HONOLULU – Native Hawaiians seeking to settle on homelands reserved for them are getting help from a group organizing banking and mortgage services to focus on this difficult and long-neglected task.
They will benefit from the expertise of former officials of Bank of America and Honolulu Mortgage and Native activists committed to reversing 80 years in which fewer than 8,000 families have been granted leases on about a tenth of the 200,000 acres of Native homelands, while 22,000 more languish on waiting lists that can stretch for decades.
Bank of America’s former senior vice president of community development Jim Wagele is executive director of non-profit Hawaiian Community Assets Inc., a community development corporation based on Wailuku on the island of Maui. Its mortgage affiliate, Hawaiian Community Lending, will be based here and headed by Carl Cunningham, former president of Honolulu Mortgage, who said he thinks he can get fully under way in just a couple of months.
After retiring from the bank in 1999, Wagele joined a community-based effort under way for nearly a decade, starting with a group called Na Poe Kokua. He is attempting to get a commercial banking charter for the Native effort from the federal government, as well as “community development financial institution (CDFI)” status that would allow it to tap the federal CDFI Fund set up to fund these kinds of firms.
Hawaiian Assets already has a technical assistance grant to help set up its mortgage effort.
Wagele said Native Hawaiians face daunting obstacles in getting onto the homelands set aside for them in 1920. They face a stiff 50 percent blood quantum. And, unlike American Indians who can obtain leases from their tribes and tow trailers onto a home site, Native Hawaiians whose lease applications finally come through must finance homes developed on the sites through the Department of Hawaiian Homelands “turnkey” programs.
If they are unable to, and 80 percent of the people on the list have incomes of 80 percent or below median area income, they lose their long-awaited turns (the average is 15 years).
Blossom Feiteira, a Native Hawaiian who has been heavily involved in the HCAI effort and chairwoman of a group representing families on the waiting list, said a Maui project that built 99 two-and four-bedroom homes had to go through 3,500 families to find 99 Native Hawaiian who could afford the homes.
On the island of Kauai, no eligible families were found for a 47-unit development, she said.
Feiteira said 60,000 people statewide would qualify for the blood quantum limit, out of about 225,000 Native Hawaiians. Although the vast majority of leases have been residential (up to one acre), there are also agricultural (up to 40 acres) and ranching leases (up to 100 acres). As with American Indian trust land, Hawaiian homelands can and have been leased to non-Native Hawaiians.
Wagele said obstacles Native Hawaiians face to get a lease include bad credit and not enough money for down payment and closing costs. His bank, which he hopes to see chartered next year, will focus on economic development through commercial lending for job creation, community development and sustaining the environment. A revolving loan fund would help finance down payment and closing costs.
Feiteira heads up a financial literacy and homeownership counseling program tailored to the Hawaiian culture from one started by First Nations Development Institute of Virginia and mortgage agency Fannie Mae. She explained it will build on the traditional concept of “Kahua Waiwai,” in which water was the basis for wealth, and thus nurtured and conserved wisely.
This will be applied to the house as a symbolic source of wealth and values, nurturing a “life approach” to financial management that includes long-term goals such as marriage, children and retirement.
Wagele said he expects to see the federal Department of Housing and Urban Development section 184 loan added to the arsenal of possible home finance for Native Hawaiians. In the past, the state Department of Hawaiian Homelands funded mortgages directly, but with limited funds. Many Native Hawaiians obtained money through the Federal Housing Authority’s section 247 guaranteed mortgage program. DHHL will guarantee all outlays on the homelands, so the federal government is not at risk.
That’s where Cunningham’s mortgage unit comes in. He said he has commitments from local institutions and Chase Manhattan Mortgage to buy loans Hawaiian Community Lending will broker for them, and he’s looking to start in the next 90 days.
Projected initial volume? One hundred eighty mortgages at an average of $100,000 each, or $18 million in finance, said Cunningham and his community lending officer Winona Kauhane, Native Hawaiian. Primarily they will be HUD 247s, but also federal Rural Development 502 loans and HUD 184s.
He said he’s also looking to do rehab and home improvement loans.
Cunningham got started in Native Hawaiian lending in 1991 and 1992, when Honolulu Mortgage did construction and permanent mortgage financing for the 272 unit “Princess Kahanu” DHHL project in the community of Nanakuli in west Oahu. But only one of every three or four applicants qualified.
Bank of America acquired Honolulu Mortgage and made a $150 million commitment to the DHHL. Cunningham left the company and put together a DHHL project of 170 units on the big island of Hawaii, as well as a 27-unit effort on Kauai. Then he began consulting work with Wagele for Hawaiian Community Assets.
Besides Native Hawaiians above the 50 percent blood quantum, Hawaiian Community lend to Native Hawaiians who have less than the required blood quantum, and for all low- and moderate-income residents of Hawaii, since focusing on just one ethnic group would open the firm to “reverse discrimination” concerns.
But Cunningham said he definitely wants to be a big mover in getting Native Hawaiians, finally, onto lands set aside for them by the U.S. Congress four generations ago.
