The lack of affordable housing and other structural barriers to homeownership are a nationwide problem. Yet, for Native communities living on tribal lands, those dynamics become an even more complicated challenge to overcome. They are often overlooked by traditional state, local, regional and federal housing assistance programs and minimized as constituents given their unique sovereign legal status.
While there are several federal laws aimed at increasing financial equity for Native communities, the lack of trust Native communities understandably have about the federal government’s troubling history with tribes leads to skepticism and underutilization of federally-sponsored housing programs.
“Due to the unique land status of tribal reservations and trust lands, financing options for home purchases are severely limited. This situation is exacerbated by the absence of tribal lending laws, including lending codes, land use ordinances, building codes and a court system capable of effectively adjudicating these laws,” said Matthew Lewis, the executive director of Four Directions Development Corporation in Maine. “Tribal nations that have implemented such laws face additional challenges due to their complex trust relationships with federal agencies. Only after addressing these challenges can a homeownership process that resembles traditional norms begin.”
The multiple financial barriers Native communities face make it hard to participate in one of the major generators of economic stability in this country: homeownership. A number of Native community development financial institutions (CFDIs) are working to bridge the financial divide between tribal communities, private sector home financing providers and public sector governmental agencies.
“Native business owners and Tribal nations experience a whole spectrum of barriers when it comes to accessing banking services and financial tools,” said Casey Pearlman, executive director of the Affiliated Tribes of Northwest Indians Economic Development Corporation. “Materially, Tribes can be geographically far from banking services with some of the Tribes that my organization serves reporting a one-hour drive from even the nearest ATM.”
Private lenders are effectively leaving aspiring homeowners living on tribal lands with no option other than mobile homes (labeled “manufactured housing” in official data), a depreciating form of housing with much higher interest rates. “Zero of the three largest mortgage lenders in the country participate in the Department of Housing and Urban Development’s (HUD) Section 184 program of absolute loan guarantees on mortgages made in tribal areas,” NCRC reported in the 2023 study Redlining the Reservation: The Brutal Cost of Financial Services Inaccessibility in Native Communities, “[with] just 2,200 loans having been made under that program each year on average, across the entire nation.”
Taking a more proactive approach to removing financial barriers for those hoping to achieve housing stability of tribal lands is an important next step. CDFIs, policymakers and banks looking to solve these problems must also be mindful of the unique legal requirements and stipulations around building housing on tribal lands.
There are several ways that these barriers could be removed for aspiring homebuyers and current homeowners, according to Mac McNeil, executive director of NCRC’s Community Development Fund (NCRC CDF). “If we want to solve the capital access problems impairing local economic growth on tribal lands,” McNeil said, “we need to streamline the Bureau of Indian Affairs (BIA) lease and mortgage approval processes, support expanded use of Title Status Reports (TSRs), help tribes build capacity for land records management, promote leasehold mortgage models and lender familiarity with trust land lending.”
McNeil’s team at NCRC CDF works with hundreds of CDFIs across the country, bringing vital resources, organizational training and funding opportunities towards furthering their reach in underserved communities. NCRC’s CDF team recommends several tangible ways stakeholders can provide support to Native CDFIs:
- Supporting Tribal CDFIs by investing in, or partnering with them, to leverage their localized trust and expertise in housing finance.
- Promoting financial education by scaling culturally appropriate homebuyer education programs on credit, mortgages and land rights.
- Align housing efforts with Indigenous stewardship values by incorporating green and sustainable housing standards into sustainable building practices and energy-efficient housing developments.
- Funding housing and redevelopment planning by offering grants or technical support for predevelopment work (e.g., land surveys, environmental reviews, architectural plans).
It is crucial that economic justice advocates, policymakers at all levels, housing developers and mortgage lending institutions come together to produce new and sustainable solutions for providing more access to capital for home buying and affordable housing for Native communities on tribal lands.
“At the end of the day, building the administrative and legal infrastructure and developing the relationships…. to support the work being done by Native CDFIs and other Native-led non-profits on the ground is what is needed,” said Dave Castillo, the executive director of Native Community Capital and a member of the NCRC Board.
“There is no silver bullet,” Castillo said. “Just the hard work we all need to engage in and commit to.”
Timantha Goff is the Managing Editor for NCRC’s Communications team.
Photo courtesy of the Navajo Nation (NN)’s Office of the President of several Native CDFI practitioners meeting with NN President Dr. Buu Nygren.
