ST. MICHAELS, Ariz. – The Navajo Partnership for Housing here is about to close a landmark 50th mortgage on the giant Navajo reservation, where until just a couple of years ago virtually no lender would extend credit.
And, in its efforts to jumpstart a real estate market on the reservation, the partnership has for the first time become a mortgage lender itself.
Executive director Richard F. Kontz, Navajo and Creek, said that with 46 loans closed and six more approved for funding and near closing, the 50th mortgage could be done in the next couple of weeks.
The six borrowers with approvals are waiting on documents from the BIA or a release of money from the federal Department of Housing and Urban Development. Closing could follow in as little as a week, he said.
The majority of loans volume to date have been through the federal Rural Housing Service 502 direct mortgage, Kontz said. But there have been a handful of private mortgages originated by lenders and sold to Fannie Mae, the “quasi-governmental” mortgage agency based in Washington, D.C.
Loans have been closed by Suburban Mortgage of Albuquerque, Wells Fargo Home Mortgage of California, Long Beach Mortgage, also of California, and Gallup Federal Savings Bank, Gallup, N.M.
Kontz estimated the average loan at $85,000 to 95,000, but said they range from the $40,000s for rehab loans to as high as $130,000.
The Navajo Partnership itself originated and closed its first mortgage, funded by Suburban Mortgage, and has also made three of those about to close.
The director noted that former President Clinton designated the NPH a “One Stop Center” for American Indian mortgages in 1998, and said “It’s kind of hard to promote that concept when you can’t make originations.”
He noted that becoming a mortgage lender means some adjustments for his staff of 13. Now, the four field workers must learn how to take loan applications.
Another concept that “is going to take off,” the director says, is NPH buying, rehabbing and selling homes on the reservation, thus creating a real estate market on the Navajo for the first time. It received a $250,000 grant to establish a revolving loan fund from PMI Mortgage Insurance Co., San Francisco. It bought three houses and sold one already, and is evaluating another eight properties, Kontz said.
NPH hopes one of these transactions, on a house in Shiprock, N.M., will mark the first true “One Stop Shop” deal, with NPH acquiring the property, rehabbing it, selling it and originating the mortgage. Kontz said he hopes NPH will be able to announce the closing March 16.
NPH is heading toward developing a construction arm to handle building work. Kontz said deals like this one will benefit the Navajo family selling the house, the Navajo contractor and workers doing the rehab and the tribal family that buys the house.
In other news, NPH announced it has given a Platinum Award to PMI Mortgage for the loan fund grant. The award, given to organizations that practice corporate giving and social responsibility that benefit the Navajo tribe, was presented at the recent NPH annual meeting.