Key Bank of Washington has committed $10.5 million to make home loans on Indian reservations in the Pacific Northwest.
Under the program, KeyBank will buy $10.5 million of bonds from a state agency, which will use the proceeds to make loans to Native Americans guaranteed by the federal Department of Housing and Urban Development. The bonds will be rated Aaa by Moody's Investors Service and AAA by Standard & Poor's. It is the first Indian housing bond issue to be rated by the agencies.
KeyBank executives said the program would help overcome several roadblocks that have limited credit availability to Native Americans. These include cultural and sovereignty issues as well as problems traditionally faced by lenders in extending credit on properties where the underlying land cannot be held as collateral.