With mortgage lending to Native Americans living on reservations still slow, two lenders have stepped up their efforts in two states where they have successfully closed loans.

Norwest Mortgage said last week that it has closed mortgage loans on all nine reservations in South Dakota. First Americans Mortgage Corp., a subsidiary of AmeriResource Technologies Inc., Overland Park, Kan., said it will offer A-minus loan products to Native American home buyers in Oklahoma.

Borrowers living on trust lands have a hard time obtaining traditional financing in part because federal approval is required. Lenders are reluctant to underwrite loans when the title on the land cannot be transferred.

Norwest's program focuses on trust lands in South Dakota, while First Americans' program is designed for fee simple land, where the title of the land is held by the homeowner.

Des Moines-based Norwest has been making loans on Native American reservations in South Dakota under a Department of Housing and Urban Development loan guarantee program since 1997. That year Norwest and the Bureau of Indian Affairs established a program to streamline the loan approval process and increase homeownership of American Indians living on trust lands in Nebraska, North Dakota, and South Dakota.

Norwest closed the first mortgage loan on South Dakota tribal trust lands in early 1997. Since then it has closed 45 loans on reservations in the state. The largest concentration - 14 - was on the Rosebud reservation. Eight loans were on the Pine Ridge reservation, as part of the one-stop mortgage center initiative that President Clinton put into motion last year with the departments of Treasury and Housing to spur lending on reservations.

First Americans' initiative expands a partnership it has with PMI Mortgage Insurance Co. and Freddie Mac for making A loans on single-family properties in Oklahoma on fee simple land. The partnership is a risk-sharing agreement with four tribes that put up some capital in exchange for PMI's insuring the loans and Freddie Mac's purchasing them. Borrowers are offered a 3% down payment mortgage; they must contribute 1% toward the down payment and tribes contribute the remaining 2%.

In the new A-minus program, PMI will underwrite and insure the loans, and Staten Island Savings Bank, in that borough of New York, will keep them in portfolio. The loans will be offered to tribes already involved in the A program in Oklahoma: the Cherokee Nation, the Chickasaw Nation, the Choctaw Nation, and Citizens Potawatomi Nation, a spokesman for First Americans said.

The A-minus initiative will offer borrowers an 8% or 8.25% adjustable-rate mortgage that will be fixed for three years and become adjustable in the fourth, he added. This will provide an alternative to having "a high-digit, 10%, 11%, or 12% rate," the spokesman said.

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