Expanding Housing Opportunities: The Impact of USDA’s Relending Program on Native Communities
Introduction
Colleen Steel, the executive director of Mazaska Owecaso Otipi Financial, has witnessed the life-changing impact of accessible mortgage options on Native communities. Through efforts like the U.S. Department of Agriculture (USDA) relending program, funding has flowed into areas historically underserved by traditional lenders. This article explores the burgeoning success of such programs and recent legislative advancements designed to sustain and expand mortgage access for Native American borrowers.
Transforming Lives through Relending
Since joining the USDA’s demonstration program in 2019, Mazaska Financial has positively influenced the Pine Ridge Reservation community by issuing 13 home loans worth $2.2 million. “It has helped a lot,” Steel stated, highlighting how these loans have enabled families to transition into homeownership and build personal assets.
Expanding Legislative Support
In a significant move, the U.S. Senate recently passed the National Defense Authorization Act with a 70-20 vote. This bill includes Section 301 of the Rural Housing Service Reform Act of 2025, which authorizes $50 million specifically designated for Native communities. The provision, championed by Sens. Tina Smith (D-Minn.) and Mike Rounds (R-S.D.), heads to a conference committee for reconciliation.
A Study in Success
New research from the Federal Reserve Bank of Minneapolis underscores the impact of the relending program. Between 2019 and 2024, two Native community development financial institutions (CDFIs)—Four Bands Community Fund and Mazaska—issued 35 loans in regions including the Cheyenne River and Pine Ridge reservations. This represents a remarkable 400% increase compared to the pre-program era when only seven loans were facilitated between 2009 and 2017.
The Role of Native CDFIs
The USDA’s relending program, initiated in 2018 with two participating Native CDFIs, has expanded to 11 lenders across eight states. “The outcomes have shown that Native CDFIs can dramatically boost mortgage lending within these communities,” stated Pete Upton, CEO of the Native CDFI Network.
Addressing Historical Disparities
Matthew Gregg, a senior economist at the Center for Indian Country Development, emphasizes that Native borrowers often face significant hurdles within traditional mortgage frameworks. According to his research, on-reservation Native borrowers encounter higher interest rates—averaging 9%—compared to 5% for white borrowers with similar credit profiles. The prevalence of “home-only” loans, which do not attach to land, also perpetuates economic challenges.
Building Trust and Community
Steel emphasizes the importance of trust in her lending approach. Mazaska provides comprehensive support that not only includes financial training but also personal guidance throughout the entire mortgage process. “We build that relationship with them, so they feel comfortable coming to talk to us,” she explained. The organization also offers a compassionate approach in emergencies, prioritizing understanding over immediate foreclosure.
Streamlined Processes
By bypassing the complicated USDA application process with its own simplified system, Mazaska has improved the lending experience for its clients. Steel noted the bureaucratic hurdles in conventional lending often create barriers for borrowers seeking assistance.
Future of Native Housing Finance
As momentum grows in Washington, the Native CDFI Network continues advocating for permanent funding and extensions of successful programs. Upton points out that expanding the USDA’s 502 program to include a broader array of Native CDFIs indicates a growing appetite for innovative housing finance solutions within tribal communities.
The Ripple Effect of CDFI Investment
Gregg’s research indicates that investing in Native CDFIs not only fosters community engagement but also leads to tangible results in housing finance. His studies show that CDFIs, like Four Bands, have successfully provided various mortgage products and grown their services by leveraging long-term loans from the USDA.
Conclusion
The efforts of organizations like Mazaska Owecaso Otipi Financial and legislative progress on Capitol Hill signify a new era of mortgage access for Native communities. As the USDA’s relending program continues to demonstrate its valuable impact, it serves as a compelling case study for the transformative potential of targeted support for Native CDFIs. By investing in these community-based lenders, we can empower Native borrowers and foster long-term economic stability across tribal nations.
By focusing on the cooperative relationship between community lenders and the individuals they serve, we can work towards a more equitable future in housing finance for all.
