Living the dream

TULALIP – Nearly three decades of marriage brought many things to Thomas and Christie Gobin, but not a home owned in their names.

That’s changed now.

Thanks to the Department of Housing and Urban Development’s 184 loan guarantee program for American Indians, the Gobins finally have a home with their names on the deed – Thomas Gobin’s 1,900-square-foot, four-bedroom childhood abode on the Tulalip Indian Reservation.

“It’s where I grew up, and I didn’t want see it go to anybody but a family member when my parents moved,” Thomas Gobin said. “So we decided to buy a home. My parents had gifted the home we were living in to me. … other than that, we were renting for our whole married life.”

Michael O’Leary / The Herald Thomas Gobin and his wife purchased their first home using a federal loan program. The couple bought his childhood home, which is the first house they have owned in their 28-year marriage.

In 2003, the Gobins went to First Heritage Bank to seek a home loan. They learned about the 184 program and took the opportunity it offers. They were approved for a home loan locked in at a 5.75 percent interest rate. After four months of title research and a transfer, the deal closed in early 2004.

Gobin said the bank’s staff helped with paperwork, and the overall application process went smoothly.

“I thought we’d have to do a lot, but it went really fast,” he said. “The process is real simple.”

That’s because the program was destined to make homeownership much easier to achieve than it previously has been on tribal land, said Pam Negri, HUD’s regional public affairs officer.

“The combination of a low down payment, market rate interest and a 100 percent government guarantee to the lender, which allows more underwriting flexibility, will make it possible for more Native Americans to qualify for home loans wherever they live – on or off reservation,” Negri said.

“I think it’s a good program, especially for people just starting out,” Thomas Gobin says of a federal loan guarantee program that helps American Indians buy homes.

Historically, lenders have been reluctant to underwrite home loans for property held in trust for a tribe by the U.S. Bureau of Indian Affairs, she added. That includes reservations and the areas under the more general Indian Service Area designation.

“Lenders wouldn’t underwrite them because they didn’t hold the titles to their property, because the BIA does,” Negri said.

HUD’s 184 program dissipates the risk to lenders and brokers by offering a 100 percent government guarantee on participating loans in case of default.

“If the lender makes a loan and the buyer defaults, the lender is still paid through HUD,” said Patricia Cassady, residential loan production manager for First Heritage’s Everett branch.

First Heritage is one of 22 bank branches in the state with staff trained to guide applicants through the program, and it is the only one in Snohomish County. HUD is encouraging more lenders to participate.

First established in 1992, the program expanded last year to reach American Indians living outside tribal lands not entrusted to the BIA.

“It’s a really great loan product — by any standards,” Negri said.

In addition to making it easier for American Indians to get home loans, the program offers competitive rates and terms. Like the Gobins, borrowers will find prime-market interest rates. Other benefits include down payment requirements of as little as 1.25 percent, loan totals of up to 150 percent of FHA limits, no mortgage insurance payments and slightly more flexible debt-income limits, Negri said.

“A Native American person who would not be able to qualify for a regular loan would possibly be able to qualify for a loan under our program without resorting to subprime rates and terms,” she said.

By addressing the scarcity of lenders and potential economic disadvantages, the program hopes to close a yawning gap between rates of homeownership among American Indians and the general U.S. population.

While estimates of Indian homeownership rates vary from the 33 percent cited in a 2002 Government Accounting Office report to the 55 percent cited by the U.S. Census Bureau in 2003, both numbers are significantly below the general U.S. rate of 70 percent, Negri said.

From Thomas Gobin’s perspective, the program can only help. In his family’s case, 184 has positively affected three households. His daughter also is applying to the program, and Thomas and Christie gave the house they previously lived in to their son and daughter-in-law, Jason and Melissa Gobin.

“I think it’s a good program, especially for people just starting out,” Thomas Gobin said. “It helps out a lot of people who couldn’t buy before with the limited lenders.”