, and must consist of tribal leaders, federal and state agencies, community organizations, private mortgage lenders and other appropriate housing stakeholders in Indian Country.  Prosperity Now continues to support the work between private and public organizations that collaborate with tribal leaders and use innovative mortgage and lending tools to expand the options for financing homeownership in underserved rural markets like Indian Country.

Prosperity Now believes that whether you own or rent your home, it should be affordable. It is through the work of our committed partners in the I’M HOME Network that we continue to advance our vision of ensuring everyone in our country has a clear path to homeownership.

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