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Financial foundation set for potential homeowners

Sarah Cummins

11/27/2001 12:00:00 AM

A recent agreement between financial and Tribal institutions will lend greater opportunities to buy homes on the reservation.

Through Fannie Mae's Native American Conventional Lending Initiative, members of the Saginaw Chippewa Indian Tribe will be able to obtain loans for homes on Tribal trust lands.

"Tribal members will have a chance to own their own homes," stated Saginaw Chippewa Housing Director Ronald J. Jackson. "They're being given the chance to live out the American dream, so to speak, and are stepping into the future. The land itself and whole property becomes part of their portfolio. They can refinance, make improvements and enhance the future."

Through Flagstar Bank, Tribal members can obtain loans on Tribal trust land and on the reservation's fee simple land, according to Flagstar Bank Loan Officer John Pearsall.

"We're one of the few banks that Fannie Mae approved in this area," stated Pearsall. "We've been rated 10th in the nation and the No. 1 mortgage institution in Michigan."

Through this Tribally specific agreement, PMI, a mortgage insurance company, guarantees the bank its money while Fannie Mae commits to buying the loan.

"We're part of what is called the secondary market," explained David Fuentes, Fannie Mae senior business manager of Housing and Community Development. "We purchase loans from lenders across the country and replenish the value of the loan."

Fuentes explained that if the value of the loan is replenished, than there is always money available to borrow.

This is not the first deal Fannie Mae has made of this kind. A similar agreement exists with Bay Mills Indian Community.

"We deal with every Tribe on an individual basis," explained Fuentes. "Each Tribe has its own priorities. Each program is unique."

"We find their laws and ordinances in existence right now acceptable," stated Fuentes about the terms of the agreement and the Tribe's control over many of the technicalities.

Historically, Native people living on Tribal trust land have had difficulty purchasing homes. Until recently, the only loan opportunities available were for five-year balloon agreements.

"In the banking end of it, there was always a question in their minds of how would they ever foreclose in the event of nonpayment," explained Jackson. "The risk was too great. In the past, you could only get a five-year balloon with assurances that the government would back them."

Through this new agreement, lending companies have recourse they can follow in the event of nonpayment through the Tribal justice system, according to Jackson.

"Up until most recently, there hadn't been a 30-year mortgage program on Tribal trust land," said Pearsall. "Now we are offering competitive interest rates as well as the opportunity to refinance homes on Tribal trust lands."

For more information, call (989) 772-2363 and ask for John Pearsall or stop in 1222 South Mission Street in Mt. Pleasant in the Pizza Hut parking lot.