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The Higher Price of Mortgage Financing for Native Americans

CICD Working Paper 2019-06 | Published September 27, 2019

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Authors

Laura Cattaneo CICD Research Assistant

The Higher Price of Mortgage Financing for Native Americans

Abstract

Affordable access to capital and quality housing is a challenge facing Native Americans. In this paper, we demonstrate that mortgage loans with Native Americans as the primary borrower are systematically more likely to be higher-priced. These loans have an average interest rate nearly 2 percentage points above the average loan for non-Native Americans. We also demonstrate that these higher-priced home loans are predominately found on reservation lands and that manufactured homes account for nearly 25 percent to 35 percent of the difference in the cost of financing. These results potentially suggest that without other institutional market reforms, promoting homeownership as a method of increasing Native American equity and assets may be less effective than for other populations.