Tribes are Using Creative Place-Based Solutions to Increase Homeownership Options


"Homeownership creates and adapts to our Native heritage in capturing the essence of our being—our hearts are with our family and in our home."

- staff member, Cheyenne River Housing Authority


Demand for homeownership is strong among Native Americans. Yet a smaller share of Native households own homes today than in 2000, and homeownership rates among American Indians are lower than the nation as a whole. Homeownership in Indian Country* is more complex than building a good credit rating, obtaining a mortgage, and becoming a first-time homebuyer. Barriers that discourage lending on tribal trust land, a shortage of housing on reservations, and limited job opportunities call for tailored and stepwise solutions along the path to homeownership. Tribal governments and Native community development financial institutions (CDFIs) are offering innovative paths (PDF) for prospective homeowners to expand beyond traditional homeownership opportunities in Indian Country.

This Native American Heritage Month, we highlight three emerging themes from tribal-led studies, initiatives, and pilot projects that demonstrate the progress and promise for homeownership in Indian Country.

1. Tribes leverage residents' insights to develop tailored homebuyer solutions

The South Dakota Native Homeownership Coalition, in partnership with tribal housing entities and local community and economic development corporations, has conducted housing needs and homeownership studies on six of the nine reservations in South Dakota. Three of these studies on the Pine Ridge, Lake Traverse, and Cheyenne River Indian Reservations addressed the needs and specific characteristics of tribal veterans. A mix of surveys, interviews, and focus groups in these projects identified key issues for homeowners, including high-expense loads and no or poor credit history. Recent homebuyers and potential homebuyers noted that their ultimate success depended on the presence of someone who would help them complete the required paperwork and would stay connected with them and invested in their success throughout the entire purchase process. With the informed consent of participants, the survey data was made available to program staff for use in tailoring case-specific solutions and course invitations for participants in homebuyer programs, as described in this example addressing the needs of tribal veterans:

Solutions tailored to veterans include homebuyer programs, loan packages, and community design. Based on the findings of the veteran studies described above, project sponsors determined that homebuyer programs needed to consider creating veteran’s homebuyer course cohorts to take advantage of camaraderie, similarity of issues, and even the possibility of veteran-specific “sweat equity” programs, where the homeowner contributes in the form of manual labor. Because many veterans have disability or pension income, program managers are considering developing loan packages that are weighted more heavily in favor of income stability than long-term credit history. Future plans include creating housing complexes for veterans, such as separate villages of tiny homes or clusters of homes within large subdivisions, that balance a desire for communing with other veterans with their need for a buffer between units that allows each veteran to focus on their own lives and deal with their own issues.

2. Native CDFIs are key players in expanding access to mortgages and serving as bridges between borrowers, lenders, and tribes

"The 502 relending pilot has opened the door (even if a sliver) for us to deploy a new source of mortgage loan capital, increasing the opportunity for more Native families to achieve homeownership, providing the Native CDFI’s the opportunity to meet the needs of their target market while creating a model for other federal agencies to replicate and meet the needs of expanded markets in the future."

Tawney Brunsch, Executive Director, Lakota Funds


Several federal programs support mortgage lending to Native borrowers. These include the US Department of Housing and Urban Development Section 184 Indian Home Loan Guarantee program (the Section 184 program), the US Department of Veterans Affairs Native American Direct Loan program, and the US Department of Agriculture Rural Development Rural Housing Service Section 502 Direct Loan Program (RHS 502). Collectively, these programs have billions of dollars in loan authority, but not much of these resources (PDF) are reaching Indian Country. Although the Section 184 program, which provides lenders with a 100 percent guarantee in the event of a borrower’s foreclosure, has expanded access to mortgage financing for Native borrowers of all income levels, it has largely bypassed reservations, especially individual and tribal trust lands located within reservations. Properties located on tribal trust land account for about 10 percent of all loans and 7 percent of the aggregate dollar volume insured under the program in recent years.

This lack of investment is compounded by unique challenges faced by Native borrowers, including high energy and utility costs, because of harsh climates and remote locations, and job instability for tribal government employees who are grant funded rather than permanent, leaving their retention subject to unpredictable political considerations. Where the traditional criteria for determining a borrower’s qualification for a home loan has mostly failed, tribal community members living on trust lands, Native CDFIs, credit unions, and other tribal entities are beginning to develop and provide lending options that are tailored to the incomes, employment status, expense loads, credit histories, and relative borrowing comfort levels of potential Native homeowners.

Native CDFIs create innovative lending options for prospective homeowners. For example, the US Department of Agriculture’s new pilot program in South Dakota enables its two partner Native CDFIs, Mazaska Owecaso Otipit Financial on the Pine Ridge Indian Reservation and Four Bands Community Fund on the Cheyenne River Indian Reservation, to relend $800,000 in funds loaned to them by USDA through its RHS 502. In combination with $200,000 of their own matching funds, these CDFIs are developing tailored financing packages that will actually work for local borrowers. This program recognizes the ability of Native CDFIs to evaluate unique tribal housing markets and their local borrowers based on their distinct histories and financial circumstances.It provides critical lending capital to these CDFIs so they can create a track record of concrete lending success in their communities with the goal of increasing traditional mortgage lenders’ interest in lending in Indian Country.

Native CDFIs work with tribal housing entities to prepare and support borrowers. Although many new and emerging Native CDFIs are not yet able to engage in mortgage lending because of a lack of available capital, these CDFIs and credit unions have increasingly taken on a critical credit building and repair role alongside the homebuyer programs conducted by tribal housing entities and community development corporations. The Credit Builder Loan, offered by Lakota Funds, has a maximum amount of $2,500 and is designed to repair credit damage by paying off collection items, such as garnishments or written-off loans. Administrators of early homebuyer preparedness programs, federal agency staff, and lenders initially bemoaned the small percentage of applicants who were qualified for home loans at the time of applying, but these homebuyer programs increasingly recognized that the ultimate success of their programs would hinge on their sustained year-long, and often multiyear, engagement with and counseling of potential homebuyers to repair or build their credit and honestly evaluate their household expenses to more accurately assess their level of affordability.

3. Tribes are providing a range of unique housing options to expand homeownership pathways in their communities

By recognizing that not every potential homeowner is interested in or qualified to purchase a $150,000–$200,000 stick-built home constructed on site, tribal housing entities are using the information they collect directly from these potential homeowners to prepare a wider array of homeownership options. Homeownership programs are now considering villages of tiny homes, portions of subdivisions dedicated to modular homes, and mobile home parks designed with layouts, amenities, and covenants similar to those of subdivisions and resilient communities. These creative adaptations, such as Badger Park at Cheyenne River (PDF), acknowledge that the ability to purchase smaller homes or mobile homes provides an important lower-cost “stepping stone” on the path to the purchase of a more expensive stick-built home. But for many tribal members, these homes may also provide all they need or are interested in purchasing. The involvement of tribal housing entities and Native CDFIs can assist tribal members in assessing their needs, choosing alternatives, and securing fair loan terms.

Some tribes are working to accommodate grassroots solutions, at least temporarily. Development of substantial homebuyer programs and the large-scale construction of new low-income and fair market rental and homeownership units on reservations that have experienced long-standing housing shortages takes time. Families often remain on housing rental and homebuyer waiting lists for years. As a result, residents of overcrowded homes have developed their own novel solutions to generate new housing capacity on some reservations. On the Fort Apache Indian Reservation, several hundred households have purchased premanufactured structures known as “G-sheds” (because of the letter “G” that is affixed to the structure just above the door, which stands for “Graceland Portable Buildings”) to reduce overcrowding in the home and limit the number of family members who are forced to leave the reservation to find available housing. Although considered a less-than-optimal solution because few of these sheds are properly insulated, have running water, or are properly wired for electricity, these sheds allow community members to stay on the reservation while the White Mountain Apache Housing Authority implements its plans to build hundreds of new homes and renovate a large number of existing homes over the next five to seven years. Acknowledging this circumstance was a critical step when the White Mountain Apache Tribe embarked on its Housing Needs Assessment project in October of 2019. Inventorying and mapping these overflow structures ensured that the occupants of these structures were included in the random sample for the household survey so their stories can be included in the findings of the study, providing a more complete picture of the current community.

Alleviating housing shortages in Indian Country will be an ongoing, long-term process. Tribal housing assessments to understand individual needs and preferences, coupled with innovative approaches to homebuyer education, lending, and housing options, will attract more capital to Indian Country for investing in new development, maintaining and upgrading current housing stock, and issuing mortgages for new home buyers.


*The term Indian Country is used in the common colloquial sense to mean tribal areas, including Alaska Native villages, and is not used as a legal term in this blog post.

Photo by Kevin Klingbeil, Big Water Consulting