N.D. Indians face obstacles in getting home loans

FARGO, N.D. - Willard Yellow Bird says many American Indians don't even attempt to apply for home loans.

"They're just so used to getting denied," said Yellow Bird, safety coordinator for the city of Fargo and a liaison to the city's Native American Commission.

An analysis of home loan applications for 2006 by the (Fargo) Forum newspaper found that lenders denied one out of every three applications made by American Indians in North Dakota and more than one out of every four in Minnesota.

American Indians are North Dakota's largest racial minority, accounting for 5.2 percent of the state's population in 2006, according to the U.S. Census Bureau.

They accounted for 1.1 percent of the state's home loan applications last year.

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.

The federal reporting form includes a space where lenders may list the reason for denial, but they're not required to do so. Roughly 71 percent (3,309) of the 4,643 loan applications denied last year listed a reason.

Credit history was cited as the primary reason for denial in 26 of the 59 applications where a reason was listed.

Seven applications were denied because of collateral, five because the application was incomplete, three because of debt-to-income ratio and two each because of employment history, unverifiable information and insufficient cash. Nine listed "other" reasons, and 67 gave no reason.

Phillip Lewis, accounting manager for the Spirit Lake Housing Corp., on the Spirit Lake Indian Reservation in east-central North Dakota, said tribal members face the same obstacles with credit scores and debt-to-income ratio as those of other races.

"You really hope and believe that those are the criteria by which things are handled," he said.

Ramsey National Bank in Devils Lake, just north of the reservation, reviews loan applications on an individual basis and uses the same criteria, regardless of whether the applicant lives on or off the reservation, said Amy Heilman, the bank's marketing officer.