President Trump signed new legislation this week aimed to facilitate mortgage lending and open up homeownership to members of Native American communities across the U.S.
Sponsored by members of South Dakota's congressional delegation, the Tribal Trust Land Homeownership Act sets new timelines for the review and processing of mortgage applications involving properties on reservations and other land overseen by the Bureau of Indian Affairs.
"For years,
"With the enactment of our legislation, this mortgage approval process will now be expedited, encouraging homeownership across Indian Country," he said.
The bureaucracy surrounding obtaining mortgages on tribal trust land, which requires approval from BIA, frequently created delays for what "is supposed to take 30 days but often takes over one year," according to Thune's counterpart, Sen. Mike Rounds, R-S.D. "This is a long-overdue win for tribal communities in South Dakota," Rounds said.
What is required in the new legislation
With the new law in place, the Bureau of Indian Affairs will be required to adhere to the following timelines.
- Completion of the preliminary review of single-family mortgage packages within 10 days to ensure all necessary documents are in place.
- Notification to the lender of any missing documents in the mortgage-application package in no more than two subsequent days.
- Final approval or denial of the application by the bureau within 30 days.
- Processing of a certified
title-status report , if not previously completed, within 10 days of mortgage approval.
Any reason for delays to the mandated timelines will be sent from BIA to the applicant and their lender.
The new act also establishes the newly created position of realty ombudsman within the bureau, to serve under the direction of the Secretary of the Interior. The ombudsman will be responsible for ensuring that all BIA regional offices meet the review and processing deadlines.
In a review conducted by the Government Accountability Office in 2023, bureau officials cited staff shortages in some of its offices as a primary cause of inconsistencies in the time it took to successfully complete loan processing. Following publication of the review, the Department of the Interior made several recommendations, including updated training and oversight policies to track results that could shorten the time frames.
Introduced last year, the Tribal Trust Land Homeownership Act passed unanimously in the Senate in December. The bill was subsequently approved by the House of Representatives in March this year.
Companies currently participating in the Section 184 Indian Home Loan Guarantee program said the law could usher in a business environment that results in increased homeownership among Native Americans. Guaranteed by the Department of Housing and Urban Development, Section 184 mortgages are designed specifically for Native households to assist in financing properties either on or off tribal land.
"From a lender perspective, any effort that helps reduce complexity and shorten timelines is a positive step for tribal housing and lending," said Matt Brown, executive vice president, director of mortgage at Oklahoma-based Sovereign Bank, the nation's largest owned by a Native American community.
"Simplifying parts of the process may also encourage more lenders to participate in programs like HUD Section 184, which could increase competition, pushing rates down and, with any luck, make homes more affordable for potential buyers," Brown added in a statement sent to National Mortgage News.
Native American homeownership advocacy groups, likewise, welcomed the new law after it became official upon President Trump's signing.
"By removing unnecessary bureaucratic delays, this bill helps unlock opportunity for Native families, strengthens pathways to homeownership and supports economic mobility in our communities," said National American Indian Housing Council executive director Rudy Soto.
"We look forward to continued collaboration to build on this momentum and ensure tribal housing is fully included in the broader national housing agenda," he concluded.
