Fahe Spotlights Our Work with Native CDFIs During Native American Heritage Month

There are significant barriers to homeownership in Native communities: historic disinvestment, limited housing stock on tribal land, tribal land status and lengthy loan processing timelines. Fahe has faced many of the same challenges in persistent poverty areas of rural Appalachia for 40 years. Fahe recently began applying our acquired knowledge to help increase homeownership in Indian Country.

When Fahe decided to join the work of creating more financial inclusion for Native people, we looked to Native Community Development Financial Institutions (NCDFIs) as trusted partners already working in Native communities. Susan Hammond, a member of the Penobscot Indian Nation in central Maine, is Fahe’s NCDFI Relationship Manager. With 20 years of experience as founder and Executive Director of Four Directions Development Corporation, she understands how NCDFIs operate and skillfully identifies the best assistance Fahe can provide.

In building relationships with numerous NCDFIs, Hammond learned that each had a unique set of challenges. Understanding their diverse needs and capacities informed a set of customized solutions that will ultimately help each organization access new and improved transformative homeownership resources for the families they serve.

Leaders realized the Native community lenders were offering very few mortgages. The complexity of the mortgage process and a lack of access to capital makes it difficult for small rural CDFIs, especially Native ones, to provide that service. A needs assessment determined that aiding the financial organizations in accessing the secondary mortgage market was a powerful first step. This commonly-used marketplace tool allows lenders to sell mortgages to investors, freeing up capital previously designated for mortgages to make more loans.

With Fahe’s lending resources and extensive network of 200 brokers in 19 states, four partner NCDFIs, serving a total of 30 tribes in four states, we are now able to provide a fuller array of homeowner services for the Native clients of our partners.

The small financial organizations can facilitate client loans through Fahe, which underwrites the loan and sells it to an investor, without the NCDFI having to process the mortgage or raise the capital themselves. Fahe can offer Freddie Mac HeritageOne Mortgages and HUD Section 184 loans that provide access to conventional financing for homes located within eligible tribal areas. Additionally, the Fahe team is designing some innovative in-house loan products particularly suited for the needs of Native clients.

For those NCDFIs seeking to build their own mortgage capabilities, Fahe provides technical assistance to develop a strong program. Targeted training is an ongoing need, but finding the time is challenging for small NCDFIs whose staff wear multiple hats. Fahe created a passthrough self-study online education program through the Mortgage Broker Association Education Division on accessing secondary mortgage training. Hammond is seeking to build on that with a credentialed, A to Z comprehensive training model that incorporates individual and organizational licensing and lending regulations, developed with current partner Oweesta Corporation and additional Native housing practitioners.

“The beauty of Fahe is that we can bring the financial institutions into Fahe’s lending network from where they are at, they don’t have to have everything in place in the beginning,” said Hammond. “We are a trusted partner with a mission focus and have more loan products than a NCDFI can offer. Fahe will treat their Native borrowers with respect and caring, and we understand what it means to loan in Native communities.”