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This Loan Fund Couldn’t Find Affordable Housing to Support, So They’re Building It

CDFI takes an upstream approach to boosting affordable housing and entreprenuership on Washington state’s Colville Reservation. 

By Erica Sweeney 

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

“Maybe one year we’ll do two, depending on how it goes,” says Piccolo, who’s executive director of the Northwest Native Development Fund (NNDF), a CDFI focused on providing education and funding personal and small business loans in tribal communities. “We need at least 10 new homes in the inventory.” 

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

“We're now looking for property to build another to try and get new houses into the market,” Piccolo says. 

Along with actually building affordable homes, the initiative is also financing local builders who want to build or renovate and flip properties. NNDF committed $1 million to the effort, with the goal of adding 10 to 15 new homeowners to the area who can buy homes in the $180,000 range. 

The lack of available affording homes in the region is causing a housing crisis, which is preventing the area from retaining professionals, such as teachers and nurses. 

“We've got the financing; we've got people who are qualified who go out and get pre-qualified for a home loan, but then there's nothing,” Piccolo says. 

Many of the homes available are older and need a lot of work or are manufactured homes, which Piccolo says, many traditional lenders won’t finance for homebuyers. “We want to fund manufactured housing in a way that doesn't penalize or stigmatize someone,” he adds.

NNDF also helps individuals in tribal communities become homeowners through Individual Development Accounts (IDAs), where the organization matches $4 for every $1 someone saves toward the purchase of a home or creation of a business. To receive the funding, Piccolo says individuals must complete a free educational program, which for homebuyers involves family budgeting. 

“We want to give people the basic skills on buying a home and managing their budget,” he adds. 

Other personal development courses are available, including financial literacy, marketing, QuickBooks and “Indianpreneurship” to cover the essentials for starting a business. Since NNDF officially launched in 2008, the organization has had more than 600 class and workshop attendees and provided 250-plus loans worth more than $14.4 million. In 2021 alone, they’ve lent more than $3 million. 

Funding is also available for business development for people in tribal communities in Washington and beyond. Piccolo says it’s tough for any small business or startup to get funding through traditional lenders, but it’s even harder for tribal businesses. 

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

Many of the businesses that NNDF has funded are in the logging and fishing industries, Piccolo says. For example, they funded a small-batch, handcrafted salmon processing company that works with Native fishermen in Portland, Oregon. NNDF also helped fund the development of The Bunkhouse Hotel in Jackson, Montana, to boost tourism in the area. The CDFI’s investment also helped a Colville tribal descendent purchase and save a 50-year-old autobody shop in Electric City, Washington. 

Consumer loans of $500 to $6,000 are another investment area. These include credit builder loans, employee loans to help individuals access funds without needing 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 rich, economically viable tribal communities. Piccolo says the organization refers to itself as “the little loan fund that could”—as they’ve always believed there’s no project that’s too big or too complicated for them to handle as long as it helps tribal communities. 

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

This story is part of our series, CDFI Futures, which explores the community development finance industry through the lenses of equity, public policy and inclusive community development. The series is developed in partnership with Next City.