PHOENIX – Educating potential buyers on mortgages and helping them become homeowners sounds like a mission tailor-made for credit unions. But so far no credit unions have joined the Arizona Department of Housing's Task Force on Tribal Housing, although the department's tribal liaison Michael Vaughn emphasizes he'd be delighted to hear from them. The task force was established to deal with a couple major problems facing members of Arizona's 22 Indian tribes when they want to buy a home on reservation land. That land is held in trust. If the borrower defaults, the lender could not foreclose. There's also the issue of title searches, which are conducted through the Bureau of Indian Affairs and can take as long as three years. Some people consider it ironic home ownership is such a problem when jobs at Indian casinos and elsewhere are moving more and more tribal members into a financial position to consider home ownership. Even so, studies indicate more than 56% of households on tribal lands are living in substandard conditions or are paying more than 30% of their income for housing. "The governor meets with tribal leaders quarterly," Vaughn explains. "The issues brought up by tribal leaders were financial education, legal infrastructure needed to bring private financing onto tribal land, and a needs assessment. A lot of tribes really don't have a needs assessment other than a waiting list." He notes completing that assessment is made more difficult by the fact there may be tribal members living outside tribal lands who would like to return. There's also the question of what kind of housing is needed, such as single family or multi-family. Finally there's a need for infrastructure including water and power to supply the housing that would be created. But Vaughn says there has been progress since the task force was formed not quite two years ago. "Eleven of the 22 tribes have adopted codes and ordinances that would allow banks and other private financial institutions to lend on tribal land," he says. "The financial education subcommittee has developed a resource guide for financial institutions that work on financial literacy. The infrastructure subcommittee has identified funding sources and technical expertise. The legal documents group has developed a list of model codes and ordinances. The needs assessment subcommittee has developed a document that will help tribes do a needs assessment." Each tribe can adapt those benchmarks to match specific local needs. Vaughn stresses the result must meet the requirements of both tribal members and lending institutions. Options have been identified to ease the concerns of lenders about repossessing property if the buyer defaults. The tribe can work with the borrower to help them become current with the mortgage. The tribe can buy the home and lease it to another family member if the land is in trust for the family or, if the house is on tribal land, lease it to another tribal member. There's also the HUD 184 program under which HUD guarantees the loan. Some tribes, for example the Navajo Housing Authority, have developed their own loan guarantee programs. Jeff Gray, the department's public information officer, underscores that credit unions are welcome to help with this effort. "Credit unions can play a vital in the overall housing marketing. If they would like to be part of the effort to provide lending on tribal land, we'd love to have them at the table," he states. -

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