Statement before the
Senate Committee on Indian Affairs
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
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
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.
FY 1999 BUDGET PROPOSAL
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
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
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.
ACCOMPLISHMENTS OF THE DEPARTMENT
HOMEOWNERSHIP: THE NEXT GENERATION
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,
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
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.
MONITORING AND COMPLIANCE
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.
IMPLEMENTING NAHASDA: THE NEGOTIATED RULEMAKING PROCESS
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
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.
FISCAL YEAR 1999 PROPOSED FUNDING FOR NATIVE AMERICAN PROGRAMS
Indian Housing Block Grant Program: $600 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.
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
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