Chicago Federal Home Loan Bank Buys HUD Mortgages to Support Homeownership in Indian Country

Friday, January 23, 2004

Assistant Secretary Liu was in Chicago yesterday to announce the first purchase of HUD Section 184 mortgages by a Federal Home Loan Bank. The involvement of the Chicago FHLB extends the program to nearly 900 financial institutions in Illinois and Wisconsin.

Because Indian lands are typically held in trust, private sector lenders face a number of hurdles when attempting to secure their interest in a mortgage. The Section 184 program helps lenders overcome those hurdles by guaranteeing the mortgages, enabling lenders to make mortgage loans to Native American families, tribes and Indian Housing Authorities. The program can also be used to rehabilitate existing homes, build new homes and refinance higher interest rate loans.

The first transaction involved the sale of three mortgages worth some $217,000 to the Chicago FHLB by Chippewa Valley Bank, a tribal bank in Winter, WI. The families that bought the homes are members of The Bad River Band of Lake Superior Chippewa Indians and The Lac Courte Oreilles Tribe.

The Department guaranteed its first loan in 1995. Since then, it has guaranteed some 1,434 mortgages worth about $141.3 million.

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