Home | En Español | Contact Us | A to Z 

Statement before the
Senate Committee on Indian Affairs

Washington, DC
February 25, 1998

by the Office of Public and Indian Housing
U.S. Department of Housing and Urban Development

Mr. Chairman and Members of the Committee, thank you for holding this hearing today and for the consistently strong support you and your Committee have shown for HUD's goals, priorities and legislative initiatives.

We especially want to thank you, Mr. Chairman, for your leadership as a strong advocate for Native Americans, Alaska Natives and Native Hawaiians. We appreciate your efforts in recent years to preserve funding for HUD's Native American programs in the face of proposed cutbacks. People that care about the quality of life for Native Americans are well served by your chairmanship.

I am pleased to appear before you today as the newly-appointed Deputy Assistant Secretary for Native American Programs. I am delighted to be here today to provide testimony which discusses the proposed budget for Indian housing and community development needs, and the status of the new Native American Housing Assistance and Self-Determination Act (NAHASDA) of 1996.

I look forward to working closely with you and your staff during the year on these issues, as well as on any other matters of interest to you.


The Department's proposed FY 1999 Budget for Native American programs reflects HUD's support of NAHASDA's purposes and intent: tribal independence and increased flexibility in program implementation. The Indian Housing Block Grant Program, the Indian Community Development Block Grant Program, the Section 184 Indian Housing Loan Guarantee Program, and NAHASDA's Title VI Indian Tribal Housing Activities Loan Guarantee Program combine to allow tribes to custom-design programs and activities that focus on infrastructure, planning, and cost-effective, innovative housing and community development activities to meet their communities' needs.

The President's Budget Proposal for the Indian Housing Block Grant is $600 million, the same amount contained in the FY 1998 HUD appropriations Act. We believe that amount is a reasonable funding level, given that this is the first year of operation for the new program, which became effective on October 1, 1997.

The Indian Community Development Block Grant Program is also proposed to remain level, at the FY 1998 appropriated amount of $67 million. This is another essential program that is used by tribal governments to create infrastructure, employment and other capital programs.

The Section 184 Indian Home Loan Guarantee Program proposal is $6 million, a $1 million increase from last fiscal year. That amount of budget authority will support loan guarantees of $68.9 million. This popular program provides Federal guarantees for market-rate mortgage loans made to income-eligible Native American families who wish to build or acquire a home located on an Indian reservation or on other trust or restricted land. ithout these Federal guarantees, lenders have refused to grant loans to otherwise-eligible Indian families. I will discuss the success of this program in more detail shortly.

Finally, the request for the new NAHASDA Title VI Tribal Housing Activities Loan Guarantee Program is $5 million, which will support guarantees of $43.6 million. The FY 1998 HUD Appropriations Act earmarked $5 million from the Indian Housing Block Grant; our budget proposal requests it as a separate appropriation. As NAHASDA grant funds begin to be spent by tribes, we fully expect that they will seek housing activity loan guarantees to use to jump-start new programs and enhance existing ones. These guarantees are necessary for the same reasons that e need the Section 184 Program guarantees.



Over the past several years, we have shared with you in some detail our on-going efforts to create a private sector for middle-income housing in Indian Country. I am pleased to report that what was at first only a dream, has turned into a reality. And that reality could not have occurred without the assistance of the many partners HUD has recruited for this effort. Many Native American families are now homeowners, thanks to access to the private mortgage capital that has always been available to all other qualified Americans.

Our partners include lenders such as Fannie Mae, private mortgage lenders, members of the housing industry, and our peer Federal agencies such as the Departments of Veterans Affairs, Interior, Agriculture and Health and Human Services.

For example, Fannie Mae plays a very active role in the Section 184 Program. Between 1995 and 1997, they purchased over $42 million in Native American mortgage loans, over $23 million of that in 1997 alone. They currently serve 47 tribes located throughout the United States. They also hold over $2.3 billion in mortgage loans to Native Americans living on non-trust lands, and have invested in Native American housing without any Federal guarantees through tax credits in Nebraska, and several negotiated transactions with tribes in Arizona and New Mexico. Their assistance also includes funding the development of special homebuyer training programs and homeownership counseling for Native American families living on trust lands. We would like to express our deep appreciation for these efforts, and encourage them to go forward and be even more aggressive!

The Department's Section 184 Loan Guarantee Program is equally, if not more successful. Native Americans, like all other individuals, desire the opportunity to become homeowners. In the past, there have been virtually no options to secure private financing on trust land, or on fee lands within the exterior boundaries of a reservation. The Section 184 Program, authorized by the Housing and Community Development Act of 1992 and amended by NAHASDA, is designed to eliminate this problem.

Using the appropriations we received in FY 1994, we guaranteed our first 11 loans early in FY 1995 with a principal amount of $912,294. The following year, 48 loans were guaranteed for $5,444,599. In FY 1997, due in part to an enhanced marketing and outreach program and the streamlining of loan processing procedures, we saw a tremendous increase in the program, with 166 loans guaranteed at $17,703,633. The program's success has continued during FY 1998, with 66 loans in the amount of $6,222,860 guaranteed between October 1, 1997 and February 13, 1998.

As you know, one of the President's top priorities is homeownership for working-class Americans. Under the National Homeownership Strategy initiative, the President has challenged us to increase homeownership by 8 million families by the year 2000. We would like as many of them as possible to be Native American families.

e are all aware that as Federal dollars become less available, Indian tribes, as well as state and local governments, are going to have to seek new resources and combine private financing with Federal funds to meet the needs of their people. The HUD Section 184 Loan Guarantee Program is the foundation for this effort.

The Department has also developed a number of other products to assist tribes in moving toward these goals. We have developed sample tribal foreclosure ordinances, development processing guides to help tribes build sound and durable housing, culturally relevant housing design guides, a compilation of model practices and programs, and many other useful reference materials.


The Department continues to support the Partners-in-Progress (PIP) initiative, as it recognizes the need to provide proactive technical assistance in Indian Country. Our PIP efforts have focused on improving performance by establishing effective partnerships with Indian housing authorities with known deficiencies and their Tribal sponsors. Throughout this next Fiscal Year the effort will evolve with the new program to also include the newly established Tribally Designated Housing Entities (TDHE). The PIP initiative allows the Department to balance its risk assessment results with available resources to prioritize those customers which are in the greatest need of assistance. To address identified deficiencies, the Department ill continue to utilize a proven effective combination of multi- disciplinary staff resources and consulting services. A similar blend of resources will be used in assisting newly established TDHE to create a solid foundation for administrative capacity.

The provision of intensive technical assistance to Tribes participating in PIP will continue to provide a range of results including removal from PIP designation due to resolution of deficiencies, significant improvements in performance, establishment of a foundation for performance of new TDHEs, and stabilization of issues or problems. The first three categories have in the past and are expected to continue to demonstrate the positive benefits that can be obtained from intensive technical assistance through the Department's partnership with grantees. Not all assistance will result in the immediate resolution of deficiencies. In some cases, the PIP efforts will allow the Department to stabilize the situation and gain a better insight into the specific dynamics impacting local performance problems. The benefits of these initiatives will be realized in the future once an environment of improvement and quality performance has been established.


All these efforts complement the primary activity to which we devoted much of our time during this past year; the implementation of NAHASDA and the promulgation of a proposed and final program rule.

On July 2, 1997, after a series of meetings with Indian leaders, Indian housing professionals and members of the public, the Department published a proposed rule to implement NAHASDA. NAHASDA reorganizes the system of Federal housing assistance provided to Native Americans by consolidating housing assistance programs into a single, formula block grant based on the housing needs within the Native American community and the maintenance and continued operation of the dwelling units developed with HUD funds. Grants are provided directly to Indian tribes or their tribally designated housing entities.

Prior to publication, negotiated rulemaking committee members met four times during February, March and April of 1997 at various locations in Colorado to develop the proposed rule.

The rule was developed pursuant to the special negotiated rulemaking procedures established in �106 of NAHASDA. Those procedures require Secretary Cuomo to adapt the negotiated rulemaking procedures contained in chapter 5 of title 5 of the United States Code to the unique government-to-government relationship that exists between Indian tribes and United States. It also requires the Secretary to ensure that the membership of the Committee include only representatives of the Federal Government and of geographically diverse small, medium and large Indian tribes, or their representatives.

At the first meeting, Committee members determined that approval of the rule would occur only by consensus of the entire Committee. It was also the Committee's policy to provide for public participation in the rulemaking process. All meetings ere announced in the Federal Register and were open to the public.

After publication of the proposed rule, the Committee met in August, September and then again in October to discuss public comments and resolve outstanding issues. On October 29, 1997, over 60 Indian tribal leaders from throughout Indian Country participated in a Signing Ceremony in Washington, DC, memorializing this historic accomplishment.

Key issues that were resolved during the final sessions include Indian preference provisions, environmental review procedures, conflict of interest standards, use of interest income, enforcement and compliance requirements, formula determinations and the method of distribution of formula funds each fiscal year.

It is anticipated that the final program rule will be published by the end of March. It is believed that one third of those Tribes wishing to participate in NAHASDA will submit their individual Indian Housing Plans (IHP) immediately upon publication, with the remainder submitted by July 1, 1998. The IHPs will be submitted to the appropriate Field Office, and will receive both regional and national reviews before a decision is made concerning the disposition of each IHP. We wish to thank the Committee for its understanding of the need and continued support for the provision of technical assistance funds to implement NAHASDA. These funds will allow the Department to provide appropriately for the implementation of this new housing program, including instruction to those staff members who will be involved with the IHP review and disposition process, and monitoring and compliance requirements related to the such.

Mr. Chairman, this concludes my prepared testimony. I would be pleased to answer any questions.


    Indian Housing Block Grant Program: $600 million

    Section 184 Loan Guarantee Program: $ 6 million

    Title VI Tribal Housing Activities
    Loan Guarantee Program: $ 5 million

    Indian Community Development Block
    Block Grant Program: $ 67 million

NAHASDA repealed Indian eligibility for the categorical programs authorized under the United States Housing Act of 1937, as amended, and certain similar laws, and combined them into a single, formula-based Indian Housing Block Grant (IHBG). Tribes or their Tribally Designated Housing Entities (TDHE) apply for the IHBG by submitting an Indian Housing Plan for HUD approval.

Indian families, Indian housing authorities, Indian tribes and TDHEs are eligible borrowers under the Section 184 Loan Guarantee Program.

Title VI Tribal Housing Activities Loan Guarantee Program guarantees are available, under certain conditions, for notes or other obligations issued by Indian tribes or, with tribal approval, their TDHEs.

Indian tribes respond competitively to a Notice of Funding Availability for the Indian Community Development Block Grant Program.

TDHEs are eligible to compete for the Public and Indian Housing Drug Elimination Program, and Indian tribes and TDHEs compete for Economic Development and Supportive Services funds.

The Office of Native American Programs has the direct responsibility to administer all programs mentioned above, including those where Indian tribes or TDHEs successfully compete for grant funds concurrently available to other entities.


Content Archived: January 20, 2009

FOIA Privacy Web Policies and Important Links [logo: Fair Housing and Equal Opportunity]
U.S. Department of Housing and Urban Development
451 7th Street S.W.
Washington, DC 20410
Telephone: (202) 708-1112 TTY: (202) 708-1455