Jason Richardson, Senior Director, Research, NCRC
Part 3 of this series explores the unique challenges and patterns in mortgage lending to Native American and Native Hawaiian/Pacific Islander communities. While often overlooked in broader discussions on mortgage access, these communities face distinct barriers that deserve focused attention. Their geographic concentration in specific regions, unique land ownership structures and historically complex relationships with federal policies create lending environments unlike those experienced by any other demographic group.
Building on our findings from Parts 1 and 2 about the structural shifts in mortgage lending and declining access for low- and moderate-income (LMI) borrowers, this analysis examines the specific challenges facing Native American and Native Hawaiian/Pacific Islander communities in the 2024 mortgage market.
Unlike other demographic groups, Native American and Native Hawaiian/Pacific Islander populations show pronounced geographic concentrations in their respective states. While many people’s access to mortgage capital is structurally restricted, these two small groups face distinct legal and institutional barriers to homeownership. Both communities have unique relationships with land ownership that complicate mortgage lending. Tribal trust lands for many Native American communities and specialized property regimes for Native Hawaiians on Hawaiian home lands often run counter to the mortgage system America has constructed that uses land as collateral.
Preserving these groups’ right to maintain the land practices that correspond to their cultural and religious values while also improving their access to mortgage credit is not as difficult as it may sound – as our policy recommendations at the bottom of this report show.
The analysis reveals that both Native American and Native Hawaiian/Pacific Islander communities face severe underrepresentation in mortgage lending, but through different mechanisms and challenges.
For Native Hawaiian/Pacific Islander communities, the primary barriers stem from extreme housing costs, complex land tenure systems and competition from outside investors claiming nearly one-fifth of the market. The “AAPI” label obscures the reality that while certain Asian buyer groups thrive in Hawaii’s market, capturing over one-third of all loans, Native Hawaiians receive loans at approximately one-third their population share.
For Native American communities, the challenges are more varied across states but consistently severe. No state achieves proportional lending access for Native Americans, with the best-performing state (Oklahoma) still showing massive gaps. The heavy reliance on manufactured housing creates a wealth-building trap where families purchase assets that depreciate rather than appreciate, perpetuating economic disparities across generations.
The multiracial identification data reveals that lending disparities affect Native Americans differently depending on their connection to tribal communities and geographic distribution. Primary Native American borrowers, who are more likely to live in or near tribal communities, face the most severe barriers to accessing traditional mortgage credit.
Both communities benefit from specialized federal housing programs that acknowledge their unique circumstances, but these programs face elimination or severe cuts under proposed budget changes. The loss of these programs would exacerbate already severe disparities and undermine decades of progress in expanding homeownership access.
Key Takeaways
1
Severe Underrepresentation Across All Identity Categories: No state achieves proportional lending access for Native Americans. Even Oklahoma, the best-performing state, shows a massive gap with 17.2% of the population receiving only 9.4% of loans.
2
Native Hawaiian Displacement In Their Homeland: Native Hawaiians receive only 3.9% of home purchase loans in Hawaii despite comprising 10.8% of the population, while Asian buyer groups capture 34.2% of the market.
3
Manufactured Housing Dependency Limits Wealth Building: Native Americans rely on manufactured homes at extreme rates. These depreciating residences account for 23.5% of loans to Native Americans in New Mexico and 13.4% in Arizona, compared to under 8% of all mortgages to non-Native borrowers.
4
Investment Pressure In Hawaii: Investment and second-home buyers claim 18.9% of Hawaii’s housing market, which is twice the mainland rate.
Native Hawaiian and Pacific Islander Communities
Market Overview
Native Hawaiians are overwhelmingly concentrated in Hawaii, with approximately 157,445 individuals identifying as Native Hawaiian or Pacific Islander (HoPI) in the state, representing 10.8% of Hawaii’s total population. This makes Hawaii unique when it comes to mortgage lending as nearly all census tracts in Hawaii (over 95%) are classified as majority-minority census tracts.
Data Improvements and Subgroup Analysis
HMDA reporting allows us to disaggregate overall HoPI data into the multiple ethnicities that category encompasses, which allows for a more nuanced analysis of specific Pacific Islander groups. From 2018 to 2024, the percentage of HoPI borrowers providing detailed ethnicity information increased substantially from 46.7% to 74.0%, a change of 27.3 percentage points.
Among HoPI borrowers who provided detailed ethnicity information in 2024,Pacific Islanders categorized as Other represented the largest subgroup (44.1%), followed by Native Hawaiians (25.5%), Guamanian or Chamorro borrowers (16.6%) and Samoans (13.8%).
The share of specifically Native Hawaiian borrowers decreased slightly from 27.8% in 2018 to 25.5% in 2024, while Guamanian (or Chamorro) representation increased from 12.8% to 16.6%.
Hawaii's Housing Market: Pandemic Boom and Investor Competition
Hawaii’s home purchase market experienced significant volatility around the pandemic, with total lending peaking at 14,879 loans in 2021 before cooling to 7,238 loans by 2024. This represents a substantial contraction as higher interest rates reduced buying power across all groups.
Maui in particular was also savaged by wildfires in 2023, uprooting huge numbers of families and upending traditional market dynamics, with effects not yet quantifiable through HMDA data.
Throughout this period, investment and second-home buying has remained elevated. In 2024, 18.9% of home purchases were for investment properties or second homes rather than primary residences. This share peaked at 23.0% during the 2021 pandemic boom and has consistently stayed above pre-pandemic levels.
Hawaii vs. Mainland: An Investment Hotspot
Hawaii’s investment property market operates unlike the rest of America. In 2024, investment and second home purchases made up 18.9% of Hawaii’s market compared to just 9.0% on the mainland. This gap has been consistent throughout the 2018-2024 period, with Hawaii maintaining roughly double the investment share of the mainland. Given that this data only identifies investors that use mortgages to fund their purchase and not cash buyers, it likely undercounts the role of investors in the market.
The difference peaked in 2021 at 14.0 percentage points, meaning local Hawaiian families compete in a market where outside investors and second-home buyers consistently claim about one-fifth of available housing.
Breaking Down "AAPI": Different Groups, Different Impacts
The “Asian American and Pacific Islander” (AAPI) label commonly used in housing discussions obscures important patterns in Hawaii’s market. When disaggregated, Asian buyer groups and Native Hawaiian/Pacific Islander buyers show fundamentally different market participation.
Filipino buyers received 14.5% of all home purchase loans in 2024, ahead of Chinese (10.3%) and Japanese (9.4%) buyers. These three Asian groups combined captured 34.2% of Hawaii’s entire home purchase market.
Native Hawaiian buyers received just 3.9% of home purchase loans despite representing 10.8% of Hawaii’s population. This means Native Hawaiians receive loans at approximately one-third their population share.
The “AAPI” label masks this disparity. Grouping Asian and Pacific Islander buyers under one umbrella suggests unified success in Hawaii’s housing market, when in reality specific Asian buyer groups are expanding their market presence while Native Hawaiian buyers remain severely underrepresented.
Investment Property: Who's Buying Hawaii as an Asset
Investment property patterns reveal different approaches to Hawaii’s housing market across groups.
Chinese buyers used 22.8% of their home purchases for investment properties in 2024, down from 30.6% in 2022 but still representing the highest rate among major groups. Japanese buyers also retreated from buy-to-lease purchases in the state, with their investment rate dropping from 20.1% in 2018 to 13.3% in 2024.
Filipino buyers focus primarily on owner-occupied homes, with only 9.0% of their purchases for investment properties. Native Hawaiian investment buying increased from 5.7% in 2018 to 11.7% in 2024 – but bought just 33 investment properties, compared to 170 for Chinese buyers.
Native Hawaiian/Pacific Islander Lending Patterns
Native Hawaiian/Pacific Islanders comprised 10.8% of Hawaii’s population, but received only 3.9% of home purchase loans in 2024 (282 total home purchase loans).
HoPI borrowers took out mortgages almost exclusively on site-built homes, unlike mainland Native populations. HoPI borrowers in Hawaii show large participation in site-built home lending that generally builds family wealth over time, with 99.8% of home purchase loans being for site-built properties rather than manufactured homes that depreciate in value.96.6% of HoPI home purchase loans were in majority-minority census tracts, reflecting Hawaii’s overall demographic makeup.
8.0% of HoPI home purchase loans went to LMI borrowers, compared to 7.1% for all other borrowers in Hawaii.
Barriers Specific to Native Hawaiian/Pacific Islander Communities
Native Hawaiian/Pacific Islander communities face a distinct set of barriers that affect their homeownership opportunities. Limited space for housing, high levels of tourism and extreme prices all plague Hawaii’s housing market. These prices create substantial affordability barriers for even middle-income borrowers, limiting the market to those with significant wealth or additional, disposable income sources.
There are also unique land use restrictions tied to Hawaiian home lands and other specialized property regimes, further complicating the state’s housing market. These programs, while designed to preserve Native Hawaiians’ access to land, create title and property rights challenges that many traditional lenders are ill-equipped to navigate. The complexity of these situations often requires specialized lending expertise that is not widely available in the conventional mortgage market.
Competition from non-resident investors creates additional pressure on Hawaii’s limited housing market. The desirability of Hawaiian real estate for vacation property development and other real estate investment opportunities means that Native Hawaiian/Pacific Islander communities must compete with cash buyers and wealthy investors from the mainland for stable housing opportunities. This intensifies affordability challenges in an already supply-constrained market, pushing homeownership further out of reach for many Native Hawaiian/Pacific Islander families.
Specialized Housing Programs Under Threat
Native Hawaiian/Pacific Islander communities benefit from specialized housing programs designed to address their unique circumstances. These programs now face significant threats due to proposed federal budget cuts.
For Native Hawaiians, the following key programs are under threat of elimination:
Section 184A Native Hawaiian Housing Loan Guarantee program: Created by the Hawaiian Homelands Homeownership Act of 2000 and authorized by the US Department of Housing and Urban Development (HUD), the Section 184A program offers loan guarantees for eligible Native Hawaiian individuals and families seeking homeownership on their Hawaiian home lands. It provides a 100% guarantee on unpaid principal and interest, but is limited to owner-occupant, single-family dwellings on Hawaiian home lands, which total roughly 200,000 acres, or about 5% of the state’s total land.
Section 247 Mortgage Insurance for Hawaiian Home Lands program: Under the National Housing Act, this program authorizes Federal Housing Authority (FHA) mortgage insurance packages for Native Hawaiian lenders purchasing one- to four-family dwellings on Hawaiian home lands, helping to minimize lender risk and increase mortgage credit availability.
The Office of Hawaiian Affairs’ Access to Home Ownership (AHO) program: Launched in February 2025, this innovative mortgage-backed program uses $1.5 million per year to guarantee portions of home loans financed by the American Savings Bank, effectively eliminating monthly mortgage insurance premiums for eligible Native Hawaiian first-time homebuyers.
These specialized programs are particularly crucial given the extreme housing costs in Hawaii, where median home prices exceed $830,000. However, as of May 2025, the current administration’s “skinny” budget foreshadows a possible elimination of the Native Hawaiian Housing Block Grant program, as well as major cuts to other HUD housing programs.
Policy Solutions for Native Hawaiian/Pacific Islander Communities
Protect specialized loan programs: Congress should maintain funding for both the Section 184A Native Hawaiian Housing Loan Guarantee and Section 247 Mortgage Insurance for Hawaiian Home Lands programs, and expand the Office of Hawaiian Affairs’ Access to Home Ownership program to serve more borrowers.
Address investor competition: Lawmakers should implement policies to limit speculative investment in Hawaii’s housing market, such as transfer taxes on non-resident purchases or restrictions on short-term rentals that remove housing from the long-term market.
Improve data collection: Regulators should enhance data collection mechanisms to further distinguish between Native Hawaiian borrowers and other Pacific Islander groups to better address the unique needs of each community.
Support affordable housing development: Lawmakers and private-sector actors should increase funding for affordable housing development specifically targeted to Native Hawaiian/Pacific Islander families, with preference systems that prioritize indigenous residents.
Native American Communities
Market Overview and Geographic Distribution
The five states with the largest Native American populations were California (649,862), Oklahoma (332,791), Arizona (319,512), Texas (278,948) and New Mexico (212,241). When measured by their percentage of a state’s population, Native Americans represent substantial population shares in New Mexico (10.0%), Oklahoma (8.4%) and Arizona (4.5%).
This unique geographic concentration of Native communities means that data on a national level often masks important regional lending patterns that have outsized impacts on these communities specifically.
Understanding Multiracial Identity
The 2020 Census shows that nearly as many people identify as both Native American and another race as identify as Native American alone, creating significant measurement challenges when assessing lending equity.
People who identify as multiracial Native American may have vastly different relationships to tribal communities, ranging from enrolled tribal members with mixed heritage to individuals with distant or uncertain Native ancestry who are exploring their family history. The geographic distribution of multiracial Native American borrowers also tends to differ from those who identify solely as Native American. Multiracial borrowers are often more dispersed across urban and suburban areas, potentially giving them better access to traditional banking services and conventional mortgage products, while primarily-Native American borrowers may be more concentrated in tribal areas or rural communities with limited financial infrastructure. (For more on those issues of access to financial services in Native American communities in the southwestern US, see our 2023 report Redlining the Reservation.)
Manufactured Housing: A Key Difference
Native Americans rely on manufactured housing at more than twice the rate of other groups. In 2024, 9.2% of Native American home buyers purchased manufactured homes, compared to just 3.9% of Native Hawaiian/Pacific Islander buyers and 4.3% of all other racial groups combined.
This difference matters because manufactured homes typically cost less upfront but may not build wealth the same way traditional homes do. The high reliance on manufactured housing suggests Native Americans face different affordability challenges or have fewer options for traditional site-built homes.
State-by-State Analysis
New Mexico: Extreme Disparities Across All Categories New Mexico has the highest concentration of Native Americans and shows the most severe lending disparities. Primary Native American borrowers represent 10.0% of the state’s population but received only 2.5% of loans. Multiracial Native American borrowers, comprising 2.4% of the population, received 1.0% of loans.Even when combining both groups, Native Americans received less than one-third of their proportional share of loans.
The manufactured housing reliance among primary Native American borrowers is extreme, with nearly one in four loans (23.5%) going toward manufactured homes compared to less than 8% for non-Native borrowers.
Oklahoma: Best Performance Still Falls Short Oklahoma demonstrates the most equitable access patterns among the five states, but still shows significant gaps. Primary Native American borrowers, representing 8.4% of the population, received 8.8% of loans, achieving near-proportional access. However, multiracial Native American borrowers are severely underrepresented, comprising 8.8% of the population but receiving only 0.6% of loans.
The manufactured housing dependency among primary Native American borrowers is the lowest of all five states at 8.8%, indicating better access to traditional site-built home financing.
Arizona: Consistent Underrepresentation Arizona shows significant underrepresentation across both identity categories. Primary Native American borrowers, representing 4.5% of the population, received only 0.8% of loans. Multiracial Native American borrowers, comprising 2.1% of the population, received 0.6% of loans.
Manufactured housing dependency remains high among primary Native American borrowers at 13.4%, reflecting ongoing barriers to accessing traditional site-built home financing.
California: The Multiracial Reversal California presents the most striking example of how multiracial identification affects lending patterns. Primary Native American borrowers, representing 1.6% of the population, received only 0.5% of loans. Multiracial Native Americans are another 1.7% of Californians but also got just 0.5% of loans. In either case they are finding far less success in the housing market than they should given their share of the residents of California. When looking at absolute numbers, multiracial borrowers actually received more site-built loans (10,381) than primary Native American borrowers (8,308), despite representing similar population shares.
Texas: Similar Multiracial Advantage Texas demonstrates a pattern similar to California, where Native Americans (both Native Alone or in combination with other races) represent 2.5% of Texans but receive just 1% of home loans.
The Manufactured Housing Factor and Wealth Building
Across all states, the heavy reliance on manufactured housing among Native American borrowers represents a critical barrier to wealth building. This dependency stems from two main factors: land tenure issues and cost barriers.
Much tribal land is held in trust by the federal government, making it difficult to use as collateral for traditional mortgages. Manufactured homes require less complex financing arrangements and can be more readily placed on trust land without navigating the complex federal approval processes required for site-built homes.
However, this creates a significant wealth-building problem. Manufactured homes typically depreciate in value over time, unlike site-built homes that generally appreciate. This means Native American families are often using their limited resources to purchase assets that lose value rather than build generational wealth, perpetuating economic disparities across generations.
Barriers Specific to Native American Communities
The lending patterns observed in our analysis point to deeply rooted economic and institutional barriers that shape access to mortgage credit for Native American communities. At the foundation of these challenges lies a profound wealth disparity: Native Americans have a median wealth of just $5,700, with the national income average being $65,000. This wealth gap creates fundamental barriers to mortgage qualification, making it difficult to meet down payment requirements and minimum income thresholds.
This wealth disparity is compounded by severe banking infrastructure gaps in tribal communities. Our 2023 Redlining the Reservation report found that none of the three largest US home lenders issued federally guaranteed mortgages for constructing new permanent homes on tribal lands. Between 2018 and 2021, tribal lands in Arizona received just 0.004% of small business loan dollars originating in the state, while tribal lands in New Mexico received only 0.012%. This is clear evidence of a broader financial services desert that extends beyond housing.
The unique legal structure of trust land creates additional complications for aspiring homeowners. Tribal lands held in trust by the federal government cannot be used as conventional collateral, creating significant barriers to traditional mortgage lending. Without access to conventional financing options, many Native borrowers are pushed toward manufactured homes via personal property loans rather than traditional mortgages. These loans typically carry higher interest rates, shorter loan terms and fewer consumer protections than standard mortgages, limiting their long-term wealth-building potential.
Geographic isolation further exacerbates these challenges. In states like New Mexico and Arizona, tribal lands are often located in remote areas far away from financial centers. This physical distance creates practical barriers to accessing financial services and mortgage products, such as access to in-person banking services, home appraisers and other professionals essential to the mortgage process.
Specialized Housing Programs Under Threat
Native American communities benefit from specialized housing programs designed to address their unique circumstances. These programs now face significant threats due to proposed federal budget cuts.
For Native Americans, the Section 184 Indian Home Loan Guarantee Program has been a pathway to homeownership for years. Similarly, the Indian Housing Block Grant (IHBG) program, which would absorb the competitive IHBG program under the proposed budget, has been essential for housing development on tribal lands. These programs acknowledge the unique legal status of tribal trust lands, which can often present significant barriers to traditional mortgage lending.
The May 2025 “skinny” budget proposal would dramatically restructure these programs if approved, causing a 43% overall reduction to HUD rental assistance programs by block granting them to states. The IHBG-Competitive program would also be in danger of elimination if the proposed $479 million reduction in funding takes place. Such changes would severely undermine the sovereignty of tribal housing authorities and restrict access to the already limited affordable housing options in Native communities.
Policy Solutions for Native American Communities
Enhance specialized loan programs:
- Federal lawmakers should strengthen the Section 184 Indian Home Loan Guarantee Program with expanded funding, more streamlined processes and additional education efforts toward creating greater lender participation.
- Regulators and lenders should reform manufactured home financing to treat these homes more like traditional mortgages, with better rates and consumer protections.
Address structural barriers:
- Policymakers should streamline trust land processes by standardizing title requirements, streamlining survey procedures and conducting environmental reviews across federal agencies.
- Regulators should expand rural banking access through targeted Community Reinvestment Act (CRA) credit and other regulatory incentives, as envisioned in the recently-withdrawn 2023 CRA rules package.
- Philanthropists and lawmakers should support Native CDFIs by increasing funding and capacity for Native Community Development Financial Institutions that are more knowledgeable of local needs.
Improve data and monitoring:
- Regulators should enhance HMDA reporting requirements to include more specific geographic identifiers for tribal lands and reservations.
- Policymakers should establish tribal consultation standards requiring regular consultation with tribal governments when developing lending policies that will impact Native communities.
Discussion
The analysis reveals that both Native American and Native Hawaiian/Pacific Islander communities face severe underrepresentation in mortgage lending, but through different mechanisms and challenges.
For Native Hawaiian/Pacific Islander communities, the primary barriers stem from extreme housing costs, complex land tenure systems and competition from outside investors claiming nearly one-fifth of the market. The “AAPI” label obscures the reality that while certain Asian buyer groups thrive in Hawaii’s market, capturing over one-third of all loans, Native Hawaiians receive loans at approximately one-third their population share.
For Native American communities, the challenges are more varied across states but consistently severe. No state achieves proportional lending access for Native Americans, with the best-performing state (Oklahoma) still showing massive gaps. The heavy reliance on manufactured housing creates a wealth-building trap where families purchase assets that depreciate rather than appreciate, perpetuating economic disparities across generations.
The multiracial identification data reveals that lending disparities affect Native Americans differently depending on their connection to tribal communities and geographic distribution. Primary Native American borrowers, who are more likely to live in or near tribal communities, face the most severe barriers to accessing traditional mortgage credit.
Both communities benefit from specialized federal housing programs that acknowledge their unique circumstances, but these programs face elimination or severe cuts under proposed budget changes. The loss of these programs would exacerbate already severe disparities and undermine decades of progress in expanding homeownership access.
The path forward requires sustained federal support for specialized lending programs, targeted efforts to address structural barriers like trust land complications and investor competition, and improved data collection that captures the distinct experiences of different indigenous communities. Without these interventions, both Native American and Native Hawaiian/Pacific Islander families will continue to face barriers to homeownership that limit their ability to build generational wealth and achieve economic stability.
Method Explanation: Identifying Detailed Race or Ethnicity
The analysis method utilized for this report series systematically reviews each Applicant Ethnicity and Applicant Race field (1 through 5) to determine whether the borrower reported a detailed racial/ethnic subgroup, such as “Mexican” or “Vietnamese,” rather than a broader racial or ethnic category, such as “Hispanic” or “Asian.” For a detailed explanation of how NCRC calculates an applicant’s race/ethnicity, please see our white paper on this topic.
The underlying logic for the model works as follows:
- It prioritizes detailed subgroup codes, which are defined as: Ethnicity codes 11–14 (e.g., Mexican, Puerto Rican, etc.) and Race codes 21–27 (Asian subgroups) and 41–44 (Pacific Islander subgroups)
- The formula checks each field in order (starting with Applicant Ethnicity 1), stopping at the first occurrence of a valid detailed code
- Once found, it returns the corresponding descriptive label (e.g., “Chinese” or “Samoan”)
- If no detailed subgroup is reported in any of the ten fields, the formula returns “NA”
This method ensures that records are accurately flagged when a borrower has provided specific identity information, supporting a deeper demographic analysis and more precise fair lending research over time.
Resources
For the complete series, including videos, interactive visualizations and localized market analysis, visit our 2025 Mortgage Market series homepage . NCRC members can request customized community data requests as well. Those interested in membership benefits should contact Ralph Cyrus (Membership Engagement Specialist) at rcyrus@ncrc.org.
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