TRAIL — A new program administered by the Housing Department is providing a different direction for Tribal members on the road to home ownership.
Launched by Tribal Council approval June 12, the Home Expansion Loan Program (HELP) is proving to be the next best step for members previously denied mortgage loans to build financial stability and bolster chances for home loans in the future.
“A lot of Tribal members apply for loans, get turned down and don’t understand why. We give them a better idea of what banks want to see,” said Carol Lowe-Chin, Housing Department loan manager.
Training classes led by Native Learning Center (NLC) staffers began Aug. 18 with a hopeful group from Hollywood Reservation.
On Oct. 28, training and development specialist Patti Kay Mitchell and curriculum design and development specialist Nathan Harris met with another group at Trail’s Seminole Field Office in Miami.
In less than four months, 13 Tribal members had achieved pre-approval for home loans and two loans were days from closing, Lowe-Chin said.
“Members are asking to learn as much as they can. Folks are very excited,” she said.
Brighton hosted a training meeting Nov. 23. The next classes will be scheduled in early 2016.
Rhonda Bain, of Hollywood, called the program “a bridge to a brighter future” for all Tribal members – “especially for our young adults and their children to come.”
As far back as she can remember, Bain, 46, recalls standing in line on the Hollywood Reservation with other Tribal members. They were doled out rations of U.S. government commodity foods such as cheese and canned meat. Then, money and jobs were scarce.
“So maybe I didn’t pay a bill on time. Maybe the car payment was late once too many times and I ended up with a credit record that stayed with me even when I paid the debt off. There is a stigma attached to debt that is hard to shake,” Bain said.
Few knew that bad credit scores would haunt them years later when the Tribe found economic success and wealth.
The HELP program aims to rectify years of financial missteps for older members and guide young members who are just beginning to spend, save and invest.
Classes begin with the basics. Attendees share truths about how they prioritize spending and how much they devote to saving. Instructors lend advice for short-term, long-term and emergency reserve savings.
At the Trail seminar, Harris and Mitchell shared stories about their personal family situations. In Harris’ case, his mother controlled the family finances but was generous to a fault. She loaned money to many relatives who never paid her back – so much that she drove her own household into financial failure.
For Mitchell, her father managed the money and her mother was left in the dark. When her father passed, her mother was easily tricked by predatory lenders into loans that were impossible to pay back.
“We all try to do good things for the right reasons, but we have to see reciprocation. It has to come back to us in good ways,” Mitchell said.
Tribal members can qualify for a mortgage loan up to $350,000 to build, purchase or renovate a home on or off reservations. Some Tribal members can also get additional mortgage loans for architecture, engineering, site development, down payment and closing costs. The total of both mortgages can be no higher than $500,000.
But first, prospective recipients must show proof of previous denial for a home loan through the Department of Housing and Urban Development (HUD) Section 184 Indian Home Loan Program. The HUD program, established in 1992 to correct the lack of mortgage lending throughout Indian Country, boasted through 2014 nearly 24,000 loans that amounted to almost $4 billion.
HELP also requires that Tribal members receive a certificate of completion for the first-time homebuyer education class from NLC and complete the Tribe’s financial literacy and credit restoration programs. Credit problems will be assessed at the start of the credit restoration program and customized credit repair steps will be defined.
Bain said no one should be afraid to start. The classes are friendly, informative and filled with family and friends.
“You are not alone whether you screwed up in college and missed a car payment or worse. The classes are so helpful and I had someone walk me through step by step … I never owned a house before, but by the grace of God, I will own one soon,” Bain said.
Through HELP, Tribal members get three years to address all credit issues and refinance the HELP loan. In some situations the program can be extended another year.
“But the way the program is designed, payments are guaranteed through auto pay out of dividends,” Lowe-Chin said, making the mortgage payment a twice monthly priority.
As of mid-November, 400 Tribal members with homesites already assigned were on waiting lists to build homes of their own. HELP also extends to homeownership off reservation. Another 227 members were on rental property waiting lists.
“We’re still barely scratching the surface,” Lowe-Chin said. “But we want the Tribal member to know that we are not only here to assist with Section 184 loans or HELP loans, we are here to jump in and assist with any real estate transaction whatever and where ever.”
The NLC’s pre-homeowner classes are essential to understanding financial processes, Lowe-Chin said.
According to the HELP program overview, the Tribe is committed to helping members in financial need but insists that self-reliance begins with financial skills and independence – “a lack of personal financial skills results in families living paycheck to paycheck, failure to qualify for home mortgages and victimization of predatory lenders.” Extremely high car loans and credit card interest plague many members – a direct result of poor credit history.
Though much of initial class time is spent on conquering debt, participants also learn how to manage budgets, turn bad credit around and maneuver the entire home mortgage process from application to approval, closing and payments.
Bain said the classes restored her confidence in the future.
“It gave me my financial backbone back. After being turned down for a mortgage once, I was very reluctant to try again,” Bain said. “I am so, so thankful to the Tribe’s strives to help. I pray and pray that everyone take heed, especially young adults. It’s a unique opportunity. It’s a bridge to a brighter future.”