The Department of Housing and Urban Development’s Section 184 Native American mortgage program has just had its most successful year, at nearly a half-billion dollars of home finance to American Indians and Alaska Natives.
In a year where overall mortgage lending has been stagnant, the HUD 184 has kicked it up a gear and increased by 25% over fiscal 2009. And the program has tripled its annual fundings since 2006 during an era of retrenchment and disaster for the mortgage industry.
Since inception during the 1990s, total fundings are $1.8 billion for 12,062 mortgages, for an average of about $150,000 per financing.
One big reason for the jump in volume has been an increase in the number of loans made to Native Americans off-reservation. Some 10,000 loans have been made to Natives living on “fee simple” land (private property) vs. a little more than 2,000 to those living on tribal trust land or “allotted” trust land. (The U.S. government holds tribal lands “in trust” for tribes or individual Indians, a status that makes mortgages much more difficult to perfect.) That’s about 16% going to Natives who live on tribal trust or allotted land. But in fiscal 2010, of 3,028 loans made to Indians and Alaska Natives, just 183 went to mortgages on reservations, or about 6%, indicating an acceleration of a trend away from reservation loans, where alternatives are scarce, to private property loans, where alternatives are plentiful.
In fiscal 2004, for example, fully 40% of Section 184 money went to tribal trust or allotted land. A lot of the private property loans, however, are located in Alaska and Oklahoma, two states where reservations per se do not exist, but many people live in Native areas there. And in fact, Oklahoma ($593 million in volume) and Alaska ($290 million in volume) are the two states with the biggest Section 184 volume, with nearly half the financings.
Considering that total mortgages to Native people are off by more than 60% since the market high, Section 184 has been doing a terrific job of increasing its numbers year to year.
But attention must be paid to the credit-starved reservations where so many are so poorly housed, and where Section 184 has seen a numerical falloff, not an increase. An effort should be made to boost totals there as well.
