Tribal program overcomes common home ownership barriers
SHAWNEE, Okla. – The Citizen Potawatomi Nation (CPN) launched its lease-to-own program with a singular goal in mind: equip its members for home ownership.
“Home ownership is a crucial way families can build generational wealth,” said CPN Housing Department Director Scott George. “We recognized common barriers for our members to home ownership and launched a program in 2020 to help them overcome those obstacles."
George said the typical barriers to home ownership include access to a starter home, low credit and difficulty saving for a down payment.
To combat the starter home shortage, the Tribe constructed energy-efficient homes valued around $150,000-$160,000. Tribal members were invited to apply for the lease-to-own program, and if approved, moved into one of the homes with the understanding they could purchase the house in three years if they met certain requirements.
One such requirement was to repair low credit scores. Participants commit to reducing their debt and not incurring new debt during the program.
“Banks typically don’t approve a mortgage loan unless an applicant’s credit score is at least 625-645,” said George. “When people join our program, their credit scores average 400-500, and it takes roughly three years to repair their credit to the approved range. We require them to repair their credit so it’s easier for them to get a mortgage loan later.”
The final common barrier to home ownership is often saving for a down payment. The Tribe charges the program participants monthly rent, then applies the paid rent — dollar for dollar — to the appraised value of the home at the end of the three years, reducing the overall selling price of the home.
When program participants apply for a mortgage loan with Sovereign Bank, the largest Tribally owned bank in the nation and owned and operated by CPN, they have a reduced loan amount, repaired credit and years of positive rental history demonstrating ownership readiness.
“This approach sets up our people for success as homeowners,” said George. “Because we don’t heavily subsidize housing, they are prepared for the routine upkeep and maintenance of a home and can pay the taxes on the property while enjoying repaired credit.”
The Tribe also provides constant financial and homebuyer education, further preparing participants for the responsibility of home ownership.
To date, four out of five participants purchased their home at the end of the three years.
“Watching people get into their first home is rewarding,” said George, who has worked in the CPN Housing Department for 30 years. “All it takes is one person to change the trajectory of a family forever.”
George added that because participants can see literally see the investment in their future and the reward, they are more motivated to care for the property as a renter and meet the program requirements.
While no homes are currently available for the lease-to-own program, the Tribe is actively looking to purchase homes and build its applicant pool. To learn more, visit potawatomi.org/housing.
