One-Stop Mortgage Center Initiative in Indian Country: A Report to the President

Authors: U.S. Department of Housing and Urban Development     U.S. Department of the Treasury    

For many years, American Indian and Alaska Native communities have encountered barriers to financing of homeownership in Indian Country. Residents of Indian reservations seeking to acquire home loans are required to obtain numerous approvals and deal with distant providers.. Those entities have been operating with little coordination. Lenders have had to learn to work with changing land status issues and various tribal governments. This combined with the following items present serious challenges:

• higher transaction costs;
• higher pre-development land costs for infrastructure development;
• lack of mortgage information;
• lack of existing housing;
• lack of homebuyer and financial-skills education; and
• lack of savings.

To address these problems, President Clinton issued an Executive Memorandum on August 6, 1998, directing the Secretaries of Housing and Urban Development (HUD) and Treasury to work together with local tribal governments and other federal agencies to streamline the mortgage lending process on Indian reservations. In response to the President's Executive Memorandum, HUD and Treasury, in consultation with the Department of Interior, created the One-Stop Mortgage Center Initiative interagency task force.

The goal of the interagency task force was to make the mortgage process more user-friendly to consumers and lenders. The specific objectives are to:

• Simplify the loan process;
• Develop the capacity of tribal communities to support a private mortgage market;
• Structure programs to improve homebuyer readiness;
• Shorten the period to obtain home loans; and
• Increase access to government guaranteed/insured and conventional mortgages.

This report identifies barriers that limit opportunities, makes recommendations address the barriers, and presents an action plan to implement the recommendations. In addition, through a pilot program on the Navajo Nation and another on the Oglala Sioux Reservation, the One-Stop Mortgage Center Initiative will begin to help bolster the local capacity of Indian communities across the country to promote a mortgage lending market. The initiative also recommends identifying sources of funding for one or more Native American national homeownership intermediaries that would serve as a national resource to support a network of Indian community-based organizations.

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