Statement of Michael Liu
February 25, 2004
Office of Public and Indian Housing
before the Committee on Indian Affairs
Chairman, Mr. Vice Chairman, and Members of the Committee, thank
you for inviting me to provide comments on President Bush's fiscal
year 2005 budget for HUD's Indian Housing and Community Development
name is Michael Liu, and I am the Assistant Secretary for Public
and Indian Housing. I am responsible for the management, operation
and oversight of HUD's Native American programs. These programs
are available to over 562 federally-recognized Indian tribes. We
serve these tribes directly, or through their tribally designated
housing entities (TDHE), by providing grants and loan guarantees
designed to support affordable housing, community and economic development
activities. Our partners are diverse; they are located on Indian
reservations, in Alaska Native Villages, in other traditional Indian
areas, and most recently, on the Hawaiian Home Lands.
In addition to those duties, my jurisdiction encompasses the public
housing program, which aids the nation's 3,000-plus public housing
agencies in providing housing and housing-related assistance to
is a pleasure to again appear before you, and I would like to express
my appreciation for your continuing efforts to improve the housing
conditions of American Indian, Alaska Native and Native Hawaiian
peoples. From HUD's perspective, much progress is being made. Tribes
are taking advantage of new opportunities to improve the housing
conditions of the Native American families residing on Indian reservations,
on trust or restricted Indian lands and in Alaska Native Villages.
This momentum needs to be sustained as we continue to work together
toward creating a better living environment for these groups.
the outset, let me reaffirm the Department of Housing and Urban
Development's support for the principle of government-to-government
relations with federally-recognized Indian tribes. HUD is committed
to honoring this fundamental precept in our work with American Indians
and Alaska Natives.
may recall that when I testified before you two years ago, I emphasized
that there appeared to be a backlog of funding not obligated or
expended by tribes. My statement caused a bit of a stir, and I received
many calls from tribal leaders challenging this assertion. As it
turns out, we were both right. There were more funds in the pipeline,
but there was not nearly as much as we first estimated. This occurred
because of the delays inherent in reporting requirements and the
absence of a centralized system to collect this data. Tribal leaders
and the National American Indian Housing Council assisted our regional
Offices of Native American Programs in updating the data, we entered
it into our system, and I am now confident that the majority of
tribes are obligating and spending their grants in an expeditious
manner. Our most recent reports, which are tracked and recorded
by the Department's electronic Line of Credit Control System, show
that 88 percent of all grant funds appropriated have been obligated
begin my presentation by going over the budget numbers, and then
I'd like to discuss two issues that I believe are of interest to
the Committee: the large credit authority balances in our loan funds
and my concerns about them, and the recently completed formula allocation
For FY 2005, the President's budget proposes a total of $739 million
dollars, specifically for Native American and Native Hawaiian housing
in HUD. There is $647 million authorized under the Native American
Housing Assistance and Self-Determination Acts (NAHASDA). Of that
amount, approximately $640 million is for direct, formula allocations
through the Indian Housing Block Grant Program. $1.85 million in
credit subsidy, which will leverage $17.9 million in loan guarantee
authority, is proposed for NAHASDA's Title VI Tribal Housing Activities
Loan Guarantee Fund. $71.575 million is for grants under the Indian
Community Development Block Grant Program, and $1 million in credit
subsidy, which will provide $29 million in loan guarantee authority,
is for the Section 184 Indian Housing Loan Guarantee Fund.
Native Hawaiian community will receive, through the Department of
Hawaiian Home Lands, $9.5 million for the Native Hawaiian Housing
Block Grant Program, and $1 million for the Section 184A Native
Hawaiian Home Loan Guarantee Fund, which will leverage approximately
$37.4 million in loan guarantees.
is a total of $5.4 million available for training and technical
assistance to support these programs.
the Department requests a total of $6.5 million to support American
Indian, Alaska Native and Native Hawaiian-oriented higher education
INDIAN HOUSING BLOCK GRANT PROGRAM (IHBG)
within the Indian Housing Block Grant (IHBG) program account have
been made to allow more funds to be available for direct tribal
use. The FY 2005 budget includes $647 million for the IHBG program.
As with last year's request, reducing set-asides results in an increase
in IHBG grant dollars available to tribes. For example, last year
there was $2.72 million set aside for the Working Capital Fund.
This year, we are requesting that only $500,000 be put aside for
TRAINING AND TECHNICAL ASSISTANCE
and Technical Assistance remains a critical component of the IHBG
program. The Training and Technical Assistance set-aside is $5 million,
which has provided the initial training and technical assistance
to most grantees, enabling them to function effectively under NAHASDA.
TRAINING AND TECHNICAL ASSISTANCE
President's Budget includes a $2.485 million set-aside from the
Community Development Fund to continue the support provided to the
National American Indian Housing Council. No funds are provided
under the IHBG training and technical assistance set-aside, as the
Department believes that sufficient funding is provided through
Department's request of $500 thousand for the Working Capital Fund
will help provide information technology and data resources to support
enhanced program assessments, performance measurements and accountability.
VI TRIBAL HOUSING ACTIVITIES LOAN GUARANTEE FUND
Title VI Tribal Housing Activities Loan Guarantee Fund (Title VI)
is also a set-aside under the IHBG Program. The President's Budget
requests $2 million in credit subsidy to continue loan activities
at previous levels.
program's subscription rates have been somewhat lower than originally
anticipated. The current funds available will provide over $ 392
million in loan guarantee authority, which is more than the program
could use. Therefore, this budget proposes to rescind $21 million
of unused credit subsidy. However, the 2005 request will support
$17.9 million in loan guarantee authority, which will be sufficient
to cover future program needs.
184 INDIAN HOUSING LOAN GUARANTEE FUND
President's budget request for this program is $1 million. Each
year, as required by the Credit Reform Act, the Section 184 Indian
Housing Loan Guarantee Fund credit subsidy rate is re-calculated.
The program's subscription rates have been somewhat lower than originally
anticipated. The current funds available will support over $811
million in loan guarantee authority, which is more than the program
could use. Therefore, this budget proposes to rescind $33 million
of unused credit subsidy. However, the 2005 request of $1 million
in credit subsidy will support $29 million in loan guarantee authority,
which will be sufficient to cover future program needs.
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
President's FY 2005 request for the Indian Community Development
Block Grant Program is $71.575 million.
HAWAIIAN HOUSING BLOCK GRANT PROGRAM
FY 2005, the Department is requesting $9.5 million. There is a $400
thousand dollar set aside for training and technical assistance.
This budget recognizes the unique housing needs of Native Hawaiian
families eligible to reside on the Hawaiian Home Lands, and HUD
continues to address those needs. A final regulation implementing
the NHHBG program was published in the Federal Register on November
28, 2003. This action follows promulgation of an interim rule on
June 13, 2002, which allowed us to distribute funds and operate
the program in fiscal years 2002 and 2003, while public comments
were being considered and incorporated into the final regulations.
Department of Hawaiian Home Lands (DHHL) has been an active partner;
there are numerous affordable housing activities in process at more
than 14 sites. Let me give you three examples. Waiakea 6, a project
of 40 single-family homes, will be constructed on a 21-acre site
near Hilo. $2 million of FY 2002 NHHBG funds are being used for
site and infrastructure improvements there. The Lalamilo project
uses FY 2003 NHHBG funds for site and infrastructure improvements
for 440 single-family homes on a 232-acre site in South Kohala.
Additional FY 2004 NHHBG funds are earmarked for other construction
activities at this location. A total of 320 units will be built
in Waiohuli on the island of Maui. $360,000 of NHHBG funds will
be used to provide technical assistance and subsidize the construction
costs for this phase of 17 self-help units.
184A NATIVE HAWAIIAN HOUSING LOAN GUARANTEE FUND
budget request includes $1 million for the Section 184A Native Hawaiian
Housing Loan Guarantee Fund. This program is now in its third year
of operation. Modeled after the Section 184 program, the request
will provide up to $37.4 million in loan guarantee authority to
secure market-rate mortgage loans and activities related to such
projects to eligible entities, including the DHHL, non-profit organizations
and income-eligible Native Hawaiian families who choose to reside
on the Hawaiian Home Lands.
present, including carryover funds, there is over $119 million in
credit authority available under the program. The DHHL, a State
agency, is our primary program partner. Among their other activities,
they are responsible for allocation of leasehold interests on the
Hawaiian Home Lands. Until direct-endorsement lenders are approved,
the Office of Native American Programs (ONAP) National Programs
Office will work closely with DHHL, other qualified program partners
and individual borrowers to review, underwrite and issue guarantee
certificates for all loans.
has initiated discussions with HomeStreet Bank to finance an affordable
housing project on Oahu using the Section 184A loan guarantee program.
DHHL's Land Development Division is attempting to identify and acquire
a suitable site for a subdivision of 20 to 40 single-family homes.
Fannie Mae has indicated a willingness to purchase the loan from
HomeStreet Bank upon completion.
HAWAIIAN PROGRAMS SPECIALIST
I'd also like to update you on the search for the Native Hawaiian
programs specialist to be stationed in Honolulu. When we first advertised
for the position, I received a number of resumes from people with
good experience, but not the specific experience I want for this
critical position. I asked my administrative office to re-advertise
the position with different critical selection criteria, which they
did, but again we did not receive a pool of highly qualified candidates
with the appropriate experience. Then we had a hiring freeze, which
has been lifted.
the next two weeks we will have this position posted on the Office
of Personnel Management's website. I expect to see a number of highly
qualified candidates respond. We will act quickly to fill this job.
COLLEGES AND UNIVERSITIES AND ALASKA NATIVE AND NATIVE HAWAIIAN
President's budget request for HUD includes, under the Community
Development Fund, $3.0 million for competitive grants to tribal
colleges and universities to provide resources to build, expand,
renovate and equip their facilities, and $3.5 million to assist
Alaska Native and Native Hawaiian serving institutions, as they
are defined under the Higher Education Act of 1965.
GUARANTEE FUNDS BALANCES
me draw your attention to the loan guarantee funds I mentioned.
The Section 184 Program provides a federal guarantee to mortgage
lenders to protect them if a homeowner defaults and the property
is on trust or restricted land. Indian tribes, their TDHEs and individual
Native American families are eligible borrowers, but they must qualify
under lender guidelines.
Title VI Tribal Housing Activities Loan Guarantee Fund is also overflowing.
This program is available only to IHBG grantees, and it allows them
to supplement their housing program by borrowing up to five times
their annual grant. They can pledge their future IHBG allocations
as security. Any activity eligible under NAHASDA is an eligible
activity under the Title VI program.
me focus for a moment on the rescissions in these loan programs.
The Department proposes to rescind unused credit subsidy of approximately
$54 million, which has accumulated in the funds over the past four-to-five
years. This enabled us to preserve full funding for FY 2005 at the
FY 2004 request levels in all Native American programs. The rescission
will not occur until the end of FY 2005. Any unused credit subsidy
that has been committed by that time will not be rescinded.
The ONAP is reaching out to tribes, TDHEs and the lending community
in an effort to encourage them to use these programs. I have directed
ONAP Deputy Assistant Secretary Rodger Boyd to make this his top
priority. I'd like to challenge tribal leaders and the private sector
financing community to make good use of these programs and to step
up their housing activities by thinking "outside the box" about
ways in which to utilize these funds and provide needed housing
for their people. We will do everything we can to help.
ALLOCATION NEGOTIATED RULEMAKING
January, we held our seventh and final Formula Allocation Negotiated
Rulemaking Committee meeting. The formula, which was created under
NAHASDA and fleshed out in its implementing regulations, required
revisiting and updating by this year. After extended deliberations,
the Committee brought forward over 20 proposals, and reached consensus
on about half. It was an arduous and challenging process, and I
commend all Committee members, tribal leaders and members of the
public for their dedication. After further consultation and review,
we will publish a proposed rule for public comment before the end
of this fiscal year.
Let me also state for the record that I am committed to holding
the next negotiated rulemaking as expeditiously as staffing and
let me state for the record that the President's budget request
for HUD's Indian housing, education, community and economic development
programs supports the progress being made by tribes in providing
the housing needed in their communities and throughout Indian Country.
concludes my prepared remarks. I would be happy to answer any questions
you may have.
Content Archived: June 25, 2010