Native Americans struggle to obtain home loans

The Fargo Forum reports in its Sunday edition that one out of every four Native Americans in Minnesota is denied when seeking home mortgage loans. In North Dakota, the rate is one out of three.

The Forum analyzed a database containing records of 34,373 home loan applications made in North Dakota and 537,288 filed in Minnesota last year, as reported under the federal Home Mortgage Disclosure Act (HMDA). The 2006 findings are the most recent available.

The records consisted of applications for home purchase, home improvement and refinancing.

But why is the rate so high?

Poverty would appear to be one reason. The adult poverty rate for Native Americans is about 33 percent, triple the rate for whites.

Not surprisingly, the denial rate for applicants overall is increasing. Last year the denial rate was 29 percent in the U.S.

According to the Washington Post…

“Black borrowers received high-cost loans 52.8 percent of the time when they refinanced home loans last year, vs. 49.3 percent in 2005, the Fed report said. Hispanic borrowers received high-cost refinancings 37.7 percent of the time, up from 33.8 percent in 2005. The rate for white borrowers was 25.7 percent last year, compared with 21 percent in 2005.”

A Federal Reserve Board report (pdf) also points out that even when minorities are able to get loans, the costs associated with them are higher than for whites.

  • c

    I know that I am fourth generation-olive pigment or perhaps olive leaning more ivory white pigmentation. Could I get a decent deal to purchase a home? I am not so sure as I am in a lower income bracket by choice. According to our society-accepted or approved competency is measured in dollars and cents determined by your worth or status in the work field. So your status-in our society- determined by the amount of money you earn-establishes whether you are dependable-worthy-reliable?

    I had a conversation last night with a friend who is an artist…makes his living by his paintings he sells. He lives in an art co-op. He is probably fifth or sixth generation PASTEY white. He could never imagine working for THE MAN. He is honest, reliable and hard working. Would he ever get a loan?

    Are you asking or stating in your article that these “Blacks” or African Americans are getting a bum steer on their loans because of a darker pigmentation?….. and the Hispanics, or do we call them the “Browns” get a better deal because they are slightly lighter?

    (Collins notes: I’m stating nothing other than what was written)

    So sad.

    That would mean that it would be unwise of my caucasion self to buy a house in the summer because I tan very easily.

  • Dan

    The banking industry approves or denies your loan based upon your income, credit rating, and available assets. In a nutshell, the loan rejection rate is proportional to the poverty rate of the demographic group. Why is this a shock to the community? This has nothing to do with THE MAN or race. Whitey isn’t trying to hold back the Native American people. It’s based upon risk. If an individual cannot prove they have the assets and steady income to pay back the bank, they won’t get the loan. It’s very cut and dry. It may be prudent to look at all the facts and figures before we start throwing around the race card.