This loan fund couldn’t find affordable housing to support, so they’re building it

Ted Piccolo wants to build at least one house on the every year Colville Reservation in northeast Washington.

“Maybe we’ll do two in a year, depending on how things go,” says Piccolo, the managing director of the Northwest Native Development Fund (NNDF), a CDFI focused on providing education and financing credit to individuals and small businesses in tribal communities. “We need at least 10 new apartments in the inventory.”

NNDF is already working towards this goal. In 2019 the organization founded the Upstream Housing Initiative finance and build new houses. Earlier this year, they completed the first pilot home — a 1,500-square-foot, three-bedroom home that was then sold to a young family. NNDF plans to use the proceeds to build more homes.

“We are now looking for lots to build another to try to get new homes on the market,” says Piccolo.

In addition to the actual construction of affordable housing, the initiative also finances local builders who want to build or renovate and exchange real estate. NNDF has pledged $1 million with a goal of adding 10 to 15 new homeowners to the area who can buy homes in the $180,000 range.

The lack of available affordable housing in the area is causing a housing crisis that is preventing the area from retaining skilled workers such as teachers and nurses.

“We have the funding; We have people who qualify and pre-qualify for a home loan, but then there’s nothing,” says Piccolo.

Many of the homes available are older and require a lot of work or are prefabs, which Piccolo says many traditional homebuyer lenders won’t fund. “We want to finance prefabricated houses in a way that nobody is penalized or stigmatized,” he adds.

NNDF also helps individuals in tribal communities become homeowners through Individual Development Accounts (IDAs), where the organization pays $4 for every $1 someone saves to buy a home or start a business. To receive the funding, Piccolo said individuals must complete a free educational program that includes family budgeting for homebuyers.

“We want to give people the basic skills to buy a home and manage their budget,” he adds.

Other Personal development courses are available including Financial Literacy, Marketing, QuickBooks and Indianpreneurship to cover the basics of starting a business. Since NNDF’s official launch in 2008, the organization has had more than 600 participants in courses and workshops and has provided more than 250 loans worth more than $14.4 million. In 2021 alone, they have lent more than $3 million.

A grant is also possible business development for people in tribal communities in Washington and beyond. Piccolo says it’s hard for any small business or startup to get funding from traditional lenders, but it’s even harder for tribal businesses.

“A lot of lending institutions don’t feel comfortable trying to do business through the reservation,” he says. Many do not understand thattrust status” of reservation land, where the land is held in trust by the federal government for a tribe’s use, or how the use of property on the reservation as collateral works.

Many of the companies that NNDF has funded are in the logging and fishing industries, Piccolo says. For example, they funded a small-batch, artisanal salmon processing company that works with local fishermen in Portland, Oregon. NNDF also helped fund the development of The Bunkhouse Hotel in Jackson, Montana to boost tourism in the region. CDFI’s investment also helped a Colville descendant buy and salvage a 50-year-old auto body shop in Electric City, Washington.

consumer credit from $500 to $6,000 is another investment range. These include construction loans, employee loan to help individuals access finance without having to use a payday lender, and “anti-payday loans” to pay off existing debt and provide a one-time loan.

Through education, funding, and housing initiatives, NNDF strives to build wealthy, economically viable tribal communities. Piccolo says the organization bills itself as “the little loan fund that could” — as they’ve always believed that as long as it helps tribal communities, there’s no project too big or too complicated for them.

“It starts with saying, ‘Don’t say no. Let’s just say how,'” he says. “We think the sky is the limit of what we can do by providing funding to our community. And that’s really a driver. We are a community driver.”

This story is part of our CDFI Futures series, which examines the community development finance industry through the lenses of justice, public policy and inclusive community development. The series is generously supported by Partners for the Common Good. Subscribe to PCG’s CapNexus newsletter at capnexus.org.