Loan Think

I am writing this article having just completed an "intense" and very productive two-day Platinum Member meeting so I am feeling pretty pumped.

SAFE ACT LEGISLATION PASSED BY 26 STATES

If there was one thing that wasn't lacking at this year's California Association of Mortgage Brokers annual convention in San Diego, it was motivational and marketing sessions.

The Mescalero Apache tribe totally missed the homebuilding bubble of the late 1990s and the early years of this decade. But now the long housing drought has ended for the New Mexico-based tribe with the recent dedication of 30 single-family homes, the first residential construction on the 460,000-acre Native homeland since 1996.As is often the case in Indian Country, the I-Sah’-Din’-Dii development, touted as the first fully green American Indian housing project, was financed through a myriad of sources and took three years from start to finish. I traveled to New Mexico to participate in the ribbon cutting for the project.The approximately $10 million rental project was awarded $5.8 million in Low Income Housing Tax Credits in 2007 by the New Mexico Mortgage Finance Agency. The tribe contributed nearly $1 million from three years worth of its annual federal housing block fund grants. The NMMFA also awarded the project $315,000 from the Department of Housing and Urban Development’s HOME program (NMMFA administers both the LIHTC and HOME for the state) and $750,000 from its Housing Trust Fund. In addition, $2.6 million was spent on infrastructure construction. The New Mexico Finance Agency (a separate agency from the NMMFA) made a $1 million loan, and the Bureau of Indian Affairs contracted to construct roads for the development at a cost of $927,000. The roads have yet to be built. The tribal housing authority provided the balance of the infrastructure money.Green housing details on the 1,325-square-foot, three-bedroom, two-bathroom homes include passive solar, energy star appliances, heat-retaining concrete slabs, water harvesting, super efficient wood stoves, radian roof barriers (reflective coating that directs heat back into the unit), xeriscape landscaping, and rain barrels. The constructions also utilize low VOC (Volatile off gassing compounds in the paint), are formaldehyde free, and feature construction waste plans, high performance doors and windows, exhaust fans, ceiling fans, clerestory windows for natural ventilation, and utilization of natural watershed with construction of the roads along the ridgelines.Rents on the very low income units will range from $281 to $391 per month. Four units will go to tribal members with incomes at or below 40% of area median income, 11 to those with incomes 50% or less of area median, and 15 to those at or below 60% of area median.Atkin Olshin Schade of Santa Fe was the architect. Daniel Barboa was the lead architect on the project. The general contractor, Pavilion Construction, which operates in Washington, Oregon, Nevada and New Mexico, now has built more than 4,000 LIHTC units in New Mexico.The Raymond James Tax Equity Fund was the syndicator for the tax credits, and Key Bank was the investor. Investors like Key Bank buy tax credits at a discount from par to reduce their tax liability while at the same time financing affordable rental housing for low- and very low-income people. Tribal president Carleton Naiche-Palmer told a joyous ribbon-cutting assemblage at the Mescalero, N.M., site that while “every home that is built is a blessing for our people, we still have work to do to accommodate all the people who have a need. I wish and pray we get more houses in here very soon.”He said the 4,500-population tribe, one of two Apache groups with reservations in New Mexico (a third is located in Arizona), is plagued by homelessness and overcrowded housing.Palmer noted the project had provided employment and training for workers in Otero and Lincoln counties. “We buy our materials from our neighboring communities, like Alamogordo and Ruidoso,” he said. The contractor also sought to employ tribal workers, with as many as 30% Native workers on the project at any one time.Timothy Horan, executive director of the Mescalero Apache Housing Authority, noted that 400 families still remain on the tribal housing waiting list, and that some people on the waiting list died before they could get units in the new development. “Our work isn’t done,” he said.Jay Czar, executive director of NMMFA, said of I-Sah’-Din’-Dii (which means “drumbeat” in the Apache language), “We want to replicate this around the state and around the country. It’s one of the most progressive projects I’ve seen anywhere.” He noted that the project “respects the land” through its green aspects. The contractor also did not level the development area as often happens, but left as many trees in place as it could on the site, which sits on beautiful wooded terrain in the Sacramento Mountains.Eric Schmieder, Indian housing specialist at NMMFA, said the agency has also committed more than $1 million to rehabilitate substandard homes on the reservation. Its REVIVE program has granted $500,000 to do 14 home rehabs on the reservation and the agency has also committed $600,000 in HOME funds to rehab approximately 50 rental units.Private mortgage finance remains largely absent on the reservation, with Schmieder saying he knew of only one mortgage ever done locally. Indian reservation land largely has “trust” status, being held in trust for Indian tribes or individual Indians by the federal government.Private lenders have been reluctant to lend on Indian land. The General Accountability Office, an arm of Congress, could find only 92 mortgages made on reservations between 1992 and 1996 (at two tribes, the Wisconsin Oneida and the Tulalip tribe in Washington state, that had equity stakes in local banks). The pace has picked up a little since then, especially through the HUD 184 guaranteed Indian mortgage program, which has seen more than 8,000 mortgages close in the last 15 years, although many of them are off-reservation.Secondary mortgage agencies have negotiated memoranda of understanding with tribes (the Fannie Mae-Navajo Nation MOU being the earliest), and a landmark piece of legislation, the Native American Housing Assistance and Self Determination Act of 1996, transferred control of federal housing money from HUD to tribes, and directed them to leverage it with private funding, like mortgages and the LIHTC.

Like-minded people network together. Isn't that what Facebook, MySpace and Twitter are all about? No one has ever used the concept of networking as much as Benjamin Franklin and look what he accomplished. Networking, done correctly is building an asset that helps you produce income without your direct effort.

Paul Muolo is out of the office. We're running this story in place of his usual column.

The mortgage industry continues the push towards doing more with less as it tries to cut costs and create greater efficiency. Even though many industry executives perceive “Going Green” as a costly and expensive proposition, they might want to reconsider. There are a number of steps that companies can take to “green” their organization which make good business sense.

I recently read a couple of articles that started me thinking about how we can best serve our senior clients and increase our business at the same time. The first was regarding how our children are not really encouraged to think creatively and how important this will be in the future. The second was at norwichbulletin.com on July 20 and focused on an out of the box way to use reverse mortgage proceeds. Both articles got me thinking.

Doesn’t it seem like mainstream electronic mortgage adoption has been coming for so long now? Lord knows I’ve been talking about it long enough. And some people tell me, “Enough already. I’ve heard it all and I don’t want to hear anymore.” To them I say, “Too bad, I’m not going to stop talking.”

For the last few months my wife has been talking about getting a new car. Stay with me here because there are a few lessons you can use right away.