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Challenges and Resources for First-Time, Native American Homebuyers in South Dakota

By Tanya Svoboda
February 2021

The COVID-19 lockdowns that required families to work and school from home have been especially challenging for Native Americans living on South Dakota reservations. Working and schooling from home have created cramped living conditions, especially so for those living in multi-generational homes.

As a result, many reservation residents who had not previously considered homeownership, decided it was time to purchase. During the first six months of 2020, more first-time homebuyers enrolled in home buying and financial literacy courses offered by reservation-based groups than in all of 2019, according to data collected by the South Dakota Native Homeownership Coalition.



While the desire for homeownership among Native Americans in South Dakota has increased, there are still some roadblocks. Fortunately, there are also some solid programs in place to help Native Americans fulfill the dream of homeownership.

Home Buying Challenges for Native Americans on South Dakota’s Reservations

Both individuals and communities benefit from homeownership. Studies have shown that homeowners are more committed to the safety and development of their community and that homeownership can help decrease the national wealth gap between whites and people of color.

There are three main barriers to homeownership for Native Americans in South Dakota.

  1. Limited Access to Homeownership Education

Reservation residents traditionally have limited knowledge of what’s needed to become a homeowner. Overall, these individuals have less exposure to banking and credit procedures than non-Natives.

Oglala Sioux Tribe Partnership for Housing is offering financial literacy and first-time homebuyer courses to help bridge this gap in knowledge.

  1. Low Housing Inventory

Even though reservation residents are enrolling at higher rates in home buying courses, many “graduates” find there’s nowhere to go. A nationwide housing shortage on Native American reservations is to blame.

“In a 2017 U.S. Housing and Urban Development Department report, researchers found that reservations needed at least 68,000 more housing units to reduce overcrowding and replace older, dilapidated housing stock,” Argus Leader reports.

  1. Complicated Paperwork

Since a majority of land within a reservation is held in trust, this land is managed either by the Bureau of Indian Affairs or the tribal government. Getting permission to buy or build requires burdensome paperwork and long wait times.

To gain permission, applicants may need to file up to three title status reports. Getting clearance to move forward after the reports have been filed can take months, in contrast to a typical loan which takes just 30-40 days to be approved.

Grants Help Native Americans Achieve Homeownership

Because of the absence of traditional banks and lending services near most reservations, Native Americans have turned to alternative lenders in their pursuit of homeownership.

Community Development Financial Institutions (CDFI) like Mazaska Owescaso Otipi Financial use grants and donations to provide loans to “economically empower America’s underserved and distressed communities.”

  • Mazaska Owecaso Otipi Financial of Pine Ridge:

Mazaska Owescaso Otipi Financial of Pine Ridge is an exceptional example of how CDFIs are helping Native Americans become homeowners.

This non-profit organization, most recently, has partnered with the U.S. Department of Agriculture and Rural Development (USDA) to provide low-income reservation residents with affordable home loans.

The USDA granted Mazaska $800,000 and Mazaska raised an additional $200,000. The combined funds of $1 million were used to issue eight home loans for reservation residents.

Mazaska’s loans can also be used in conjunction with the South Dakota Governor’s House program run by the state Housing Development Authority. In an attempt to address the reservation’s housing shortage crisis, the program builds and sells affordable modular homes ranging in price from $52,000-$58,000.

Federal Regulations May Speed Up Loan Process

Traditional lenders are often discouraged from developing an expertise in Indian Country lending. Financing trust land projects can be complicated, and the title processing procedure is taxing. In an effort to shorten the time it takes to process the title status report for a piece of land, tribes and the federal government have been making moves to shorten the process since 1998.

While the Center for Indian Country Development (CICD) has created a list of recommendations to improve the process, federal regulations are necessary to make the reform standardized and meaningful.

The surge of Native Americans pursuing homeownership in South Dakota is highlighting the long-standing barriers to homeownership on reservations across the country. As the desire for homeownership increases in these areas, there is hope that reform will follow to correct the housing disparity between Natives and non-Natives in America.


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