A traveler in Indian country 20 years ago would have been hard-pressed to see any evidence of private mortgage lending on reservation trust land. That’s because there wasn’t any.
The Federal Government Accountability Office did a survey of most of the country’s reservations between 1992 and 1996 and could find only 91 mortgages made on all those homelands during those five years. And those mortgages came from just two reservations: the Tulalip in Washington and the Oneida of Wisconsin, which had relationships with local banks. All the rest lived in a mortgage desert.
For various reasons (racism, poverty, lack of financial infrastructure, land status), lenders had drawn big red lines around reservations and said, directly or indirectly, we don’t make mortgages here.
What if the same traveler came back to Indian country now, two decades later? He would probably not say an impressive dent had been made into Native housing problems, but he would see evidence that private housing money, both homeownership and rental, channeled through the sovereignty of Indian nations, is making a small dent.
It would be interesting if GAO was to repeat that landmark study now. Without such a survey it’s not possible to say how many mortgages are being made on trust land these days, but one Indian housing loan program (authorized in 1992 and commencing lending in 1995) can give a representative peek at the whole. As of September 30, 2015, the Housing and Urban Development section 184 program had guaranteed more than 3,800 trust land mortgages for nearly half a billion dollars in finance, a more than forty-fold increase from those 91 back in the 1990s. And the loan program has guaranteed more than 17,000 mortgages to Natives in Alaska and Oklahoma, states with big Indian populations but virtually no trust land.
In addition, tribal and tribal housing leadership has leveraged federal housing assistance to attract private assistance in a myriad of different ways. The 1996 Native American Housing Assistance and Self Determination Act, one of the most sovereignty-friendly bills to make it through Congress in recent decades, gave tribes control of their housing money with a mandate to bring in outside funds to build and rehab more houses. Some tribes have tapped banks and capital markets to finance hundreds of housing units at once, like the Cherokee Nation of Oklahoma and the White Mountain Apache of Arizona. The Cherokee Nation got an impressive $50 million loan from Bank of Oklahoma (guaranteed by the HUD Title VI program) while the WMA navigated 10 separate private funders to float a $25 million mortgage revenue bond.
The White Mountain deal was an example of everyone working together—the tribe, lenders, non-profits and the federal government—to build hundreds of homes on a remote tribal homeland. Other outside funding sources like the Low Income Housing Tax Credit, the Federal Home Loan Banks’ Affordable Housing Program, and Rural Housing Service loans, have given tribes more tools to put tools in the hands of construction workers on their homelands.
If the traveler went now to the reservation of the Bay Mills Indian Community on the shores of Lake Superior in Michigan, he’d learn that more than 20 percent of all homes have mortgages through two lenders using federal insurance programs, even though most are on trust land. That is a literally unimaginable figure 20 years ago.
Or if he visited New Mexico he could see more than 100 houses being built on the San Felipe Pueblo outside of Albuquerque using money in part from Bank of America, and a complex project using state and federal money to put up a 61-unit housing development right next to the tribal bison range in remote Nambe Pueblo.
And the traveler would feel that long, patient work by tribes and federal and private partners has laid the groundwork for the possibility of eventually alleviating housing problems for hundreds of tribes.