Native Home Capital offers loan products that are shaped by the needs of our clients. The standard loan products noted below are subject to change and we welcome the recommendations of tribal and other housing as well as lending industry professionals. The goal of soliciting the voice of the customer in our work is to ensure our community lending model matches the reality of the marketplace.
Native Home Capital's products are highly differentiated in the market; all products come with the expectation that some technical assistance will be provided to ensure the best capital structure for the project. We employ flexible underwriting criteria and may accept unconventional security. For example, we made a construction loan to a Tribally Designated Housing Entity (TDHE) secured only by a general obligation of the tribal government, enforceable in tribal court.
|Maximum Loan Amount:||$50,000|
|Repayment Term:||18 Months|
This product is deemed Expedient because it is secured only by the promissory note. They are priced at a set margin over our cost of capital. This loan is distinguished in the market place as other community development lenders charge excessive interest rates and use extensive restrictive covenants. This product can be closed and delivered in a timely manner (within 30 days).
The value of the product stems from the understanding that tribes are most accustomed to dealing with grant funding from the federal government which is typically structured as reimbursements notwithstanding the tribes’ ability for initial cash outlay. Through our staff’s own experiences, we have a clear understanding that contingencies, change orders, and unforeseen requirements seem to inevitably occur and therefore the need for this product is critical.
|Type 1 - Development||Type 2 - Gap Financing|
|Maximum Loan Amount:||$250,000||$1 Million|
|Repayment Term:||24 Months||60 Months|
|Origination Fee:||100 bps||100 bps|
Type I loans are for infrastructure, facilities, single or multiple family projects. It is generally but not exclusively for the pre-development phase of a project. This is a fully secured debt instrument and priced at approximately 6- 8.0% over our cost of funds. Security is generally in the form of pledges of future rents or other revenues.
The rationale for this product is that pre-development financing is especially hard for tribes to acquire since trust land cannot be pledged for security. Outside of government or foundation grants there are no consistently available, alternative providers of pre-development financing.
Type II loans are gap financing for projects where other capital has been committed. They are fully secured and priced at approximately 4% over our cost of funds. Though conventional sources may provide gap financing, few are providing consistent technical assistance and no other lender is focused exclusively on meeting development financing needs on tribal lands.
Here again, this product can be accessed with creative collateralizing in mind - e.g. a formal pledge from the tribe based on the strength of its balance sheet. Coupled with our hands-on technical assistance, the result is a unique product and support that facilitates project feasibility and completion.
|Maximum Loan Amount:||$1 Million|
|Repayment Term:||60 Months|
|Origination Fee:||100 bps|
The Mortgage Packages product is for mortgage-assistance programs (e.g., down payment assistance or soft-seconds). They are fully secured and priced at approximately 6% over our cost of funds.
The rationale for this product is that each TDHE has the best perspective on the opportunities for and barriers to home ownership for their own members. By helping TDHEs design and capitalize individualized programs, we seek to increase opportunities for more households than our staff could reach on an individual basis.