Native American Banking Forum October 16, 2002 Neighborhood Reinvestment Corporation • Congressional Chartered National Non-profit • Annual Budget $105,000 million • Support the National NeighborWorks Network(r) which consists of 225 non-profit partnerships across the country • Network production Neighborhood Reinvestment Corporation • National NeighborWorks Network(r) CDFI's • Ellen Lazar-Executive Director Neighborhood Reinvestment Efforts in Indian Country • Navajo Partnership for Housing • Sicangu Enterprise Center-Rosebud Reservation • Existing NeigborWorks Organizations extending services to Indian Country Montana Homeownership Network History • Navajo Nation Div. of Economic Development • OCC, Federal Home Loan Banks • Assessment • Organizational Development Process • Incorporated in 1996 on Navajo Nation • Chartered 1998 as a member of the National NeighborWorks Network(r) Mission Partnership-Board of Directors • Residents on the Navajo Nation • Representatives of Government • Representatives of Business Programs "Sheltering Our People" Homebuyer Education • Preparing for Homeownership "Laying the Foundation" • Family Budgeting "Setting the Cornerstone" • Credit "Building Block or Stumbling Block" • Owning a Home on Tribal Land "Following the Blueprint" • Mortgage Lending "Raising the Structure" • Life As a Homeowner "The Finishing Touches" Homebuyer Education Staff Homebuyer Orientation Schedules Homebuyer Education Schedule Construction and Real Estate Development Services • Assisting customers in identifying floor plans • Developing specifications • Selecting a contractor • Monitoring Construction • Post-Occupancy Support • Site Acquisition and Development • Home Sales Examples of Homes Home Loan Services • Identification of Loan Products • Identification of Secondary Financing • Loan Packaging • Loan Closing First National Bank-Colorado • 5 Construction Loans made • 4 loans in the pipeline Outcomes • 38 Rural Development Rehab Projects • 15-RD 502 Direct loans • 14 Conventional Loans • 2-HUD 184 Loan • 3 Other Loans ---------- 70 single family projects Outcomes • Defining and Improvement the System • Graduating 600 families per year in Homebuyer Education • Gradual Change in expectations related to how housing is financed and how much it costs • Leverage over $2.5 milllion • One Stop Mortgage Initiative Developing a "Buy and Sell Real" Estate Market Customer Demographics • Income • Debt • Savings • Household Size • Household Type Benefits of Local Intermediaries Mortgage Lending Process in Indian Country Contact made to Lender/Government Agency • Applicant receives loan application for: – Section 184 Indian Guarantee – Section 248 Mortgage Insurance Program – Section 502 Loan Guarantee (RHS) – Conventional Loan Products Contact made to Non-Profit • Receives Orientation on programs & Types of assistance • Pre-qualified for loan products • Prepares necessary documentation • Provides Homebuyer Education – Budgeting – Credit – Homeownership Verification & Eligibility • Tribal Membership – Same name, census number and address as on lease • Program Compliance • Land Status – Fee Simple: No Restrictions against alienation or encumbrance; land serves as collateral. Land Status Continued.... – Tribal Trust: Restrictions against alienation or encumbrance; leasehold interest serves as collateral – Individual Trust/Allotted: Restrictions against alienation or encumbrance; Allottee must document interest in land to serve as collateral. Fee Simple • Lender/Agency: – Prepares Credit Package – Orders Appraisal for an existing house or new construction – Approves borrower – Closes Loan NOTE: FHA 248 Not eligible for Fee Simple Recording/Final Steps • Lender/Agency submits loan documents for filing with the local county records office • Final Steps: – Lender/Agency reviews closing package for: • Program Compliance • Issuance of Guarantee Certificate if Government Insured – Sold to Secondary Market • Conventional • Government Guaranteed If Tribal Trust • Tribe assigns parcel of land and issues lease to applicant • Tribe submits executed lease to the BIA for approval/recording • BIA verifies legal description, ownership, existing encumbrances, issues preliminary Title Status Report (TSR) to lender/government agency If Allotted/ Individual Trust • Lender/Agency contacts BIA to obtain a Title Status Report (TSR) to verify applicant's interest in land, legal description & existing encumbrances Leasehold Mortgage Approval • Lender/Agency: – Compiles Credit Package – Orders Appraisal – Reviews executed lease by Tribe, BIA, & Borrower for program compliance • BIA Realty Officer provides Certificate of Approval Trust Mortgage Approval • Lender/Agency: – Prepares Credit Package – Orders Appraisal • BIA Realty Officer provides approval for encumbrance of land. Loan Approval on Leasehold • Lender/Agency approves and closes Loan with Borrower • Lender/Agency submits mortgage documents to Tribe/BIA for: – Signature & Approval of Mortgage – Recording of Mortgage Documents • BIA submits final TSR to Lender/Agency Loan Approval on Allotted • Lender/Agency: – Approves borrower on individual/allotted land – Closes Loan • BIA Credit Officer and Realty Officer – Approves Credit Package • Lender/Agency submits mortgage documents to BIA for: – Signature & Approval of Mortgage – Recording of Mortgage Documents • BIA submits final TSR to Lender/Agency Final Steps • Lender/Agency reviews closed package for program compliance and issuance of guarantee certificate if government insured loan • Secondary Market: Conventional & Government loans may be sold in the secondary market.