January 22, 2004
CHICAGO FEDERAL HOME LOAN BANK BUYS HUD MORTGAGES TO SUPPORT HOMEOWNERSHIP IN INDIAN COUNTRY
FHLB Partnership Extends American Dream to Native American Families
CHICAGO - U.S. Housing and Urban Development Assistant Secretary Michael Liu joined Alex Pollock, President and CEO of the Chicago Federal Home Loan Bank to announce the first purchase of HUD Section 184 mortgages by a Federal Home Loan Bank. This HUD program is designed to give Native American families the opportunity to own their own homes. The involvement of the Chicago FHLB extends the initiative to the 884 FHLB member financial institutions in Illinois and Wisconsin.
"The Federal Home Loan Bank's purchase provides a welcome addition to the financial options available to Native American families and is another step towards increasing homeownership for more Americans," said Liu. "These families are now living the American Dream of homeownership."
"We are pleased to use our funding capabilities to expand the home financing
options for our member institutions, so they in turn, can better serve the needs
of their Native American customers," said Pollock.
The first transaction involved the sale of three mortgages worth $217,248 to the Chicago FHLB by Chippewa Valley Bank, a tribally owned bank in Winter, Wis., which originated the loans. The transaction relieves Chippewa Valley of the interest rate risk associated with the fixed-rate mortgages. The Jackson County Bank, in Black River Falls, Wis., is servicing the mortgages for the Chicago FHLB, which holds the loans in its investment portfolio. The families who received the home mortgages are members of The Bad River Band of Lake Superior Chippewa Indians and The Lac Courte Oreilles Tribe.
Liu presented plaques to Eldridge Edgecombe, Senior Vice President and Community Investment Officer for the Chicago FHLB, Charles Warner, Vice President of Chippewa Valley Bank, and Kim Borgwardt and Judy Lee, Home Mortgage Consultants for the Jackson County Bank at a ceremony at the Chicago FHLB's headquarters. Also attending the event were Terri Verville and Delores Martin from the Bad River Housing Commission and Lorene Wielgot and Brian Bisonette of the Lac Courte Oreille Tribe.
HUD's Section 184 Loan Guarantee Program was created in 1992 to address the lack of mortgage lending for Native Americans. Indian lands are typically held in trust, complicating the ability of lenders to secure their interest in a mortgage. The Section 184 program guarantees mortgages on Indian lands, enabling private sector lenders to make mortgage loans to eligible borrowers which include Natives American families, tribes and Indian Housing Authorities who are purchasing homes located in Indian Country. The program can also be used to rehabilitate existing homes, build new homes and refinance higher interest rate loans. Since 1995, when HUD guaranteed its first loan, there have been 1,434 loans guaranteed with a dollar-value of $141.3 million.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.
The Chicago Federal Home Loan Bank is a AAA-rated wholesale financial institution that provides liquidity for its members' mortgage lending activities. The bank offers fixed and floating rate loans, the Mortgage Partnership FinanceÒ Program and other credit products, as well as funding for affordable housing and community development programs.