Lacking access to mortgages, Shinnecock Nation struggles to fund home repairs
Linee Matthews, Shinnecock's assistant housing director, said there are "no options for mortgage loans" on the land. Credit: Newsday/Steve Pfost
In the Shinnecock Indian Nation, accessing a loan to pay for a new home or to fund a major renovation is a lengthier, more complicated process than on the rest of Long Island.
That’s because Shinnecock territory is restricted fee land, meaning it is held by the tribal nation and allotted to its members but cannot be sold without federal approval. It cannot be mortgaged, foreclosed or sold to non-tribal members and there are restrictions around how it may be transferred, said Linee Matthews the tribal nation’s assistant housing director.
"There’s no option for mortgage loans," she said.
There are about 1,600 enrolled tribal members, about half of whom live on Shinnecock territory, which borders the Town of Southampton.
Access to financing is critical for Shinnecock tribal members to fund home repairs and home purchases. The nation's residents have not been able to tap into housing wealth in the same ways as other Long Islanders because the eligible buyer pool is extremely limited, said Phillip Brown, Shinnecock housing director. He said houses often change hands among tribal members for $30,000 to $60,000.
That lack of housing wealth among Shinnecock people, who have lived on Long Island for thousands of years, contributes to a poverty rate, at 20.6%, that is nearly three times as high as the rate of Suffolk County as a whole, at 6.8%, according to U.S. Census data. Recently, the nation has clashed with New York State and Southampton Town over economic development efforts including digital billboards along Sunrise Highway and a proposed gas station on the nation's Westwoods property in Hampton Bays.
Matthews and Brown hope to improve access to home loans this year. The Shinnecock Housing Department is working to qualify tribal members for several federal loan programs offered by the U.S. Departments of Agriculture, Housing and Urban Development and Veterans Affairs.
For tribal members to qualify, the nation must get a land determination from the U.S. Department of the Interior on the Shinnecock Nation's ownership of the 900-acre Shinnecock Neck, which will allow a private surveyor to complete a land survey. In January, it received such a determination for the 80-acre Westwoods area.
The housing department plans to apply for federal approval by September, Matthews said. Then the tribal nation must create and approve policies that will satisfy lenders on how it will handle situations in which a member can't pay their government-backed mortgage.
Federal research has documented how administrative barriers, such as restrictions on land and difficulty accessing title records, pose major barriers to mortgage lending on tribal territories.
One area of progress has been the creation of Native Community Development Financial Institutions, or CDFIs, said Nancy Pindus, a senior fellow at the Washington D.C.-based Urban Institute, who coauthored a landmark 2017 report on mortgage lending in native territories.
Those financial institutions, created to make loans in native communities, don’t have the same aversion to lending in tribal territories as some other lenders, Pindus said.
"It’s a growing industry, and I think it’s got a lot of promise," Pindus said.
There are more than 65 native CDFIs across the U.S. but few on the East Coast, according to the Nebraska-based trade group Native CDFI Network. The closest to Long Island, and only New York native CDFI, is the Seneca Nation of Indians Economic Development Co. in upstate Salamanca. Borrowing is mostly restricted to Seneca tribal members.
If the Shinnecock Nation gets federal approval that would enable mortgage lending, tribal members who qualify for loans may still have trouble finding a lender.
HUD’s Section 184 Indian Home Loan Guarantee program offers options to moderate income borrowers but closing a loan can take up to two years, said Jamie Bay, director of the Saint Regis Mohawk Tribe’s home improvement program in Akwesasne, New York, near the Canadian border.
He worries tribal members won’t be able to find loans to buy houses the Saint Regis Mohawk Tribe plans to build. Bay has been speaking with tribal nations across the Northeast, including the Shinnecock, about strengthening relationships with lenders.
"We don’t want people going through two years of a process [with] a home just sitting there," Bay said. "That doesn’t make sense."
For the Shinnecock, getting federal approval for USDA, HUD and veterans loans is an important step in improving the housing stock in the nation, Matthews said.
"That would open up so much," Matthews said. "It would open up the doors for new construction and [home] rehabilitation."
In the Shinnecock Indian Nation, accessing a loan to pay for a new home or to fund a major renovation is a lengthier, more complicated process than on the rest of Long Island.
That’s because Shinnecock territory is restricted fee land, meaning it is held by the tribal nation and allotted to its members but cannot be sold without federal approval. It cannot be mortgaged, foreclosed or sold to non-tribal members and there are restrictions around how it may be transferred, said Linee Matthews the tribal nation’s assistant housing director.
"There’s no option for mortgage loans," she said.
There are about 1,600 enrolled tribal members, about half of whom live on Shinnecock territory, which borders the Town of Southampton.
Access to financing is critical for Shinnecock tribal members to fund home repairs and home purchases. The nation's residents have not been able to tap into housing wealth in the same ways as other Long Islanders because the eligible buyer pool is extremely limited, said Phillip Brown, Shinnecock housing director. He said houses often change hands among tribal members for $30,000 to $60,000.
That lack of housing wealth among Shinnecock people, who have lived on Long Island for thousands of years, contributes to a poverty rate, at 20.6%, that is nearly three times as high as the rate of Suffolk County as a whole, at 6.8%, according to U.S. Census data. Recently, the nation has clashed with New York State and Southampton Town over economic development efforts including digital billboards along Sunrise Highway and a proposed gas station on the nation's Westwoods property in Hampton Bays.
Matthews and Brown hope to improve access to home loans this year. The Shinnecock Housing Department is working to qualify tribal members for several federal loan programs offered by the U.S. Departments of Agriculture, Housing and Urban Development and Veterans Affairs.
For tribal members to qualify, the nation must get a land determination from the U.S. Department of the Interior on the Shinnecock Nation's ownership of the 900-acre Shinnecock Neck, which will allow a private surveyor to complete a land survey. In January, it received such a determination for the 80-acre Westwoods area.
The housing department plans to apply for federal approval by September, Matthews said. Then the tribal nation must create and approve policies that will satisfy lenders on how it will handle situations in which a member can't pay their government-backed mortgage.
Federal research has documented how administrative barriers, such as restrictions on land and difficulty accessing title records, pose major barriers to mortgage lending on tribal territories.
One area of progress has been the creation of Native Community Development Financial Institutions, or CDFIs, said Nancy Pindus, a senior fellow at the Washington D.C.-based Urban Institute, who coauthored a landmark 2017 report on mortgage lending in native territories.
Those financial institutions, created to make loans in native communities, don’t have the same aversion to lending in tribal territories as some other lenders, Pindus said.
"It’s a growing industry, and I think it’s got a lot of promise," Pindus said.
There are more than 65 native CDFIs across the U.S. but few on the East Coast, according to the Nebraska-based trade group Native CDFI Network. The closest to Long Island, and only New York native CDFI, is the Seneca Nation of Indians Economic Development Co. in upstate Salamanca. Borrowing is mostly restricted to Seneca tribal members.
Opening doors
If the Shinnecock Nation gets federal approval that would enable mortgage lending, tribal members who qualify for loans may still have trouble finding a lender.
HUD’s Section 184 Indian Home Loan Guarantee program offers options to moderate income borrowers but closing a loan can take up to two years, said Jamie Bay, director of the Saint Regis Mohawk Tribe’s home improvement program in Akwesasne, New York, near the Canadian border.
He worries tribal members won’t be able to find loans to buy houses the Saint Regis Mohawk Tribe plans to build. Bay has been speaking with tribal nations across the Northeast, including the Shinnecock, about strengthening relationships with lenders.
"We don’t want people going through two years of a process [with] a home just sitting there," Bay said. "That doesn’t make sense."
For the Shinnecock, getting federal approval for USDA, HUD and veterans loans is an important step in improving the housing stock in the nation, Matthews said.
"That would open up so much," Matthews said. "It would open up the doors for new construction and [home] rehabilitation."
Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.
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