Wealth-building nonprofit will soon offer mortgage lending to Native Minnesotans

When Kellie Basswood sat down in 2017 to make a list of goals she wanted to achieve over a five-year period, homeownership felt unrealistic. Basswood, an alcohol and drug counselor, did not think she was financially secure or had enough savings. Growing up on the Red Lake Reservation, she knew few homeowners, she said, and had no idea where to even start.

When a coworker told her about the Mni Sota Fund — a wealth-building nonprofit that helps Native families with financial planning and preparing to purchase a home — she was intrigued. She remembered the organization as she chipped away at other goals to pay off student debt and build up her savings.

In 2022, she and her partner, William, signed up for a course for first-time homebuyers at the nonprofit. Four months later, they closed on a split-level house in Champlin, Minn., that they share with their children and family dog.

"I wasn't sure if we were financially capable of saving up an epic amount of money, but it worked somehow," Basswood said. "I can't tell you how it worked, but it did. We were able to save up enough money to put the down payment."

Soon, in addition to offering advice and planning, the Mni Sota Fund will pair up with another nonprofit to offer mortgage loans — a key part of the homeownership process that can be intimidating for some families, said Executive Director Kit Fordham.

Minnesota has one of the largest homeownership gaps in the U.S., according to Minnesota Compass data. The chasm between white Minnesotans and Native Minnesotans is particularly vast — 77% of white households own their home, while just 44% of American Indians and 48% of people of color overall own their homes.

The Mni Sota Fund was founded in 2011, to provide assistance to aspiring Native homebuyers and entrepreneurs. So far, it has deployed $1.5 million to Native families in Minnesota. Even without lending, it has helped about 20 families buy homes in the last 3 years, and managers hope to to see that number rise as interest rates come down.

Leaders hope to close the gap by showing families that homeownership can be in reach.

"One thing that has always been sort of a hitch in our system is once we get somebody ready to close on a home, then they have to go and find their own lender somewhere else," Fordham said.

For Indigenous homebuyers, getting handed off to a bank that may not have the cultural competency to work with the community can be a challenge, he said.

Soon, the nonprofit will offer to transfer clients over to their affiliated mortgage lending company. The mortgage brokerage will be called the Mni Sota Mortgage Co., and will be funded by Fahe, a nonprofit wholesale lender. They hope to close 100 mortgage loans by the end of the year, Fordham said.

Low credit scores and high-interest debt are barriers for potential homeowners, said Kevin Harris, who recently joined the nonprofit to direct the lending program.

The group already has experience lending money. It offers personal and business loans at a fixed 4% interest rate regardless of credit score, he said, vs. the 20% or more offered by many credit card companies.

"We're institutionalized to be told that renting is the way that you need to go, that you can't handle a mortgage on your own," Harris said of people of color. "We're really trying to change that narrative and give people the roadmap."

Culturally specific mortgage products are not exclusionary, but build opportunities for those who have historically had less access to homeownership, said Shereese Turner, chief program officer of Twin Cities Habitat for Humanity. Habitat recently launched a pilot program of its own with a goal of increasing Black homeownership in the metro, she said.

"We have things in our history, like redlining or who was able to access the GI Bill, that make it very clear why we should have programs like this, because we are looking at our past and working to correct that," Turner said. "This is just one way of doing that."

Mni Sota Fund Program Director Amber Leger, who coaches clients through their finance and homeownership ambitions, reviewed Basswood's credit, took a deeper look at her spending and helped her set a reasonable savings goal. Leger was taught little about finance growing up in Indian Country, she said, so she knows firsthand how powerful it is to hear success stories from people with a similar cultural background.

The Mni Sota Fund will begin administering lending to existing clients and plans for a full launch later this year. Their next homeownership class will be held March 2.

"They really changed my life, William's life and then it'll change our kids' life ... for them to see, 'Oh yeah, my my mom and dad purchased, so I can do that too when I'm older,'" Basswood said. "It won't be so scary."