[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]





                    IMPROVING HOUSING OPPORTUNITIES
                          FOR NATIVE AMERICANS

=======================================================================

                             FIELD HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   HOUSING AND COMMUNITY OPPORTUNITY

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 3, 2004

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 108-83


                    U.S. GOVERNMENT PRINTING OFFICE
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa                 BARNEY FRANK, Massachusetts
DOUG BEREUTER, Nebraska              PAUL E. KANJORSKI, Pennsylvania
RICHARD H. BAKER, Louisiana          MAXINE WATERS, California
SPENCER BACHUS, Alabama              CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware          LUIS V. GUTIERREZ, Illinois
PETER T. KING, New York              NYDIA M. VELAZQUEZ, New York
EDWARD R. ROYCE, California          MELVIN L. WATT, North Carolina
FRANK D. LUCAS, Oklahoma             GARY L. ACKERMAN, New York
ROBERT W. NEY, Ohio                  DARLENE HOOLEY, Oregon
SUE W. KELLY, New York, Vice Chair   JULIA CARSON, Indiana
RON PAUL, Texas                      BRAD SHERMAN, California
PAUL E. GILLMOR, Ohio                GREGORY W. MEEKS, New York
JIM RYUN, Kansas                     BARBARA LEE, California
STEVEN C. LaTOURETTE, Ohio           JAY INSLEE, Washington
DONALD A. MANZULLO, Illinois         DENNIS MOORE, Kansas
WALTER B. JONES, Jr., North          MICHAEL E. CAPUANO, Massachusetts
    Carolina                         HAROLD E. FORD, Jr., Tennessee
DOUG OSE, California                 RUBEN HINOJOSA, Texas
JUDY BIGGERT, Illinois               KEN LUCAS, Kentucky
MARK GREEN, Wisconsin                JOSEPH CROWLEY, New York
PATRICK J. TOOMEY, Pennsylvania      WM. LACY CLAY, Missouri
CHRISTOPHER SHAYS, Connecticut       STEVE ISRAEL, New York
JOHN B. SHADEGG, Arizona             MIKE ROSS, Arkansas
VITO FOSSELLA, New York              CAROLYN McCARTHY, New York
GARY G. MILLER, California           JOE BACA, California
MELISSA A. HART, Pennsylvania        JIM MATHESON, Utah
SHELLEY MOORE CAPITO, West Virginia  STEPHEN F. LYNCH, Massachusetts
PATRICK J. TIBERI, Ohio              BRAD MILLER, North Carolina
MARK R. KENNEDY, Minnesota           RAHM EMANUEL, Illinois
TOM FEENEY, Florida                  DAVID SCOTT, Georgia
JEB HENSARLING, Texas                ARTUR DAVIS, Alabama
SCOTT GARRETT, New Jersey            CHRIS BELL, Texas
TIM MURPHY, Pennsylvania              
GINNY BROWN-WAITE, Florida           BERNARD SANDERS, Vermont
J. GRESHAM BARRETT, South Carolina
KATHERINE HARRIS, Florida
RICK RENZI, Arizona

                 Robert U. Foster, III, Staff Director
           Subcommittee on Housing and Community Opportunity

                     ROBERT W. NEY, Ohio, Chairman

MARK GREEN, Wisconsin, Vice          MAXINE WATERS, California
    Chairman                         NYDIA M. VELAZQUEZ, New York
DOUG BEREUTER, Nebraska              JULIA CARSON, Indiana
RICHARD H. BAKER, Louisiana          BARBARA LEE, California
PETER T. KING, New York              MICHAEL E. CAPUANO, Massachusetts
WALTER B. JONES, Jr., North          BERNARD SANDERS, Vermont
    Carolina                         MELVIN L. WATT, North Carolina
DOUG OSE, California                 WM. LACY CLAY, Missouri
PATRICK J. TOOMEY, Pennsylvania      STEPHEN F. LYNCH, Massachusetts
CHRISTOPHER SHAYS, Connecticut       BRAD MILLER, North Carolina
GARY G. MILLER, California           DAVID SCOTT, Georgia
MELISSA A. HART, Pennsylvania        ARTUR DAVIS, Alabama
PATRICK J. TIBERI, Ohio
KATHERINE HARRIS, Florida
RICK RENZI, Arizona


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    May 3, 2004..................................................     1
Appendix:
    May 3, 2004..................................................    77

                               WITNESSES
                          Monday, May 3, 2004

Gonzalez, Gilbert G. Jr., Acting Under Secretary for Rural 
  Development, U.S. Department of Agriculture....................    30
Green, Pattye, Senior Business Manager for Native American 
  Housing, Fannie Mae............................................    44
Hatathlie, Freddie, Mortgage Consultant-Emerging Markets, Wells 
  Fargo Mortgage.................................................    46
Kitcheyen, Kathleen, Chairwoman, San Carlos Apache Tribe.........    10
Konski, Renee, Senior Loan Specialist, American Financial 
  Resources, Inc.................................................    49
Liu, Hon. Michael, Assistant Secretary for Public and Indian 
  Housing, U.S. Department of Housing and Urban Development......    33
Maryboy, Mark, Chairperson, Navajo Nation Council................    50
Parks, Lawrence H., Senior Vice President, External and 
  Legislative Affairs, Federal Home Loan Bank of San Francisco...    52
Paul, Kent E., Chief Executive Officer, AMERIND Risk Management 
  Corporation....................................................    54
Sabatinos, June, Vice President, Ambulatory Care Services, Tuba 
  City Regional Health Care Corporation..........................    57
Shirley, Joe Jr., President, Navajo Nation.......................    15
Smith, Chadwick, Principal Chief, Cherokee Nation of Oklahoma....    17
Sossaman, Russell, Chairman, National American Indian Housing 
  Council........................................................    60
Taylor, Wayne Jr., Chairman, Hopi Tribe..........................    19
Winfield, Johnny, Vice Chairman, White Mountain Apache Tribe.....    12

                                APPENDIX

Prepared statements:
    Ney, Hon. Robert W...........................................    78
    Matheson, Hon. Jim...........................................    80
    Renzi, Hon. Rick.............................................    83
    Waters, Hon. Maxine..........................................    84
    Gonzalez, Gilbert G. Jr......................................    86
    Green, Pattye................................................   102
    Hatathlie, Freddie...........................................   111
    Kitcheyen, Kathleen (with attachments).......................   115
    Konski, Renee................................................   131
    Liu, Hon. Michael............................................   139
    Maryboy, Mark................................................   147
    Parks, Lawrence H............................................   150
    Paul, Kent E.................................................   153
    Sabatinos, June..............................................   164
    Shirley, Joe Jr..............................................   168
    Smith, Chadwick..............................................   174
    Sossaman, Russell............................................   178
    Taylor, Wayne Jr.............................................   193
    Winfield, Johnny.............................................   199

              Additional Material Submitted for the Record

Shirley, Joe Jr.:
    Written response to questions from Hon. Rick Renzi...........   208
Arizona Department of Housing, prepared statement................   213
Cameron Chapter Housing Testimony................................   217
Indigenous Community Enterprises, prepared statement.............   219
Navajo Partnership for Housing, prepared statement...............   222
Rosebud Sioux Tribe, prepared statement..........................   236
Salt River Community Housing Division, prepared statement........   241
Tribally Designated Housing Entities (TDHEs), prepared statement.   253

 
                    IMPROVING HOUSING OPPORTUNITIES
                          FOR NATIVE AMERICANS

                              ----------                              


                          Monday, May 3, 2004

             U.S. House of Representatives,
                        Subcommittee on Housing and
                             Community Opportunity,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 12:00 p.m., at 
the Greyhills Academy High School Auditorium, Tuba City, 
Arizona, Hon. Robert W. Ney presiding.
    Present: Representatives Renzi and Waters.
    Also Present: Representative Matheson.
    Chairman Ney. The subcommittee will come to order.
    I wanted to explain the process a little bit before we 
start and make an opening statement and then we will have other 
members make opening statements.
    But the Financial Services Committee of the U.S. House is 
chaired by Mike Oxley of Ohio, and the ranking member is Barney 
Frank of Massachusetts, and we have the Subcommittee on Housing 
and Community Opportunity, which is what this subcommittee is 
of the U.S. House.
    My name is Bob Ney. I'm the chairman of the subcommittee. 
I'm from the State of Ohio. We also have our ranking member to 
my right, Maxine Waters of California. To my left, everybody 
knows Congressman Renzi of Arizona. And I assume that applause 
is for all three of us right now. To my extreme right, 
Congressman Matheson of Utah. You can applaud for him, too.
    This is an official hearing of the U.S. House of 
Representatives subcommittee. We have a timer, and we basically 
run the timer. It makes a beep, I think. We will give you a 
little tap here. That doesn't mean we are going to cut you off 
right at that spot in the middle of your sentence, but we keep 
it to five minutes of testimony from each witness. And I think 
we have 16 witnesses today, so we are going to try to hold it 
to five minutes and then the members up here will have five 
minutes to ask questions. But, again, if you are in the middle 
of your statement, feel free to complete it. But that way, if 
we hold you to the five minutes, that will give us time.
    And anything you want to submit for the record, we will do 
that without objection. And you can submit the rest of your 
testimony for the record. So, without objection, all of the 
opening statements will be made part of the record of the U.S. 
House.
    I also wanted to tell you the Subcommittee on Housing last 
year--and I want to praise our ranking member, Maxine Waters of 
California, and the rest of the members frankly, that couldn't 
be here today--we passed approximately 11 housing bills that 
actually went on to be signed into law. And that was done, and 
I'm very proud of our roll call vote in the subcommittee. It 
doesn't mean we didn't have our differences or didn't speak our 
peace on things, but the subcommittee, I think, acted on a 
bipartisan basis. And I wanted to commend our ranking member, 
Maxine Waters, and members of the committee who really tried in 
a diligent way to do something about housing. Sixty some 
percent of Americans have housing. The minority rate is 50 
percent. That is unacceptable, and we have taken some steps, 
there are a lot more steps to be taken, so everybody can share 
in the American dream.
    I do want to tell you how this particular subcommittee 
hearing came about. It happened about 2:00 o'clock in the 
morning. We were having one of those late night votes, and 
Congressman Renzi--I will let him tell you the story when he 
makes his own statement, but he came to me and he had seen some 
very, very deplorable conditions when it came to housing. The 
housing subcommittee also oversees Indian housing, so 
Congressman Renzi asked the question of myself, which we said 
yes to, and with the cooperation of our ranking member, Maxine 
Waters, we are here today along with our colleague, Congressman 
Matheson, who is concerned about this issue.
    When Congressman Renzi asked for this hearing, we started 
to research back--this is Tallman Johnson of our staff, and 
also Cindy Chetti is here in the back, and I know Congresswoman 
Waters will introduce the staff that's here for the minority. 
But we researched back, and there had never been a hearing on 
Indian land in the history of the United States by a housing 
subcommittee. So this is the first time in the history of the 
United States that there is a hearing. I want to thank 
Congressman Renzi for making that possible. I guess I could say 
it's long overdue.
    So it's a historic day for our Subcommittee on Housing and 
Community Opportunity, and as chairman, it's my honor to 
preside over today's proceedings which, again, is the first 
time this subcommittee has ever held in the history of the 
United States a hearing on tribal land.
    Presently, the Native American population is estimated at 
2.5 million. While the national poverty rate is 12 percent, the 
rate among Native Americans is more than twice as high. Forty-
five percent of all Native American households are located on 
tribal lands, and housing is one of the most pressing issues 
for Native Americans living on tribal lands.
    Over 32.5 percent of the homes located on tribal lands are 
overcrowded; 7.5 percent of the Native American homes lack safe 
water or sewage systems; less than 50 percent of the homes on 
reservations are connected to public sewer systems, and 16.5 
percent of homes on native lands are completely without any 
form of indoor plumbing. About 40 percent of tribal homes are 
considered substandard compared to a national average of six 
percent.
    Native Americans today are experiencing chronic housing 
affordability problems. Approximately half of the Native 
American households in tribal areas pay over 30 percent of 
their income for housing expenses compared to the 23 percent of 
all U.S. residents who pay more than 30 percent of their income 
for their housing expenses. Much of this is due to the unique 
relationships, I believe, that Indian tribes have with the U.S. 
Government. Native Americans while residing on reservations are 
U.S. Citizens, but their tribes are recognized as domestic 
sovereign nations with treaty relationships with the U.S. 
Government. The fact that the Bureau of Indian Affairs, BIA, 
holds much of the land in trust means that tribes are allowed 
only limited sovereignty over their lands. This special 
relationship limits the types of economic activity for which 
Indian lands may be used, and I'm hoping today this hearing 
will be the step to try to bridge that so that more things will 
be able to happen.
    One of the most important cornerstones to a strong 
community is homeownership. It creates stability and serves as 
a strong economic staple in our overall U.S. economy. While the 
national homeownership rate has steadily risen and is at an 
all-time high of over 68 percent, there are sectors of the 
population for whom homeownership remains unattainable. In 
fact, the homeownership rate for Native Americans is well below 
50 percent. Clearly, more can and should be done to help all 
families realize the dream of owning a home.
    The changing land status issues, diversity of tribal laws 
and governments, lack of mortgage information and credit issues 
all contribute to the challenges in mortgage lending in Indian 
country. Developmental programs delivered to Indian lands 
should be highly flexible and adaptive to the very unique and 
specific circumstances in each tribal setting. Native Americans 
must be able to take full advantage of partnerships and 
partnering and leveraging efforts across institutions and at 
all levels of our government and through all agencies where 
it's available. If we begin to succeed at these initiatives, 
then opportunities will move into these rural areas.
    As we work to help strengthen homeownership opportunities 
in Indian country, together we will continue to play a 
significant role in improving the quality of life for all 
families.
    And with that, I will yield to our ranking member, Ms. 
Waters.
    [The prepared statement of Hon. Robert W. Ney can be found 
on page 78 in the appendix.]
    Ms. Waters. Thank you very much, Mr. Chairman.
    I would first like to thank you for responding to 
Congressman Renzi and Congressman Matheson, recognizing the 
need for such a hearing and getting it done. I have enjoyed 
working with you. I think that you have shown your concern for 
poor people and people of color and others who do not enjoy 
homeownership to the same degree that our majority of the 
population enjoys, and I'm very pleased that I have an 
opportunity to participate in this hearing today.
    I'm very pleased to be here in Tuba City to participate in 
the first hearing on Native American housing issues ever held 
on Navajo land. And, again, Mr. Chairman, it's because of you 
and Congressman Renzi and Congress Matheson that we are here. I 
would like to thank both of our staffs for the wonderful work 
that has been done in putting this visit together.
    The tour that we were on this morning was awfully 
revealing, and I wish every member of Congress could see what 
we saw today. A special thanks to our staffers, Jeff Riley, who 
is our counsel; and Jaime Alisiga, who is our parliamentarian, 
along with the other staff members and all who have helped to 
work to put this tour together and this hearing together.
    I am very concerned about the many barriers that Native 
Americans face when they seek to pursue homeownership. Whether 
it stems from Native American poverty or the heavy hand of 
bureaucracy at the Bureau of Indian Affairs when prospective 
homeowners seek BIA approvals, we cannot accept a process that 
produces so many fewer opportunities for Native Americans to 
own their homes and thereby build wealth than for others who 
live in America.
    While I know that you sought the BIA's appearance at this 
hearing, Mr. Chairman, I'm disappointed that the Bureau of 
Indian Affairs is not represented on one of the panels today. 
This government agency, more than any other, needs to step up 
to the plate and work together with the tribes, HUD, RHS and 
the secondary market to formulate solutions to the housing 
problem on Native American lands.
    While I am glad that we are discussing the significant 
housing challenges faced by Native Americans, I'm hopeful that 
we can all work together, the Congress, the administration, can 
work together to increase appropriations for assistive housing 
programs. And we all, I think, because of what we are learning, 
can take another look at any proposed budget cuts for the year 
2005. I just think that the more we know, the less we can 
accept budget cuts.
    I look forward to the insights of our witnesses, especially 
our tribal witnesses, as to how we can develop solutions that 
meet your needs for housing and homeownership opportunity while 
respecting your culture and your sovereignty.
    Mr. Chairman, when land was taken from Native American 
tribes, the United States gave its solemn promise to protect 
the rights of the tribes to govern themselves and to provide 
for the health, education, and well-being of tribes. That 
commitment, the trust responsibility, is not a handout but a 
contract, a contract that unfortunately has been broken time 
and time again by our own government.
    I believe that an essential element of the federal 
government's trust responsibility is that it must take the 
steps necessary to make homeownership opportunities as 
available to the members of tribes as they are to the rest of 
America's population. With a Native American homeownership rate 
of only about 33 percent as compared to an overall 
homeownership rate approaching somewhere around 68 percent, 
it's clear that much work will need to be done.
    The Native American population is one of the fastest 
growing groups in the United States. Unfortunately, it is also 
one of the poorest segments. According to the U.S. Census 
Current Population Survey, the poverty rate of Native Americans 
in the late 1990s was about 26 percent while the national 
average was 12 percent. By any calculation, the increases in 
population are creating housing needs which continue to far 
outpace the funding that we are providing.
    While land and home are viewed as central to family life in 
the Navajo culture, the housing problems of the Navajo Nation 
are nonetheless particularly severe. The Navajo Nation is the 
largest reservation in the country. It covers over 16 million 
acres in three states. It is the size of West Virginia. There 
are 255,543 enrolled members of the tribe with about 180,000 
living on tribal land. The median age, we understand, is about 
22.5 years.
    According to the 2000-2001 Comprehensive Economic 
Development Strategy Report from the Native Nation Office on 
Economic Development, 56.1 percent of Navajo people live below 
the poverty level, the per capital income is only about $6,212, 
and the unemployment rate is about 43.65 percent. Some 31 
percent of the homes on the reservation lack complete plumbing, 
60 percent lack telephone service, and about one-fifth of 
owner-occupied units on the reservation are mobile homes. The 
development of housing on the Navajo Nation is even more 
complicated than it is on other reservations, as 94 percent of 
Navajo land is tribal trust land, the most difficult type of 
land to develop.
    Mr. Chairman, strong communities are built one home at a 
time. To strengthen reservation communities, we must provide 
safe, decent, affordable housing for all families living in 
them. Today, approximately 40 percent of all reservation 
housing is inadequate. Twenty percent do not have plumbing.
    Mr. Chairman, the unmet housing needs in Indian country are 
simply enormous. HUD at one point estimated that current 
NAHASDA funding levels would only meet five percent of Native 
Americans' needs for housing. Without going much further, when 
we talk about NAHASDA funding or some of the proposed cuts, 
because of what we know and what we are learning, I think we 
are going to have to all work together to review any proposed 
cuts and, again, get the administration together with the 
Congress of the United States and do the right thing, just do 
what we need to do.
    In closing, let me say to Congressman Renzi that your 
guidance on the tour this morning was absolutely fascinating 
and certainly appreciated. You know your district and you 
certainly understand these concerns, and I'm very appreciative 
for the time that you took to put this meeting together and the 
statistics, this data, that was gathered for me by my staff. I 
want to thank you, and Congressman Matheson, I want to thank 
you for working together with us. Mr. Renzi as you address 
these very complicated and tremendous problems that you're 
confronted with.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Hon. Maxine Waters can be found 
on page 84 in the appendix.]
    Chairman Ney. Thank you.
    I also want to note, I, too, am disappointed the BIA is not 
here, and we will talk at a follow-up hearing, also. Since this 
is the first-ever hearing, I would prefer they be here on 
Indian tribal land, but we will follow up with them, also, in 
Washington.
    The gentleman from Arizona, Mr. Renzi.
    Mr. Renzi. Thank you very much.
    Let me begin by thanking Chairman Ney, Ranking Member 
Waters, and our neighbor to the north, Congressman Matheson of 
Utah, for traveling this far, for taking the time. I also want 
to recognize the leaders of the Coconino County board of 
directors. Deb Hill is here. We have council delegates from the 
Navajo Nation, from the Apache Nation, from the Hopi Nation, 
our leaders, our chairmen, our presidents are here, which we 
will introduce them a little bit later. I thank all of you for 
finally coming together and helping me and working with us to 
pull off this field hearing which, as we have heard, is 
historic. It's long overdue.
    I represent more Native Americans than anyone else in 
Congress. I've told President Shirley on many occasions it's 
hard for me to go home to Washington, to go home to my ranch, 
and call myself a congressman after I've been to Kaibito and 
seen the deplorable conditions up there. The first time I went 
up there, I saw six children living in a mud hut with their 
grandmother raising them, and they had dysentery. And, so, to 
be able to sit with myself and look at myself in my own mirror, 
I have to--and be a representative, I'm so very thankful for 
Chairman Ney who, when I went back to Washington after seeing 
that, on the floor at 2:00 o'clock in the morning, he committed 
that he would come out here and have this hearing this morning.
    So, Chairman Ney, thank you for coming all the way out from 
Ohio and bringing a full-blown Congressional hearing to the 
Navajo Nation to address this issue. My district is over 60,000 
square miles, larger than the State of Illinois. Our Speaker of 
the House is from Illinois, and I have a tendency to tell him 
my district is bigger than your State, I need more money, I 
need more help.
    And it's my privilege to represent the Navajo. There are 
Hopi members within this district, the Zuni, the San Juan 
Paiute, the Tonto Apache, Yavapai Prescott tribe, the San 
Carlos and White Mountain Apache tribe. Strong, wonderful 
people who give and serve this nation and who deserve the very 
best, and they deserve our government to meet their treaty 
obligations. This is why we are here today.
    Home ownership in America is many times referred to as an 
American dream, but how much of a reality is that dream here on 
native--in Indian country? We are learning that homeownership 
has a beneficial effect. Obviously, it helps marriages; 
obviously, it helps reduce crimes and helps with law 
enforcement in communities. But have you ever heard that there 
are studies that now show that math achievement and reading 
recognition scores are seven percent higher among young 
children and graduation rates are 13 percent higher among 
families who own their own home? Who would have thought that 
the fruits of homeownership actually go all the way down to 
test scores.
    In addition, families can build equity in their homes. It 
allows them to borrow against the equity to get their kids to 
go to college, to be able to borrow against their homes and 
form their own small businesses. I'm able to become a U.S. 
Congressman because I borrowed a second mortgage on a home in 
Sierra Vista, Arizona, built a little insurance agency and then 
was able to go to law school and then run for Congress. And 
yet, unfortunately, homeownership among Native American 
families is less than one-third. So one out of three Native 
American families actually own their own home.
    And as we saw today, and as Ranking Member Waters pointed 
out, we saw children living in nothing more than wooden shacks 
without electricity, without modern sanitation and without pure 
water. We met a woman today whose water well is contaminated by 
oil. And so these are chronic problems where health officials 
are recognizing that these conditions are contributing to 
physical and mental defects in our children, and in particular 
in these areas.
    In the first district of Arizona, we also have the problem 
with the Bennett Freeze. This is an area of 1.3 million acres 
in size which, due to conflicting claims, the federal 
government in 1966 imposed a ban on further construction. We 
have seriously never addressed the adverse conditions which are 
imposed by this wrong policy.
    Now, I've got to give it to Chairman Taylor and the 
Honorable President Joe Shirley, because these two people are 
working together to seriously address the issue of the Bennett 
Freeze and we are coming very close to an agreement and a 
compact.
    Finally, it is my hope that this first hearing will not 
only shed light on the issue, but out of it will come direct 
objectives and missions. We will have results, not just words, 
to talk about. I am going to follow up with a workshop. I'm 
going to ask Chairwoman Kathy Kitcheyen of the San Carlos 
Apache to host it. We will have a workshop. We will bring in 
private industry, the banking, financing, the credit people 
will come in and begin to address the ideas of how this first 
generation of Native American people can break through the 
impediments to homeownership, whether it be putting more 
counselors on the Navajo or the Hopi or the Apache Nations, so 
that the young people can enjoy homeownership, so the 
application process itself doesn't become a wall or an 
impediment to homeownership. So I'm looking forward to 
following up and asking your leadership with that workshop.
    Mr. Chairman, if I have your permission, I would like to 
introduce a guest that we have. With us today is Mr. Eddie Cody 
of the Navajo Nation. He is a recent recipient of USDA home 
repair funds. Mr. Cody needed an addition to his home and we 
were able to help him through the USDA 504 Home Ownership 
Repair Program.
    One of the things that's so important, real quick, about 
these programs is the Navajo people, the Hopi people, the 
Apache people don't want to send their elders down to Phoenix 
to nursing homes. And having the ability to add on additions to 
their homes allows them to bring the elders in for respite care 
and elder care in their homes rather than shipping them off to 
a nursing home. With this kind of a program we are able to fund 
additions onto the homes and reach out to our elders in our 
community.
    So, with that, I want to thank the people of northern 
Arizona, particularly those who have taken their time away from 
their families to come here today.
    Mr. Chairman, I yield back. Thank you.
    Is Mr. Cody with us in the audience? Mr. Cody, thank you.
    [The prepared statement of Hon. Rick Renzi can be found on 
page 83 in the appendix.]
    Chairman Ney. Thank you.
    Congressman Matheson from Utah, who borders the entire 
state of Arizona, and who spent time with Congressman Renzi 
today sharing their concern, and also some of the groups. 
Obviously, that border between the two states doesn't exist 
when it comes to Indian affairs.
    Mr. Matheson. Thank you very much, Mr. Chairman. Thanks for 
holding this hearing. I want to extend my thanks to you. I'm 
also really glad to join you and Ranking Member Waters and 
Congressman Renzi today.
    This hearing is, as Congressman Renzi suggested, probably 
long overdue and I'm pleased we're here. Thank you for your 
leadership in making this happen. I really look forward to 
hearing testimony today from this distinguished group of 
witnesses.
    I would especially like to, before I start with my 
statement, welcome my constituent, Mr. Mark Maryboy, delegate 
from Utah on the Navajo Nation Council. I believe we will hear 
from him on the third panel.
    Many Native Americans continue to live in appalling housing 
conditions, and this is taking place at the same time while 
much of our nation is improving in this regard. Now, the Senate 
Committee on Indian Affairs has released a report that shows 
American Indian and Alaska Native populations live in housing 
that is often and justifiably compared to third world nations. 
One out of every five Indian homes lacks complete plumbing 
facilities and over 90,000 American Indians and Alaska Natives 
are homeless or underhoused.
    I have had the opportunity to see firsthand the need for 
housing in Indian country when I visited the Utah portion of 
the Navajo Nation, which I represent in Congress, and also the 
tour we took this morning through parts of Arizona. I have met 
with families and individuals who have expressed their 
frustration with the process of building and owning a home on 
tribal lands. My constituents have raised a number of 
challenges to homeownership, including duplicative tribal and 
federal bureaucracy of obtaining homesite lease, trust status 
of tribal lands, lack of basic electrical and water delivery 
systems, lack of roads, lack of federal funding, and the 
difficulties these individuals face in trying to obtain 
conventional mortgages.
    During my time on the Navajo Nation, I have had the 
opportunity to become acquainted with one particular grassroots 
non-profit organization, Indigenous Community Enterprises. I 
have seen their approach to addressing the housing needs of the 
often-forgotten Navajo elders. Utilizing a NAHASDA subgrant and 
local resources, including, in the case of one I visited in 
Utah, the Monument Valley High School vocational students and 
Utah Navajo Trust Fund financial support, ICE constructed an 
elder hogan home that will be traditionally blessed this 
Friday, May 7th. The ICE elder hogan home incorporates the 
traditional octagon hogan in its design. The design respects 
the traditional space but adds the basic amenities of a modern 
kitchen and bathroom.
    ICE employs a community-based approach of personal 
responsibility and capacity building to build hogan homes. 
Collaborating with local high schools, Navajo Nation entities, 
banks and community and family members, ICE seeks to address 
the underlying problems to homeownership on the Navajo 
reservation by not only construction of a hogan home but by 
offering financial literacy, Individual Development Account 
savings programs, homeownership skills and credit counseling. 
Additionally, ICE uses small diameter timber from the regional 
forest thinning and is moving towards using straw bale products 
that can be manufactured from the Navajo Agriculture Products 
Industry.
    Innovative ways to provide homes, the use of local 
resources, and ensuring that individuals have the necessary 
financial knowledge and skills can make homeownership a reality 
in Indian country. We can no longer look toward any government 
to simply provide homes. It will require innovative, 
collaborative efforts such as this to address the housing needs 
that I witnessed on the Navajo Nation. It will also require a 
deeper understanding of all parties involved of the true 
obstacles to adequate housing, be they a lack of 
infrastructure, supply, mortgage products, or incentives to 
build.
    Again, Mr. Chairman, thank you for holding this important 
hearing today. I look forward to hearing from each panel to 
better my understanding of the issues that the federal 
government, tribal governments, housing entities and financial 
institutions face in addressing the housing shortage in Indian 
country. I look forward to hearing their recommendations for 
improving housing opportunities for Native Americans and I look 
forward to working with my colleagues to implement any 
necessary legislative solutions. Thank you very much.
    [The prepared statement of Hon. Jim Matheson can be found 
on page 80 in the appendix.]
    Chairman Ney. Thank you. I want to thank all the members 
for their testimony. And as far as the panel of witnesses, 
without objection, their written statements will be made part 
of the record and their five minutes will begin.
    Let me introduce the panel and then we will get right to 
the testimony. First member of the panel is Kathy Kitcheyen, 
and she is the chairwoman of the San Carlos Apache. The San 
Carlos Apache Indian reservation encompasses more than 1.8 
million acres in southeastern Arizona. Welcome.
    Dallas Massey, Sr., the tribal chairman of the White 
Mountain Apache Tribe. Its 12,000 members reside on 1.6 million 
acres of its ancestral homeland on the Fort Apache Indian 
reservation about 200 miles northeast of Phoenix. Welcome to 
you.
    And Joe Shirley, Jr. is the sixth President of the Navajo 
Nation. The nation has approximately 225,000 members and a land 
base of 7.5 million acres across New Mexico, Arizona and Utah. 
Welcome, President Shirley.
    And Chief Chadwick Smith is the principal Chief of the 
Cherokee Nation of Oklahoma, based in Tahlequah. Am I close.
    Mr. Smith. Close. Tahlequah.
    Chairman Ney. Tahlequah, Oklahoma. Welcome, Chief.
    And Wayne Taylor, Jr. Is the chairman of the Hopi Tribe. 
The Hopi reservation covers 1.5 million acres in northeastern 
Arizona and is bound on all sides by the Navajo reservation. 
Welcome, Chairman Taylor.
    We will start with Chairwoman Kitcheyen.

 STATEMENT OF KATHLEEN KITCHEYEN, CHAIRWOMAN, SAN CARLOS APACHE

    Ms. Kitcheyen. Good afternoon, Chairman Ney, Ranking Member 
Waters. You better reset that because I think I lost 30 
seconds.
    Chairman Ney. That's right. You speak up.
    Ms. Kitcheyen. Good afternoon, Mr. Ney, Chairman; Miss 
Waters, Ranking Member; Mr. Matheson from Utah, and also our 
very own Rick Renzi, who has a very passion about his work. And 
we thank you for coming and being able to organize this, Mr. 
Renzi. Thank you very much.
    As you've just heard, my name is Kathy Kitcheyen. I'm the 
chairwoman of the San Carlos Apache Tribe based in San Carlos, 
Arizona. I am very honored to be here to testify today.
    As you've already mentioned, it's an historic occasion. 
It's been a long time coming. We have been dealing with the 
United States government for over 500 years and never have we 
seen people of your caliber come out to our part of the 
country.
    So I thank you very much for your compassion, for your 
humility, and for your courage. Thank you. Today, I am joined 
by Robert Olivar, who is on the council and is the chairman of 
our housing authority. And also there is a delegation, Ronald 
Boni, who is executive director of housing; Opal Kees, staff 
person; Chuck Hills, staff person; and also Debbie Ho as well.
    Also in the--well, before I begin, again, I would like to 
thank you for addressing the needs of housing in Indian 
country. What you saw today is probably what you see on other 
Indian reservations as well. We appreciate the dedication that 
you have to this serious issue. I'm sure it's not easy being 
far away from Washington D.C. And all the Starbucks.
    To better understand the housing needs of my tribe, it is 
helpful to know our history. The aboriginal territory of the 
Apache Nation included the western part of Texas, Arizona, New 
Mexico, and the country of Mexico as well. Pursuant to the 
Treaty of Santa Fe of 1852, lands were set aside for a 
permanent Apache tribal homeland and the United States promised 
to provide for the humane needs of the Apache people.
    The San Carlos reservation was established in 1871. Through 
the concentration policies of the United States, various bands 
of the Apaches were forcibly moved to the San Carlos 
reservation. Throughout history, the United States diminished 
the size of the reservation several times due to the discovery 
of silver, copper, coal, and water. The reservation now spans 
three Arizona counties: Gila, Graham and Pinal. The reservation 
currently has a land base of 1.8 million acres. It's mostly 
rural and lacks basic infrastructure in many parts. The total 
population is 12,532 members.
    A majority of our members live on the reservation, 84 
percent of them. While we have worked hard to develop our 
reservation economy, there is still a high unemployment rate of 
76 percent. We suffer from a poverty level of 77 percent. The 
tribe has designated the housing authority to operate and 
administer the tribe's housing program. We have two critical 
housing needs, a severe housing shortage and severely 
inadequate utility infrastructure. These inadequacies create 
unsafe and unsanitary conditions.
    This situation is simply unacceptable in this great country 
of ours. Let me be clear that the San Carlos Apache Tribe 
supports our troops in Iraq and other parts of the world. The 
Apaches have many decorated war veterans that have served with 
distinction. In fact, the San Carlos Housing Authority has an 
employee named Percy Via, an army reservist, who has worked for 
them for 20 years. He was called to duty and was part of the 
first wave of army soldiers to invade Iraq. He just returned 
home three weeks ago, and we are very proud of him.
    However, I wonder about some of the priorities of the 
United States when Indian communities, my community, the San 
Carlos Apache reservation, was never built the way it should 
have been, when our needs were never addressed the way it 
should have been; why we have overcrowded conditions when there 
are people, disabled people, living without the proper ramp, 
without proper facilities in the bathroom.
    When I hear about the billions of dollars the United States 
is spending to rebuild Iraq, homes and infrastructures for 
them, I wonder why the United States will help them but put the 
issues of the first Americans aside. I cannot stress enough the 
dire housing shortage on the reservation. There are 
approximately 2,400 families on the reservation in need of 
homes. Thirty-nine percent of families live in substandard 
housing and 40 percent of families live in overcrowded 
conditions.
    We have calculated that it would take building 125 homes a 
year for ten years to meet the housing needs of tribal members. 
Also, 94 percent of our families are considered low income. Mr. 
Olivar, the chairman of our housing board, recently stated that 
he receives at least six visits a day from families who have no 
place to go and are in desperate need of housing. It is 
heartbreaking to tell these families that the waiting list is 
too long and that there are no homes for them. I know other 
council members meet with families with the same plights as 
often as Mr. Olivar. I have a couple pictures over here to my 
right that depict a couple of the homes on the reservation, and 
there are many more like them.
    One area that needs improvement is the environmental review 
process required for HUD's Indian Housing Block Grants. The 
tribe is frustrated with the long amount of time that it takes 
for HUD to approve these environmental reviews. The tribe 
submitted environmental reviews for two of its housing projects 
over a year ago and there has been no action taken by HUD. As 
discussed above, we have tribal members who are homeless or in 
need of serious rehabilitation. These delays, therefore, take a 
huge and sometimes irreversible toll on our people. We 
recommend that HUD be given more resources to handle the huge 
loads and we also recommend that HUD streamline and expedite 
the process.
    And tied to our housing needs are our utility 
infrastructure. The tribe's utility infrastructure is sorely 
inadequate. Without improved infrastructure, it will be 
difficult to provide decent housing. Specifically, our sewage 
treatment systems are in such bad shape that they are causing a 
health risk to nearby communities as well. The hydraulic 
capacity of our existing sewage treatment facilities have been 
exceeded by approximately 16 percent. Due to the lack of funds, 
the existing sewer ponds are filling with too much sludge and 
the berms have been deteriorated.
    In an attempt to address our sewage system problems, the 
tribe did seek funding from USDA's Rural Housing Service a few 
years ago. However, the Rural Housing Service did not have 
enough funding to allow us to fix our sewage system problems.
    The tribe's current water storage facilities are also 
inadequate. The storage tanks are too small and do not meet the 
tribe's demand by 24 percent. In order to provide and build 
more homes, adequate storage and distribution systems need to 
be installed. Unfortunately, the tribe does not have the 
funding to upgrade or build the required systems to meet 
demands. We would certainly appreciate your assistance on these 
matters.
    As a final point, I was in attendance at the signing of an 
executive order by President Bush related to Indian education 
of the No Child Left Behind Act last week. Rod Page, Secretary 
of Education, and Gale Norton, Secretary of Interior, are to 
spearhead the interagency Indian Education Groups.
    The simple fact is that if our children are to be 
successful, they need adequate housing. And with that, I rest 
my case. Thank you for the opportunity to testify, and please 
come again.
    Chairman Ney. Thank you very much. I appreciate your 
testimony.
    [The prepared statement of Kathleen Kitchen can be found on 
page 115 in the appendix.]
    Chairman Ney. And next, I introduced him as Chairman 
Massey, but actually Vice Chairman, Johnny Winfield, filling in 
for Chairman Massey.

  STATEMENT OF JOHNNY WINFIELD, VICE CHAIRMAN, WHITE MOUNTAIN 
     APACHE TRIBE; ACCOMPANIED BY ANEVA YAZZIE, MANAGEMENT 
      CONSULTANT, WHITE MOUNTAIN APACHE HOUSING AUTHORITY

    Mr. Winfield. Good afternoon. My name is Johnny Winfield. I 
represent the White Mountain Apache Tribe as the vice chairman. 
I would like to welcome each and every one of you, the 
Subcommittee on Housing and Community Development, to the 
Navajo Nation within the State of Arizona within Indian 
country.
    I'm here on behalf of the White Mountain tribal chairman, 
Dallas Massey, who is unable to make it due to other 
commitment, so I'm going to follow through with what he brought 
to my attention.
    We are knowledgeable of new housing legislation, NAHASDA, 
that was enacted in 1996. Under that new federal housing 
program for Native Americans, we had designated our housing 
authority, the White Mountain Apache Tribal Authority, as a 
Tribal Designated Housing Entity and we have been very 
successful in carrying out our effort of housing opportunity 
for our tribal members. I believe we are at the forefront of 
tribes across the country to take full advantage of leveraging 
opportunity with willing financial partners that have opened 
under this new Indian housing law.
    We have accomplished a lot of first ever initiatives, such 
as:
    One, issuing a tax exempt bond in the amount of $25 million 
to build 250 homes, which has increased to 317 due to a cost 
savings measure in our construction method. This bond issuance 
was only possible through the collateralization of HUD's 
Section 184 loan program on each of the construction mortgage 
loans executed with our lending institution, Bank One. We call 
this lending purchase mortgage-based homeownership program 
Apache Dawn.
    Two, since the creation of this housing authority back in 
1963, for the first time under the Apache Dawn, we used our own 
tribal resource for material, Fort Apache Timber Company, Fort 
Apache Timber Company Home Center, White Mountain Apache Tribe 
Public Works and contractors utilizing our tribal employees in 
significant numbers for the construction of homes.
    Item three, we were also the first tribe in Arizona to 
receive a low interest loan to address our infrastructure needs 
from the Arizona Water Infrastructure Financial Authority, 
WIFA, in the amount of $5 million. This was a true tri-
governmental relationship between our tribes, state and federal 
agencies. WIFA had to qualify as an approved lender under HUD's 
Title VI Loan Guarantee Program in order to minimize this risk 
and make the loan possible for our tribe.
    Since the creation of the housing department under the 
State of Arizona by our own good friend, Janet Napolitano, who 
is the first governor who has shown a true concern and is 
proactive in addressing our tribal housing situation in the 
State of Arizona, we were the first tribe to partner with their 
office in addressing our badly needed rehab needs for our 
housing units through both their tax credit and state housing 
fund programs. We are fortunate to have a very strong state 
government relationship in all our housing endeavors.
    In addition to these first ever initiatives, the White 
Mountain Apache Housing Authority has aggressively applied for 
HUD and other outside grant sources that have enabled a total 
of over $80 million to be infused into our tribal communities 
since 1998. This is--this has proved that the new Indian 
housing law can work for tribes with a capable and committed 
team on the housing staff, expert consultants combined with 
strong tribal and community support.
    We have also received strong support from both our local 
and national HUD office. As stated above, we have had a very 
successful relationship with Phoenix, Denver, and headquarter 
administration of the Native American Housing Program. The new 
Indian housing law allows the opportunity to work with other 
funding agencies to address rehab and/or new construction 
needs, including costly offsite infrastructure systems.
    In working with other agencies, we have encountered several 
obstacles in our attempt to increase the assistance needed for 
our tribal members. This includes:
    One, partnership with the Federal Home Loan Bank's 
Affordable Housing Program. We have encountered several program 
differences for delivery assistance to Native American 
communities. This includes the unique need to address the trust 
land issue in the execution of regulatory agreements, the low 
income threshold requirement under the NAHASDA, unique BIA land 
issues, and risk issues for future banking relationships.
    In partner with the U.S. Department of Health and Human 
Service's Indian Health Service technical arm, we have 
encountered one major regulatory prohibition that hinders 
assistance for tribal members. The tribes are prohibited from 
obtaining assistance for homes if the homes are receiving 
assistance from HUD. Since the resources for funding are both 
federal assistance, IHS statute and program regulation 
restrictions should be removed to allow its use in a 
coordinating manner at the local level or reallocate such funds 
to a national level from IHS to HUD to address infrastructure 
needs from one federal funding source.
    Even through this is a sensitive issue to those tribes that 
are not obligated to their funds in a timely fashion and 
possible to be subject to recapture the funds and returned to 
the U.S. Treasury; rather, a mechanized need to be put in place 
to reallocate those funds to tribes that have proven track 
record of effective address of their homes need to be timely 
manner. While this may not be uniformly addressed, each tribe's 
respective needs it will be addressed in the overall backlog 
housing needs for the tribes in aggregate from the 
Congressional point of view and all funding would still be 
directed at the address of the vast problem rather than 
returning to the general fund back to the Treasury, not 
addressing the housing problem.
    A means of stable employment is necessary for tribal 
members in order to make housing payables. This leads to the 
need for the economic development for sustaining tribal 
communities and to become truly self-determined. Therefore, the 
program regulations should be able to allow economic 
development as an eligible activity as it relates to affordable 
homes.
    This should not be considered an exhaustive list but are 
those that we have seen as obstacles and as experienced by the 
White Mountain Apache Tribal Housing Authority that needs 
immediate attention by responsible federal officials for the 
sake of all tribes. We stand ready to address and work 
cooperatively towards working solutions to enable all tribes to 
better address and solve their housing need.
    We have used the USDA Agriculture Rural Development Program 
to receive combination grant and loan funding to address our 
infrastructure needs. These funds are supplemental to NAHASDA 
and WIFA funds as described above to provide the construction 
of regional water and wastewater treatment facility at Hondah. 
This is greatly increasing in capacity, accommodating the 
planned expanding of our homes at Hondah home sites and Apache 
Dawn home funding under NAHASDA. The White Mountain Apache 
Tribal Housing Authority also plans to utilize the USDA's Rural 
Housing Service, rural development housing service in the near 
future to expand the home assistance serving our tribe.
    All of our land is trust land. With the assistance of the 
federal loan guaranteed programs offered under HUD Section 184, 
Title VI provide NAHASDA, we are able to bridge the housing 
need for both subsidized and mortgage-based programs with 
approval of BIA land leases for two consecutive period of 25 
years for our tribal members. The maximum lease period of 50 
years specified in the NAHASDA statute needs to be changed to 
allow for even longer period of time.
    Steps that can be taken to increase private market 
initiative is to maintain and to increase the level of federal 
loan authority under the two HUD loan grant guarantee programs 
that have worked successfully for our tribe, namely the Section 
184, Title VI program. Eligibility criteria should also be 
expanded to fill the pocket of needs of those families that are 
not low income which is a growing segment of the tribal 
population and cannot secure mortgage financing on trust land 
without some form of many federal loan guarantee. Education----
    Chairman Ney. I'm sorry. Not to interrupt you, but time has 
expired.
    Mr. Winfield. Thank you.
    Chairman Ney. Wrap it up.
    Mr. Winfield. Wrap it up?
    Chairman Ney. Yes.
    Mr. Winfield. Education about these programs should also 
continue to both tribes and the private financial sector on how 
these programs work. Heavy education should also be continued 
for Native American on benefits of true homeownership as well 
as financial literate education. And this is the statement that 
was brought to my attention from the tribal chairman. Thank you 
very much.
    Chairman Ney. Thank you. We will have the rest of it in the 
record.
    [The prepared statement of Johnny Winfield can be found on 
page 199 in the appendix.]
    Chairman Ney. Again, I'm just trying to hold it to five 
minutes so we can get some questions in. Thank you. President 
Shirley.

    STATEMENT OF JOE SHIRLEY, JR., PRESIDENT, NAVAJO NATION 
 ACCOMPANIED BY CHESTER CARL, CHIEF EXECUTIVE OFFICER, NAVAJO 
                       HOUSING AUTHORITY

    Mr. Shirley. Thank you, Mr. Chairman, members of the 
committee.
    I feel very honored to share your presence with us here on 
Navajo land and I want to welcome you. And thank you, 
Congressman Renzi, for doing everything you could to make this 
hearing possible. You have done much and I'm looking forward to 
continue to work with you.
    Mr. Renzi. Thank you, Mr. President.
    Mr. Shirley. With me here today is Chester Carl, who will 
help answer questions maybe afterwards.
    Gentlemen, Ms. Waters, I'm Joe Shirley, Jr., President of 
the Navajo Nation. There are a myriad of challenges facing us 
related to housing, related to Navajos, sovereign Native 
Americans, but I want to zero in on a particular issue at this 
time because of the limited time and will share the rest with 
you in written testimony.
    The Navajo Nation and the Navajo Housing Authority are 
deeply concerned that a recent HUD decision will reduce Indian 
Housing Block Grants for the Navajo Housing Authority by over 
$5 million. HUD's policy determination, made without consulting 
with Indian tribes as mandated by federal law, subverts the 
letter, intent and spirit of NAHASDA and will prevent the 
Navajo Nation and many other tribal governments on Indian 
reservations throughout the country from serving the critical 
housing needs of our people.
    These drastic reductions are caused by HUD's decision to 
use for the first time the so-called multi-race census data in 
the Indian Housing Block Grant formula. As you know, the 2000 
census allowed those responding to questions on race and 
ethnicity to check one or more of the listed race categories. 
In 1990, when only a single race category could be selected, 
almost two million people checked the American Indian and 
Alaskan Native category. Yet, in 2000, over four million 
identified themselves either as American Indian and Alaskan 
Native alone or as American Indian and Alaskan Native in 
combination with one or more other races. This amounts to an 
incredible 110 percent American Indian and Alaskan Native 
population growth rate compared to the U.S. Population growth 
rate of only 13 percent.
    In 2000, those who identified themselves as American Indian 
and Alaskan Native alone was 2.5 million, a figure much more 
realistic and closer to the population growth rate nationally. 
Moreover, studies have shown that a substantial majority of 
those who indicated they are American Indian and Alaskan Native 
and another race would have selected a non-American Indian and 
Alaskan Native race if they had been asked to designate only 
one category. Yet, despite the fact that American Indian and 
Alaskan Native alone data more accurately reflects the true 
Indian population under the NAHASDA definition of Indian as any 
person who is a member of an Indian tribe, HUD has nevertheless 
mandated the use of the multi-race data in the Indian Housing 
Block Grants formula.
    When the multi-race data is plugged into that formula, 
large sums of housing funds are shifted away from areas with 
populations that self-identify as American Indian and Alaskan 
Native alone, which tend to be reservation lands, to areas of 
populations that self-identified as American Indian and Alaskan 
Native in combination with other races, which tend to be more 
urbanized, non-reservation areas.
    Although Congress intended NAHASDA to help tribes and their 
members improve their housing ambitions and socioeconomic 
status, HUD's decision disregards the bedrock principle of 
self-determination and self-governance of the tribe's rights to 
determine its members.
    HUD's own preliminary estimates using multi-race data 
reveal that with a reduction of over $5 million, the Navajo 
Nation will suffer the largest single cuts in funding, vital 
funds that will be taken away from Navajo families desperately 
in need of basic housing.
    Other tribes located right here in Arizona will also face 
severe reductions. For example, the Tohono O'Odham tribe will 
lose upwards of $743 million, an 11 percent reduction. The Hopi 
tribe will lose over $613 million, a 17 percent reduction. The 
Salt River Pima will lose over $738 million, a 24 percent 
reduction. And the Chochiti will lose $111,820, a 35 percent 
reduction.
    Congress must not allow this untenable and unfair result to 
stand. We respectfully request that HUD use tribal enrollment 
figures as the best indication of who are Indian under, and 
entitled to the benefits of, NAHASDA or, in the alternative, 
use the 2000 Census American Indian and Alaskan Native alone 
count as most compliant within the NAHASDA definition of Indian 
and most reflective of NAHASDA's intents and purposes.
    I might just add also that we are trying our best, Chairman 
Ney, to defrost the Bennett Freeze. I think you've seen a 
couple houses in that area, and it's very undeveloped. We had 
to go through a lot of red tape and bureaucracy to get in any 
infrastructure. Hopefully, in the near future, we will overcome 
that. And if we do that, we will need all the help we can get 
putting in infrastructure and housing and the like. Thank you 
very much.
    Chairman Ney. Thank you, President Shirley.
    [The prepared statement of Joe Shirley Jr. can be found on 
page 168 in the appendix.]
    Chairman Ney. We will move on to Chief Smith.

 STATEMENT OF CHADWICK SMITH, PRINCIPAL CHIEF, CHEROKEE NATION 
                          OF OKLAHOMA

    Mr. Smith. Good afternoon, Chairman, and honorable members 
of the committee. My name is Chad Smith, and I am the principal 
chief of the Cherokee Nation. We are located in eastern 
Oklahoma.
    One of the highlights of being principal chief is being 
able to visit a remote location hidden in the hills of eastern 
Oklahoma. Even before you are able to see what is happening, 
you can hear hammering, sawing and humming of generators, all 
interspersed with the sound of the Cherokee language. You hear 
the laughter of children playing in the nearby woods. These are 
sounds of a house being built in a Cherokee community by a 
Cherokee community.
    This is a pilot project. Houses are being built with 
materials purchased by Cherokee Nation funds using NAHASDA. 
Community members provide the labor. Instruction and 
supervision is provided by the Cherokee Nation through USDA 
funds as well as tribal funds. A flexible, stable funding 
source such as NAHASDA allows the Cherokee Nation to determine 
what works best for our members. It is very important to put 
our common members in a situation where they can rebuild their 
communities, acquire new capacities and expand their 
capabilities to help themselves.
    The leadership of the Cherokee Nation can, quote, make 
ourselves useful, by thinking strategically about how to use 
our resources in a manner that enhances opportunities for 
tribal citizens to help themselves. By thinking in a broader 
context, the Cherokee Nation seeks to build people, not just 
physical structures.
    Let me share with you one example. One of our self-help 
participants is a full blood Cherokee in his mid 40s who has 
caught chickens at a processing plant all of his life. This is 
back-breaking work that is demanding and often physically 
debilitating through the years. This man often puts eight to 
ten hours of work in each day catching chickens, then he helps 
build houses in Cherokee communities for four to six hours on 
the same day. He just learned how to use a tape measure and 
thinks he may want to build houses for a living. He wants to 
volunteer to assist and to teach other Cherokees what he has 
learned.
    The Cherokee Nation would like to see more instances of 
this to make our limited funding go further and create an 
epidemic of this type of excitement and activity and self-help.
    The Cherokee Nation has used NAHASDA in many other 
strategic ways to promote capacity building and housing 
opportunities. We fund Individual Development Accounts, or 
IDAs, that require matching the private savings of individuals 
dollar for dollar. We also provide materials only projects for 
low income individuals who need to rehabilitate their 
privately-owned house. We have trained and certified staff to 
eliminate lead-based hazards, lead-based paint hazards in the 
housing of low income Indians. We are utilizing a Rural Housing 
and Economic Development grant to establish a structural 
insulated panel, or SIT panel, manufacturing facility. All 
these initiatives and others will allow the Cherokee Nation to 
house more of the neediest.
    The Cherokee Nation has leveraged several resources, such 
as the Low Income Housing Tax Credit, to build several projects 
and we are the single largest user of the loan guarantees under 
Title VI of NAHASDA. We plan to aggressively market not only 
Section 184 loan guarantees, but also USDA's 502 program to our 
citizens.
    There are some issues that, if resolved, would better 
enable the Cherokee Nation to strategically address the housing 
needs of our members. These issues include improving or 
coordinating processes to allocate Indian Health Service 
Sanitation Facilities Construction funding; standardizing the 
environmental, or NEPA, process across federal agencies, and 
streamlining the residential leasing procedures through the 
Bureau of Indian Affairs. Stable, consistent funding and 
processes would allow us to more strategically use the very 
limited resources available.
    Another example of more effective utilization of resources 
is the Indian Community Block Grant. We could better plan 
housing, infrastructure development and economic opportunities 
if we received funding through an allocation formula like large 
cities do under the public CDBG or, for that matter, NAHASDA.
    I would like to also comment on NAHASDA formal allocation 
for funding and the use of the U.S. Census. The Cherokee Nation 
citizens and other Indians in our area are undercounted by 
whatever census classification or count, whether it be by 
single race or multiple race. However, Census information at 
this point is the only available information collected 
systematically in which we have confidence and the use of which 
has been determined through the negotiated rulemaking between 
tribes and the Department of Housing and Urban Development. The 
use of census information should be used as long as it 
approximates tribal citizenship. We believe that any other use 
of Census classifications, such as a restriction to only using 
a single race, becomes purely a race-based policy rather than a 
proxy or an index for citizenship in federally recognized 
tribes when the effect is to artificially underestimate the 
amounts of tribal citizens in an area. The use of the multiple-
race classification from the U.S. Census results in a more 
accurate estimate of the tribal citizens in our area, even 
though that number itself is undercounted.
    We support any system--I want to reiterate this--we support 
any system that is verifiable and reliable that best reflects 
the number of citizens of federally recognized tribes and 
Alaska Natives for specific formula areas.
    In closing, I would like to express our appreciation for 
the contribution of Congress, the attention of this committee. 
What you have done for the Cherokee Nation and other Indian 
tribes and your support of Indian Nation programs and self-
government and its self-determination are very valuable for our 
continued existence and our efforts to regain the dignity and 
status that we once historically held. Thank you very much.
    Chairman Ney. Thank you, Chief.
    [The prepared statement of Chadwick Smith can be found on 
page 174 in the appendix.]
    Chairman Ney. And Chairman Taylor.

      STATEMENT OF WAYNE TAYLOR, JR., CHAIRMAN, HOPI TRIBE

    Mr. Taylor. Chairman Ney, honorable members of the 
subcommittee, welcome, and thank you so much for coming to 
visit our homeland. My name is Wayne Taylor, Jr., and I am 
Chairman of the Hopi Tribe.
    My remarks today focus on the need to increase the 
opportunities for Hopi people to live in quality and affordable 
housing and to improve our participation under NAHASDA. In 
addition, I will offer my thoughts on some of the critical 
legislative and policy issues related to housing that require 
the attention of our Congressional delegation and Congress 
generally.
    By way of background, the Hopi people and their ancestors 
have lived in northern Arizona and the southwest in general for 
many thousands of years. Our ancestors' once thriving but now 
abandoned villages can be found throughout portions of Arizona, 
New Mexico, Colorado and Utah. In 1882, the United States set 
aside a small portion of our former ancestral home as a 
reservation intended as a permanent home and abiding place for 
Hopi. The Hopi village of Oraibi was a bustling community many 
centuries before the coming of the European explorers and today 
is recognized as the oldest continuously inhabited community in 
North America.
    Our reservation, some 1.6 million acres of land, is 
situated in the middle of the Arizona portion of the Navajo 
Reservation. The 12 villages of the Hopi reservation are within 
a two-hour drive of the non-Indian border towns of Flagstaff, 
Winslow and Holbrook. We are cross-town neighbors to the Navajo 
community of Tuba City. According to the most recent population 
data, the Hopi tribe has an on-reservation population of 8,000 
tribal members with another 4,000 members living off the 
reservation. The average household income for families in the 
Hopi communities is $26,553, which is almost six thousand, 
almost seven thousand less than the income for neighboring non-
Indian communities in Coconino and Navajo counties.
    The Hopi have a long history of housing development. As 
settled village dwellers, the Hopi built and maintained 
community development projects throughout thousands of years of 
their history preceding the founding of the United States. Hopi 
communities were designed and constructed not simply as 
shelters from the elements, but rather as places of safety and 
social cohesion. The Hopi village was a place where individual 
families could live comfortably, practice their agrarian 
economy, attend to their religious obligations and build a 
society that took care of their community members and offered 
them a clear direction toward future security and prosperity.
    Anyone visiting the Hopi villages today will see Hopi homes 
built by Hopi hands that have been passed down through family 
and clan inheritance for many hundreds of years. Generations of 
Hopi people have literally been born, raised, and passed on in 
Hopi housing built by their ancestors.
    Unfortunately, our ability to keep pace with the need of 
new housing through modern housing programs has not come close 
to matching the ingenuity and adaptability of our ancestors. 
Hopi people simply do not have sufficient quality and 
affordable housing to meet existing and projected needs. 
Housing is currently one of the greatest challenges facing the 
Hopi people. Housing development faces a number of challenges. 
Finding suitable locations for new housing can be extremely 
difficult because of our system of village and clan land 
holdings that restrict the building of new homes in close 
proximity to the historic villages and reserves much of the 
land for agriculture and religious practices. Of course, this 
is a matter within the political control of the Hopi Tribe and 
their villages and will have to be worked out according to 
those political processes.
    Our solution is to move new housing into areas not subject 
to such restrictions. However, in such locations, we face the 
difficulty of developing basic infrastructure, including water, 
sewer, electricity and roads and the lack of funds for 
construction activity. As our Hopi population grows and the 
demand for housing increases, we fear these problems will only 
get worse.
    The statistics related to affordable housing for the Hopi 
Tribe are disturbing and discouraging. According to the recent 
surveys conducted by the Hopi Tribal Housing Authority, there 
are 2,485 families living on the Hopi Reservation, of which 
2,043 are low income; 1,215 Hopi families live in substandard 
housing units, and nearly 691 families live in overcrowded 
conditions, usually sharing the same household with other 
family members.
    The same survey shows that 1,116 owner-occupied units and 
137 renter-occupied units under the HUD housing program, for 
total units of 1,253. The statistics for these 1,253 units are 
startling but not surprising. Of the 1,253 units, 436 are in 
standard condition; 337 require minor rehabilitation; 439 
require substantial rehabilitation, 29 are dilapidated and 
require replacement; and ten are of unknown structural 
condition. Financial assistance is badly needed to repair and 
rehabilitate 773 units and to rebuild 29 new units.
    The above statistics apply only to the Housing Authority 
Indian Housing Plan for 2004. How am I doing on time?
    Mr. Renzi. Wrap it up.
    Mr. Taylor. Okay. What are we doing about the current 
situation? A number of years ago, the Hopi Tribal Council 
approved a comprehensive values plan, and within this plan 
designed five new community sites to be located on the Hopi 
partition lands. One such site is the Tawaovi community. The 
new community of Tawaovi is located 15 miles north of Second 
Mesa along BIA Route 4, also know as Turquoise Trail. The 
Tawaovi community provides for mixed-use housing, commercial 
and industrial development, and other government facilities. We 
are working with the local housing authority to plan new 
housing for these communities. We need Congressional support to 
make the plans a reality.
    I have some recommended legislative and policy matters that 
we would like to have your subcommittee in Congress assist us 
with. They have been generally addressed already, so I will 
leave that as part of my written record.
    Chairman Ney. It will be accepted without objection.
    Mr. Taylor. Thank you.
    Chairman Ney. Thank you, Chairman.
    [The prepared statement of Wayne Taylor Jr., can be found 
on page 193 in the appendix.]
    Chairman Ney. I want to thank all of the panelists.
    Let me ask our ranking member, Ms. Waters, I'd like to ask 
a question about something we saw today. It's a generic 
question on behalf of us.
    I saw a hogan, and there was a power line. I could visibly 
see that power line, and the line was there, but it can't be 
connected. And it's due to a----
    Mr. Renzi. Arizona Public Service.
    Chairman Ney. Arizona Public Service, and then I think the 
Bennett Freeze. So the question I want to ask is, in my mind, 
what benefit is it when you can stand and see that power line 
and not be hooked up? It's not a matter of money, in my 
opinion. Let's say it costs five hundred dollars to hook it up. 
We say here is the five hundred, but it can't be hooked up 
because of the Bennett Freeze? Is that correct? Anybody like to 
answer that?
    Mr. Taylor. Mr. Chairman, Wayne Taylor, Hopi Tribe 
Chairman.
    What we are dealing with in certain parts of this area here 
are what is called the Bennett Freeze areas. This is currently 
in litigation and has been the subject of many court battles. 
It has been appealed to the Ninth Circuit and has been remanded 
now to the lower district court in Phoenix and we are awaiting 
some kind of a decision by the judge in that case. 
Unfortunately, that has been there in the courts for quite a 
long period of time.
    I would like to commend the leadership for the Navajo 
Nation. Starting with President Kelsey Begay, we began to have 
negotiations to try to settle this land issue so that we can 
unfreeze the so-called Bennett Freeze. When President Joe 
Shirley became the next President, we continued these 
mediations, and I am happy to report that we have now reached 
an agreement in principle on a compact that we will now be 
taking to Washington D.C. Where we hope that the Department of 
Interior would also sign off on this particular compact.
    We then will have a product that we can take to our 
respective tribal councils for ratification. This will address 
the unfortunate delays in getting people to get serviced.
    Chairman Ney. So does the Bennett Freeze prevent that power 
line from being hooked up today, or is it an arrangement you 
have to make between the two nations or between the two tribes?
    Mr. Taylor. What happens is any kind of development has to 
get--of course, it begins with the Navajo Nation. They go 
through their review process. Once that's concluded, then it 
goes to the Hopi Tribe because it's those lands that we have 
litigation over so we have to concur on these developments. And 
the development has to--the permit for these developments have 
to come through the Hopi Tribe. We have to concur before 
development can begin.
    And there is a process in place for that, and I would say 
that 98 percent of those requests that come to the Hopi Tribe 
are approved. It's just that it's a lengthy process.
    Chairman Ney. One thing that confused me. We reviewed the 
Bennett Freeze, which in 1961, Bennett was in Congress. But, 
for example, this was a unit that--ICE did a real good job of 
building this, you know, and helping the family. But if we are 
talking about development, that was built so--the actual home 
was built, so it's hard for me to understand why the line 
couldn't be hooked up because the actual home was built. Is 
there also a problem with Arizona Public, or power supplies? Is 
that another side? Let me try to make it more clear. I'm 
probably not making it clear enough.
    If it's a matter of development, why could the actual home 
be built but why couldn't the line come 20 feet into the home? 
If it's a matter of development of the Bennett Freeze, then the 
home shouldn't have been built. I'm just trying to rationalize 
it. I'm not blaming anybody, I'm just trying to rationalize it 
in my mind.
    Mr. Shirley. Chairman, members of the committee. One of the 
things that also is going on besides what Chairman Taylor has 
alluded to, the bureaucracy in getting power to homes because 
of the Bennett Freeze, there is also jurisdiction regarding 
power companies. We have our own.
    The Navajo Nation has its----
    Chairman Ney. The jurisdiction of what?
    Mr. Shirley. Power companies.
    Chairman Ney. Power companies?
    Mr. Shirley. Yes. Arizona Public Service is an entity 
that's outside Navajo land. The Navajo Tribal Utility Authority 
is the tribe's own power source. It hooks up electricity, 
power, water, sewer to homes. So, because of the Bennett 
Freeze, we have to also negotiate on the cost sometimes. And 
sometimes APS could come in and sometimes NTUA could come in 
for whatever reason. So that's one of the reasons why.
    Chairman Ney. Thank you. My time is up. I will yield to our 
ranking member.
    Ms. Waters. Thank you very much, Mr. Chairman.
    I would like to thank our panelists for being here today. 
I'm particularly pleased to see and meet the leadership of not 
only the Navajo, but the Hopi.
    And I am looking for some guidance. I need you to tell this 
panel what your priority suggestions would be for helping to 
remove some of the barriers, whether that is with lending 
agencies, Congress cutbacks, administration cutbacks, or with 
tribal court cases or the Bennett Freeze that's been talked 
about.
    Now, as I understand--let me just backtrack a little bit. 
As I understand, it appears that the courts--the Bennett Freeze 
settlement is now in the hands of the court.
    Mr. Taylor. Correct.
    Ms. Waters. But you also indicated that the tribes were 
getting together in addition to what the court is doing.
    Should you reach an agreement or settlement prior to the 
court finishing its work, would that take precedence over the 
courts and then the court would no longer have to be involved 
in this decision? Mr. Taylor
    Mr. Shirley. It is my understanding, Miss Waters, the Hopi 
Nation, working with the Navajo Nation, is trying to come to an 
agreement where we are going to put an end to the litigation. 
And once we reach agreement, hopefully, for everybody, that 
will happen. And then from there, infrastructure and housing 
will start going into Bennett Freeze.
    Ms. Waters. So you're saying that a settlement between the 
tribes would supersede the court work that's being done now so 
you may not have to wait for another year or six months on a 
court decision? Is that correct?
    Mr. Taylor. Congresswoman Waters, the case is in the lower 
district court, as I mentioned, and we have been waiting for 
the judge to make some kind of a ruling on this particular 
case, but that, unfortunately, has not been forthcoming for 
quite a long time.
    So that was what prompted the two tribes to begin to talk. 
And what we have done is we have asked the courts to assist us 
in this effort, and they have assigned one of the judges from 
the Ninth Circuit court and so that judge is helping to mediate 
between the two parties.
    So once the--all the parties have signed on to the 
agreement, then that will end this case.
    Ms. Waters. That's great and that's very encouraging. We 
visited a location today where an elderly woman was living in a 
very substandard housing situation because her home had burned 
down and she could not replace it because of the dispute. So 
this would be wonderful if the tribes can reach an agreement, 
and we would certainly encourage, encourage, encourage you to 
do that. And I suppose once that's done, that would help to 
move the issues of housing development in some very profound 
ways.
    If I have time, Mr. Chairman, the next thing I want to know 
is what can we do, what do you suggest that we do with the 
financial services community? What would you say to banks and 
financial institutions about providing loans and mortgages to 
families when they say that they can't do it or it's very 
difficult for them to do it because there's a lack of ownership 
by individual families to own trust land and there is not a lot 
of income by Indian families for collateral? Do you have any 
suggestions or any ideas about what we can do? What could we 
say to those financial institutions?
    Mr. Shirley. Chairman and Ms. Waters, let me defer that 
question to my technical person, who is also the chief 
executive officer of the Navajo Housing Authority, Chester 
Carl, to help me answer that question.
    Ms. Waters. Yes. Please identify yourself for the record.
    Mr. Carl. Thank you very much, Congresswoman Waters and 
Chairman Ney, and, of course, Congressman Renzi and Congressman 
Matheson. Thank you for the opportunity to ask these questions.
    One of the barriers that we see is related to possibly the 
enforcement of the Community Reinvestment Act. Currently, on 
the Navajo Nation, we only have five banking facilities, while 
on the streets of Washington D.C., you'll find five banks in 
one block. And because of the lack of investments, Navajo 
opportunities of every American dream to establish 
homeownership is not possible.
    So, because of those challenges that we face, a lot of 
times banks are able to post an acceptable score in using other 
neighboring communities on how they invest their money in 
Indian country. So as a committee empowered with that 
authority, we would like for you to look at how community 
reinvestment works in Indian country.
    The second part of that is there's been a lot of discussion 
on Section 184. When Section 184 was implemented, it was a 
dream to allow opportunities to Native Americans who were not 
at the acceptable level for conventional loan programming. 
Somewhere along the way through the bureaucratic process, it 
became where you almost had to be goldplated in order to get a 
loan through the Section 184 program. When we started the 
program, the approval was done at the field offices of the 
Native American program, and eventually that got centralized to 
the national office and it became problematic, so it hasn't 
been at a level where it should be. So the recommendation would 
be possibly move it back down to the field offices because we 
work with those offices hand-in-hand and one-on-one, and we 
will try to work with those programs as well.
    The third part of that is the BIA. You noted that the BIA 
is not at the table. Part of that is a recommendation for 
procedures, and there is a commission that's been established 
called the Land Title Commission by Congress, and if we could 
fast track that and have that commission go into effect so we 
can start to get some of these issues resolved, then, through 
sovereign rights of tribes, to establish a title plan with the 
tribe and BIA for those functions.
    Ms. Waters. Thank you very much. Those are very concrete 
recommendations and I'm sure that our members of Congress 
representing the area can move on those kinds of 
recommendations to remove some of these barriers. And of 
course, if they don't, their friends will nudge them. All 
right. Thank you.
    Chairman Ney. Thank you. Gentleman from Arizona, Mr. Renzi.
    Mr. Renzi. Thank you, Mr. Chairman.
    Chairman Kitcheyen, in your testimony, you spoke about 
infrastructure needs. You also mentioned the fact that if we 
build 125 homes a year for the next ten years, we would only 
begin to meet the current housing need.
    What is the number one impediment at San Carlos Apache that 
doesn't allow the, this generation to purchase homes? What is 
the number one impediment you're finding?
    Ms. Kitcheyen. Currently, the number one barrier is the 
fact that over a year ago, the tribe submitted to HUD 
environmental reviews. And because they are so slow in doing 
their job, we are two years behind in spending our dollars.
    Mr. Renzi. Tell me a little bit about that submittal, 
please. It was to the HUD for environmental review.
    Ms. Kitcheyen. Okay. There's two projects, Congressman, 
that we did. And I'm not sure how many homes we're talking 
about, but I'm sure that, I think it is about two housing 
units, so that would be four, and they are behind, like I said. 
And right now that's the current barrier. We need to use those 
dollars, and we just don't, you know, we waited--and what we 
would need is for the government to give more leverage to the 
southwest office in Phoenix so they can have the additional 
support to speed up that process.
    Mr. Renzi. Thank you. We have officials here on the second 
panel who will be testifying. He is the Under Secretary for 
Public and Indian Housing, and I want to be sure that Michael, 
when he does come up, heard your words, particularly the fact 
that you have two projects that are ready to go, we just need a 
little bit of help.
    President Shirley, you also spoke and devoted much of your 
testimony towards, also, a need at HUD. What would you like to 
see--and, again, forgive me for asking you to repeat, but just 
encapsulate as it relates to the census issue. What would you 
like to see the solution being? You can speak directly to the 
HUD people who are here listening to your voice right now.
    Mr. Shirley. My testimony surrounds the multi-race, the use 
of the multi-race data, and we feel that it's outside of 
federal law. I guess what I would like to see is getting back 
to federal law where you work with tribal members to get who is 
a member of tribes, who is supposed to be benefitting from the 
allocations for housing from the federal government. That would 
be my recommendation.
    Mr. Renzi. I also want to call attention and thank you for 
your leadership, along with Chairman Taylor, on the Bennett 
Freeze issue. I know no one together has worked as tireless as 
you two guys have to come up with what is on the verge, I 
believe, of a beautiful compromise.
    Finally--yes. That deserves some recognition. It really 
does.
    President Shirley, you have been looking for creative ways 
to build your own payroll. Monies are being spent on 
surrounding communities. Can you quickly help us understand 
what we need to do in order for that dollar to stay on Navajo 
lands so that it will be recycled and how that would affect 
your people.
    Mr. Shirley. We need economic growth returned. And right 
now, the Navajo Nation has as one of its initiatives to develop 
a small business sector of Navajo Nation economy, and that 
would involve bringing in big boxes like Wal-Mart and Super 
Target to create jobs, create additional revenues. If we can 
create jobs here, that's revenues that will flow within the 
Navajo land and out of the border towns.
    Mr. Renzi. By creating the jobs, you are going to have the 
ability to borrow and have the credit and ability to lend.
    Finally, as far as the White Mountain Apache are involved, 
sir, thank you for coming and filling in for Chairman Massey. 
We were able to accomplish together a project that both the 
governor's office, the State, as well as the federal 
government, this facility called Apache Dawn. It was one of the 
first areas where we were able to lend money, to get the Home 
Loan Bank out of San Francisco, through an Arizona bank, to 
lend money to you all.
    And I think the issue came down to--obviously, traditional 
lenders won't lend because of the sovereign land. They won't 
attach collateral to sovereign land. This is one of the big 
issues as it relates to the traditional lending arms of a 
commercial facility looking at attaching to sovereign land. 
They don't do it.
    Can you quickly tell the people here how you were able to 
overcome that obstacle and how this model has become a model 
for, I believe, many of the Native American people around the 
nation?
    Mr. Winfield. One of the things I would like to express to 
the committee here is that I think White Mountain Apache Tribe 
has been really looking forward for some great opportunity, and 
I think that they came when the national President expressed 
about these kind of projects, and we got into the picture and 
we entered, got ourself into it to the point where we decided 
to go after some of these projects. So I have a young lady from 
the housing program with me so I will let her express, explain 
this thing. I would like to call Miss Yazzie to come over.
    Mr. Renzi. State your name for the record, please.
    Ms. Yazzie. My name is Aneva Yazzie. I'm a management 
consultant to the White Mountain Apache Housing Authority.
    In response to your question, Congressman, what we have 
utilized in order to make this whole transaction possible was 
to take advantage of HUD's federal loan guarantee programs 
offer under the Section 184 program, as well as HUD's Title VI 
loan guarantee program to overcome--to minimize financial 
institutions' risk on reservation land for the White Mountain 
Apache Tribe.
    So in that regard, we were able to put in the underwriting 
with the various bankers, Bank One, Countrywide Home Loans for 
the Apache Dawn program, and then the WIFA state agency as well 
is a qualified lender.
    Mr. Renzi. So to get those financial organizations to lend 
money to the Apache Nation, and they can't collateralize the 
land, did we post a bond to collateralize? What collateral did 
you all provide to make them comfortable with lending the half 
million dollars you got in order to finish the infrastructure?
    Ms. Yazzie. What collateralized under that bond 
underwriting process was the Section 184 loan program. Let me 
explain that process real quickly and as simply as I can.
    What we have done is we have utilized HUD's 184 loan 
program to get the construction loan for each home that was 
built with Bank One. I'll name the financial institution that 
we partnered with. Bank One then, in turn, sold the mortgage 
loan to a loan servicer, Countrywide Home Loans. Countrywide 
Home Loans then, in turn, pooled those loans into a Ginnie Mae 
security. The Ginnie Mae security then was sold to the bond 
trustee. In this case, the bonds were sold, which they held the 
notes to pay the investors.
    Mr. Renzi. So that creative financial instrument was then 
able to allow and effectuate how many homes at Apache Dawn?
    Ms. Yazzie. We initially planned 250, but we are building 
now 317 homes for $25 million.
    Mr. Renzi. 317 homes, new homes, as a result of this 
creative financing.
    Mr. Chairman, I see my time is up. I want to thank you very 
much. Chairman Taylor, I didn't get a chance to ask my question 
of you, but we'll talk later.
    Thank you, Mr. Chairman.
    Chairman Ney. Thank you. The gentleman from Utah.
    Mr. Matheson. Thank you, Mr. Chairman.
    I have to say this panel, in reviewing their testimony, has 
offered a number of specific recommendations. I'm very 
impressed with the quality of the testimony. I think it gives 
the committee a lot to cue on and consider. I've sat in on a 
lot of congressional hearings in my short career, and this is 
very impressive in terms of your testimony. I appreciate that.
    A couple things I wanted to ask about. First of all, there 
are a number of impediments. There is no simple answer to these 
issues. We have talked about the problem with the trust and 
tribal lands, the lack of infrastructure in terms of water, 
electric, roads. We have talked about working with federal 
bureaucracies. I understand that there are a number of 
challenges here, but there is another one we haven't talked 
about too much, and that's the overall funding level. And, as 
you know, there is a concern about the budget, consideration 
going on in Congress right now what the funding levels are 
going to be and if they are going to be cut or not.
    I hear it's going to take, from Mr. Taylor's testimony, 123 
years to meet current demands. And I assume that's because 
right now, based on the funding stream coming to you, that's 
what it equates to, 123 years to meet your current demand.
    Mr. Taylor. That's correct, Mr. Congressman.
    Mr. Matheson. He said yes. I'll answer for him.
    What I hear from the San Carlos Apache is that you have to 
build 125 homes a year for ten years? Is that a rate that you 
are achieving right now with the funding stream you've got.
    Ms. Kitcheyen. No, sir.
    Mr. Matheson. What rate----
    Ms. Kitcheyen. It's not what we're achieving right now. 
Currently, we have 2,400 families on the reservation that need 
homes, and 39 percent of families live in substandard housing. 
And we also have 40 percent of families that live in 
overcrowded conditions. Ninety-four percent of 3,067 total 
families are considered low income under NAHASDA.
    So what we need is more money committed to build homes on 
the Indian reservations.
    Mr. Matheson. I don't want to oversimplify. I said at the 
start of my comments you can't oversimplify. And just more 
funding is not the only solution here, but I think we need to 
put that issue out as one of the variables we ought to be 
talking about. We ought to talk about the fact that the budget 
considerations in Congress right now, I do not think are 
adequate. This majority would probably agree with that comment.
    I wanted to switch to Chief Smith. You mentioned in your 
testimony how the Cherokee Nation is the largest user of the 
loan guarantees under Title VI of NAHASDA, and you're actually 
looking to expand it because relatively few tribes outside the 
Cherokee Nation have been taking advantage of this program.
    What is it that has allowed you to take advantage of this 
program in such a successful way.
    Mr. Smith. Probably the necessity of the moment. The 
funding by the government is very marginal. We have to be very 
creative and aggressive. We have had the cooperation of the 
local banks and HUD and other agencies. We borrowed $50 
million. We anticipate it's going to build 550, 600 houses. We 
have already got 400 on the ground.
    Mr. Matheson. I would just suggest it sounds to me there 
may very well be a lessen to be learned in terms of your 
relationship, you said with your local banks and whatnot, that 
other tribes could benefit from as well in terms of this 
program. I think that's another piece of information not just 
for us, but for the other folks on the panel. That's a good 
lesson we could take some advice in.
    One more question I have on the trust status of lands and 
its impediments to moving forward. I read in one of my pieces 
of material that I was provided to prepare for this meeting 
that under the current backlog with BIA title searches, that 
there is a 113-year backlog.
    How are you ever going to make progress on your housing 
shortages with that kind of backlog? Maybe there is no answer 
to that, quite frankly, but tell me if that's a significant 
issue in trying to make progress in the housing. And I'm asking 
no one in particular, but how is that affecting you when you 
have BIA that slow in doing the title searches?
    Mr. Shirley. Right now, that's--you're right, Congressman 
Matheson, that the BIA just hasn't been there for tribes. In 
our case, the Navajo Nation, right now we are trying to go 
through a reorganization, trying to just get at that. They 
should have gotten that fixed decades ago. And right now it's a 
big hinderance because of the lack of their progress, or the 
lack of being there for tribes. And all I can say is that 
because of them, my gosh, on Navajo land not only are we behind 
on improving housing, but we are behind by $435 million.
    Mr. Matheson. I know my time is up, but one last question.
    In terms of this trust land status and how it's been an 
impediment to you making progress on the Navajo Nation in terms 
of housing--and I know this hearing isn't specifically about 
housing, but is that also affecting you in terms of moving 
forward, in terms of commercial development and economic 
development within the Navajo Nation as well?
    Mr. Shirley. Yes, it has. In terms of leasing, same with 
Congressman Renzi addressing collateral and borrowing money, we 
can't put up the land as collateral to borrow money. That has 
been one of the biggest impediments.
    And, also, because of trust land status, the BIA has to 
have a hand in every business that is leased. And right now, we 
are trying to lock up on the loans to get away from that. If we 
could do our own leasing, I think that would go a long way 
towards putting economic development on the fast track.
    Mr. Winfield. I would like to express a few items that were 
brought up about the need of housing.
    Today in the United States there is 500 Indian tribes that 
the unmet needs are so great that what you brought up, 113 
years possibly to catch up. I am involved in the National 
Budget Tribal Committee with the western region. There is 12 
Indian tribes throughout the United States that have been 
putting the 2006 budget together. And the last two, three weeks 
ago, we were back in D.C. And sat with the committee and the 
Department of Interior to start on a financial budget for 2006.
    Just to let the public be aware, United States BIA tribal 
prioritized budget allocation for 2006, we are going to see 
$253 million budget cut for Indian tribes throughout the United 
States. For 2005, we experience over $50 million budget cut 
already. So, through the President of the United States, we 
have experienced for 2005-2006 a big, major budget cut for 
Indian country. And we are trying to request for top priorities 
on the allocation, and on the list, housing is one of them that 
is a main need. But we are continually seeing ourself being 
involved in budget cut from Department of Interior.
    We don't know how we're going to see ourselves in another 
so many years, 2007, how our budget will look, but 2006, it 
hurts to see $253 million budget cut for United States Indian 
tribes, twelve region, 500 Indian tribes. You are involved in 
the committee is great for housing. That's the greatest thing. 
We even put the Housing Improvement Project, they call it HIP, 
into our top priorities, and that has hit a major cutback 
already, too, from the BIA.
    So talking about HUD here, HIP is getting major cuts and 
we're hurting. Indian tribes is hurting. Your visit to Navajo 
Nation, if you visit the whole 500 Indian tribes, you would 
come to a similar housing need for Indian people. So, you know, 
I hope that this meeting will come to something very special 
and major so that one day we can see improvement in Indian 
country because of great equal housing.
    Like the San Carlos Chairwoman said, 2,000 plus need; White 
Mountain is about, somewhere close, near the same number for 
our people. Thank you.
    Mr. Matheson. I appreciate that.
    Ms. Kitcheyen. Chairman Ney, if I may, please. I forgot to 
include this as part of the formal testimony. I'd like to enter 
it at this time, please.
    Chairman Ney. Without objection.
    Ms. Kitcheyen. Thank you.
    Chairman Ney. Let me just note in closing this panel that 
we need to--and, unfortunately, the BIA is not here today. 
Another thing we need to do between now and then.
    I wanted to state that this brings up some issues, and 
although all of us value housing, these new bits and pieces of 
things work more correctly when you start to look at other 
areas where housing is done. For example, in my area, how 
housing is done now, there's the trust, the deed, a variety of 
factors.
    But it also seems that if monies go through HUD, some 
monies go through BIA, some monies through veterans, they are 
going to come to a log jam at every point involved in the BIA. 
And what is going to happen is, if you want to talk about 
budgeting, is people in Washington that deal with budgets are 
going to look at and it say, well, the money was given to the 
Indian community but they didn't use all of it so, therefore, 
the money is coming back that wasn't used.
    And you can understand that. That's part of the process of 
thinking. I'm not saying it's always correct, but that's part 
of the process of thinking.
    I think also, I'd like to know as the monies come out where 
they go, what holds it up. So, obviously, if there is a 113-
year log jam, we have a problem with--magically, today, if 
there was enough money to build homes--getting titles. So I 
think we need to look at that.
    I want to thank the great panel. You have provided a lot of 
information. You have done a lot of good today. After 
listening, I understand, and I'm also a little confused, which 
is not bad. It makes us ask more questions. So I want to thank 
the panel.
    We will move on to the second panel.
    [recess.]
    Chairman Ney. The hearing will come to order if it could, 
please. We will now continue with panel two. Please take a seat 
and we will go on with panel two.
    The first person to testify for panel two is Gilbert 
Gonzalez, Jr. Gilbert Gonzalez, Jr. is the Acting Under 
Secretary for Rural Development, the U.S. Department of 
Agriculture. He oversees three agencies--if we can come to 
order, please, so we can hear the second panel, which is 
important. Can we come to order. Okay, you're being tougher 
than Congress is. If we can please come to order.
    Mr. Gonzalez oversees three agencies, the Rural Business 
Cooperative Service, the Rural Utilities Service and the Rural 
Housing Service that together provides $14 million annually in 
grants, loans, and technical assistance to rural residents, 
communities and businesses.
    Mr. Gonzalez has been active in banking, housing and 
economic development efforts in the State of Texas. He was the 
founding President of the Community Development Loan Fund, a 
for-profit loan and development corporation, a collaborative 
effort between the city of San Antonio and 21 banks. The 
corporation served the credit needs of small minority-owned and 
women-owned businesses in San Antonio.
    Michael Liu is the Assistant Secretary for Public and 
Indian Housing at the U.S. Department of Housing and Urban 
Development. He oversees the administration of all public 
housing, Section 8 rental systems, and Native American 
programs. Programs are comprised of over 60 percent of the 
housing budget, over $30 billion.
    Prior to his assuming his position at HUD, Mr. Liu served 
as a managing committee member for the Federal Home Loan Bank 
of Chicago.
    We want to thank both gentleman for coming the distance 
here to Arizona and we will start with Mr. Gonzalez. Thank you.

 STATEMENT OF GILBERT G. GONZALEZ, JR., ACTING UNDERSECRETARY 
    FOR RURAL DEVELOPMENT, U.S. DEPARTMENT OF AGRICULTURE; 
     ACCOMPANIED BY ED BROWNING, STATE DIRECTOR FOR ARIZONA

    Mr. Gonzalez. Thank you, Chairman Ney, members of the 
Committee, for the opportunity to discuss how USDA Rural 
Development is working to support housing opportunities for 
Native Americans.
    But before I proceed, I would like to introduce our State 
director for Arizona, Eddie Browning, and some of our Native 
American and housing specialists.
    It is personally gratifying for me to lead a team of 
professionals who work every day with families and communities 
of various Native American nations and other rural areas and to 
see and hear how Rural Development programs are impacting the 
lives of people living in rural areas.
    Mr. Chairman, the housing programs authorized by this 
subcommittee are changing lives and are bringing new hope where 
it didn't exist before. Rural Development is proud to be part 
of this effort to increase housing opportunities for Native 
American families. We are also proud of our commitments, to 
assist families and communities with overall economic and 
community development needs.
    Rural Development is essentially a large bank with an $86 
billion loan portfolio. Our mission is to increase economic 
opportunity and to improve the quality of life for all rural 
communities. Our vision is to be a catalyst and to help rural 
communities to diversify their economics and to increase the 
flow of capital for homeownership, for entrepreneurship and for 
infrastructure.
    Homeownership is the oldest form of building equity. Rural 
Development has seen a 20 percent increase in single family 
housing direct loans to Native Americans over the last three 
years. In our single family housing guarantee program, we have 
seen nearly a 50 percent increase.
    Supporting existing housing: For example, the families in 
Le Chee have received repairs and renovations that have brought 
new ``luxuries'' that we take for granted, such as indoor 
plumbing, electricity, et cetera.
    Other housing opportunities: The White Mountain Apache 
multi-family housing complex was dedicated last Thursday. It 
has 22 units that will provide decent, safe, and affordable 
housing. Displayed to my right is the multi-family project that 
I am describing. And, obviously, there is a celebration with 
the Crown Dancers, celebrating the grand opening of that multi-
family project.
    Entrepreneurship is the economic engine of the U.S. 
economy.
    Rural Development invested $31 million in grants and low 
interest loans for local revolving loan funds for individual 
business startups and expansions, and 16 business loan 
guarantees.
    The third leg of economic development for rural areas is 
infrastructure, and I want to cite one example of what we are 
doing in rural America. Our broadband program and other 
technologies are bringing and providing rural communities the 
ability to compete domestically and globally.
    An example of this is our distance learning and 
telemedicine program and our broadband program. Both bringing 
economic opportunity and quality of life for those in rural 
communities. The Wellpinit School District on the Spokane 
Indian reservation, which serves 450 students K through 12, is 
one of the examples where we provided assistance. Several years 
ago, the school district was concerned with dropout rates of 
the students. Becoming aware that they lacked access to a 
variety of classes their students needed, they decided they 
needed to create global classrooms where students have access 
to educational opportunities worldwide in a job corps training 
center. They applied for and received a distance learning 
telemedicine grant from Rural Development to help create these 
classrooms and training facilities.
    Since then, they have received a second distance learning 
telemedicine grant. This past year, the school district had a 
100 percent graduation rate, and all 13 graduates went on to 
attend college. As a group, they received nearly a half million 
dollars in scholarships.
    Secretary Venaman announced in May 2003 $20 million in 
grants to support additional advances in technology and 
broadband. Of that, eight million is going to support Native 
American ventures, three here in Arizona, for over $760,000.
    Coming from the private sector myself and coming to the 
government, there definitely is a lack of coordination. 
Successful economic development requires working together, 
cooperation, coordination with federal and private sector 
partners, and more importantly with educational partners.
    Many who are present here today, Fannie Mae, the banks like 
Wells Fargo, credit unions and others, Rural Development in the 
past two and a half years has partnered with HUD, the Small 
Business Administration, Treasury, CDFI program, Congress, its 
EDA program and HHS, just to name a few. Banking partners in 
my, in my experience are capital providers who will bring 
economic opportunity to rural communities.
    Since the beginning of the Bush Administration, we have 
utilized in Rural Development 40 plus programs administered by 
Rural Development to invest over $37 billion to support local 
economic and community development efforts, investments that 
will improve overall living and economic conditions in rural 
communities, including communities in the nations represented 
here today.
    Our philosophy is that it's all about local ownership and 
local control, and when local leaders drive these 
opportunities, businesses flourish, more families become 
homeowners, access to health and educational services are 
improved, and the community as a whole begins to reap the 
benefits. The Bush Administration has been working hard with 
American Indian, Alaskan Native tribes, tribal communities, 
tribal organizations and individuals to provide a greater 
understanding of the investment opportunities available and 
assist with guidance on how to access Rural Development 
financing.
    Since the beginning of the Bush Administration, Rural 
Development has doubled the investments made to Native American 
communities. In fact, Rural Development has provided nearly a 
quarter of a billion towards this effort; every year, setting 
new records and providing financial assistance for housing, 
community facilities, economic development, and infrastructure.
    To my far right is a second set of graphs that shows in 
2001, Rural Development provided $177 million in Native 
American communities. In 2002, we provided $191 million in 
Native American Communities. In 2003, Rural Development 
invested about $234 million in rural investments in Native 
American communities.
    Mr. Chairman, your hearing today provides us with an 
opportunity to share with you and members of the subcommittee 
ways in which we are administering Rural Development programs 
to maximize federal resources with other federal, tribal, state 
and local government and private sector partners, as well as 
individual investments to supplement the resources provided 
through Rural Development. This becomes particularly important 
as we seek to reach more communities and individuals.
    I believe we are making progress, but I also believe we 
must continue to find new ways to do more. I have shared in my 
written testimony many of the successful efforts we have 
undertaken over the past three years, particularly in support 
of Native American families and their communities.
    Mr. Chairman, I am happy to answer any questions you may 
have at this time.
    Chairman Ney. Thank you, Mr. Gonzalez.
    [The prepared statement of Gilbert G. Gonzalez Jr. can be 
found on page 86 in the appendix.]
    Chairman Ney. Mr. Liu, to you.

 STATEMENT OF HON. MICHAEL LIU, ASSISTANT SECRETARY FOR PUBLIC 
   AND INDIAN HOUSING, U.S. DEPARTMENT OF HOUSING AND URBAN 
                          DEVELOPMENT

    Mr. Liu. Mr. Chairman, members of the committee, thank you 
for inviting me to this very important hearing on improving 
housing for Native Americans. My name is Michael Liu, and I am 
the Assistant Secretary for Public and Indian Housing, 
responsible for the management, operation and oversight of 
HUD's Native American programs. These programs are available to 
562 federally recognized Indian tribes. We serve these tribes 
directly or through their tribally designated housing entities 
by providing grants and loan guarantees designed to support 
affordable housing and community and economic development 
functions.
    Tribes are improving housing conditions for their members. 
This momentum needs to be sustained as we continue to 
collaborate to create a better living environment for these 
families.
    At 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 Alaskan Natives.
    Over the seven years that funding has been made available 
under the Native American Housing Assistance and Self-
Determination Act, NAHASDA, over $4.4 billion has been 
appropriated through HUD to try to get tribally designated 
housing entities to provide decent, safe and affordable housing 
throughout Indian country. During this same period, HUD's 
Indian CDBG program helped address the economic development, 
infrastructure and community development needs of federally 
recognized tribes with $485 million in funding.
    The Section 184 loan guarantee program, which made its 
first loan in FY '97 has guaranteed over 1,500 loans worth more 
than $151 million. The program provides the answer for many 
families, tribes, and TDHEs who want to obtain home mortgages 
on trusts or restricted lands, as well as fee lands where there 
is a service area or area of operation that has been assigned 
to the tribes. These are places where private market lenders 
never did business before.
    The Title VI program allows the tribe to jump start and 
enhance its housing programs with federally guaranteed loans. 
Loan guarantees amounting to $77 million are in place under the 
Title VI program. I encourage you to review my written 
testimony which begins by briefly outlining our programs, going 
over the numbers in the FY '05 budget request, and then 
discusses an issue that I want to focus in on today: The large 
credit authority balances and our loan funds and how we are 
working aggressively with tribes and lenders to get much needed 
capital into Native American communities for homeownership.
    We have two loan guarantee programs that I touched on a 
moment ago. I would like you to consider them when you think 
about homeownership. The Section 184 Indian Housing Loan 
Guarantee Program certainly is in line with one of the 
administration's highest priorities, and that is creating more 
homeownership for America. While 70 percent of all American 
households own their own homes, the number is significantly 
less for Native Americans, especially for those on the rural 
trust lands that constitute most Indian reservations.
    Section 184 provides a 100 percent guarantee for loans to 
income eligible and creditworthy Native American families, 
Indian tribes, or their tribally designated housing entities. 
Borrowers can purchase, construct, or acquire single-family 
homes on Indian trust or restricted lands, land within the 
service area of an IHBG grant recipient, and in other 
designated Indian areas.
    The reluctance of banks and lenders to engage in mortgage 
lending on trust land prompted creation of the program. It has 
made homeownership a reality for many Native American families. 
The 100 percent guarantee, combined with lower closing costs, 
is attractive to both lenders and borrowers, and if used on 
trust lands, tribes must have a functioning tribal court system 
or enter into an agreement with another ajudicatory entity and 
enact ordinances covering foreclosure, eviction, and related 
matters.
    A direct result of the program is it provides an 
opportunity for lower and moderate income families living on 
reservations to move from subsidized housing units and thus 
freeing up that housing for use by low income families.
    The GAO, in 1997, pointed out that from 1992 to 1996, only 
92 conventional home mortgage loans were closed on tribal 
lands. Half of those were on a reservation where the tribe 
owned the bank. As I mentioned earlier, working with now nearly 
over 200 lenders, including Wells Fargo, Bank One, US Bank and 
Washington Mutual, among many others, including small banks, 
HUD has assisted over 1,500 families with their housing needs 
by guaranteeing mortgages where others would not.
    Section 184 loans have been sold to 18 entities, including 
two Federal Home Loan banks, Fannie Mae, Freddie Mac, 
Countrywide, M and T Mortgage, and the Alaska, New Mexico, 
North and South Dakota state housing finance agencies. Both the 
Navajo Nation and the White Mountain Apache tribe are active 
184 borrowers. They have developed several projects using 184, 
including Carigan Estates in St. Michaels, which is near Window 
Rock, and the Apache Dawn project which you have heard about 
this afternoon.
    On the Title VI guarantee program, we are focusing on 
developing and strengthening reservation economies on a larger 
scale than just purely housing. Through this experience, we 
realize that tribes need more access to banks and other 
financial institutions.
    One of the best ways to gain access and foster this 
relationship is to look at leveraging public funds with private 
investments and gain greater economic benefit. The Title VI 
program is available to Indian Housing Block Grant recipients 
in need of additional funds to engage in affordable housing. A 
private lender investor provides the loan and the government 
guarantee ensures repayment in the event of default. If there 
is a default, the government will seek repayment through the 
borrower's IHBG funds.
    Title VI projects are usually larger, more sophisticated 
endeavors, using a variety of funding sources, but that is not 
a program requirement.
    Loan guarantee funds and the balances and initiatives. I 
have directed the Office of Native American Programs to focus 
attention on how to improve participation in both the 184 and 
Title VI programs. ONAP will accelerate its outreach to 
lenders, tribes and TDHEs and more aggressively market the 
programs. We have significantly increased our loan guarantee 
training sessions and included segments about them in other 
trainings and other public events whenever possible. At every 
available forum, I am educating the public about the programs 
and inviting whoever is interested to come and talk to HUD 
about how the program works and how to improve the program to 
make it more user friendly.
    But those millions of dollars will not be available for an 
unlimited time. I'd like to address just for a moment now the 
proposed cancellation of these loan programs.
    The Department proposes to cancel unused credit subsidy 
totalling approximately $54 million which has accumulated in 
the----
    Chairman Ney. I'm sorry. What was the amount?
    Mr. Liu. $54 million in credit subsidy which has 
accumulated over the past five years.
    These proposed cancellations will enable us to preserve 
full funding in our '05 budget at the '04 request levels for 
all Native American programs. The rescissions will not occur 
until the end of fiscal year '05. Any unused credit subsidy 
that has been committed by that time will not be rescinded. We 
ask all here who are interested, we want to use them so that we 
don't lose them.
    In conclusion, sir, HUD respects and supports the progress 
being made by tribes and their TDHEs in providing affordable 
housing to Native American communities.
    This concludes my remarks, and I stand happy to respond to 
any questions from you or your members. Thank you.
    [The prepared statement of Hon. Michael Liu can be found on 
page 139 in the appendix.]
    Chairman Ney. I want to thank both gentlemen for your 
testimony.
    Let me just point out a couple of things. Of course, much 
of the Native American land is held in trust--before I do, let 
me ask one question of Mr. Gonzalez.
    When you are assisting with housing, or programs on Indian 
land, do you also at the end of the day have to have the BIA 
involved the same way as HUD would?
    Mr. Gonzalez. I've got some of our technical staff, but I 
would say in perfecting our liens and deeds of trust, the BIA 
does play a role in terms of title processing.
    Chairman Ney. There are issues about the trust, the trust 
status, the type of economic activity sometimes that can be 
allowed on Native American lands according to some reports, so 
I wonder how that affects either one of your abilities.
    Also, the inspector general report states several things. 
It says when projects are assisted by multiple programs, there 
are conflicting admission requirements. So if you're one 
department, the veterans perhaps have some money for housing, 
USDA, HUD, BIA. So this report says when they are, again, 
assisted by multiple programs, there is conflicting admission 
requirements. So one would require, you know, more for 
admission than another.
    Also, it goes into the TDHEs. Now, as far as the TDHEs, it 
says something about some of their unfamiliarity with the 
NAHASDA requirements. So the nature of my question, I guess, is 
this--and, of course, that's no different than the public 
housing authorities that will run into some problems. And HUD 
has to work--you know how the system works with the housing 
authorities.
    With regards to the BIA and this backlog, and obviously you 
issue X amount of millions of dollars which has not been spent 
so therefore, eventually, we all know what's going to happen. 
It's going to be taken. Having said all that, is there 
something that Congress needs to do to sit down with all the 
parties involved, whether it's the veterans, whether it's the 
USDA, HUD, and BIA, or can this be done by internal rulemaking 
authority, or can Congress sit down and somehow be able to work 
with you all to make this work for the better?
    And I'm aiming at what's been testified to as a backlog by 
BIA. Does something need to be done, or will it work out, or--
any opinions?
    Mr. Gonzalez. Let me just make some observations, Mr. 
Chairman. The President's Initiative on the blueprint for the 
American dream is truly designed to increase minority 
homeownership by 5.5 million by the end of this decade. I think 
what that did is collectively bring the agencies together, 
USDA, HUD, and housing programs like the VA and any other 
agency, FDIC, to provide that counseling and actually bring 
these agencies together to try to address what are some of the 
barriers and obstacles to homeownership.
    And I'd say at this point that we are seeing some tangible 
results there. I think in this case, I think what we need to do 
is actually work with BIA, work with David Anderson, and try to 
remove some of these barriers to homeownership on the Native 
American lands.
    Mr. Liu. I certainly can't speak on behalf or for the 
bureau. I will echo some of the comments of Mr. Gonzalez in 
regards to this I think we are having some success in certain 
regional offices with BIA where we have seen some best 
practices from other parts of the country and applied them. For 
instance, in our office in Ashland BIA.
    But I think from HUD's perspective, we certainly would 
welcome involvement from Congress and working with us and 
working with BIA to assist in establishing the priorities that 
we think are important in regards to the need to have all of us 
working together and functioning correctly so we can streamline 
and get the process and get the paperwork done.
    Mr. Gonzalez. If I can add one more thing. I know that 
Michael and I talked about this last week, but, essentially, 
the One-Stop Mortgage Initiative in Indian country, which is an 
initiative with Fannie Mae and RD and BIA and HUD to try to 
really come up with uniformity and processing of the 
applications, and I think that could be a big help.
    Chairman Ney. I think that's an issue we can look at, the 
uniformity and also what we can do to help in Congress. And 
then, when we get back to the Capitol, we have a follow-up 
hearing with the BIA, and I think we need to ask them, you 
know, this is what is stated as a backlog, why has that 
happened and what can be done to correct that?
    Ms. Waters. First of all, I would like to thank Mr. 
Gonzalez and Mr. Liu for making up our second panel here today, 
and I thank you for providing us with additional information 
that helps us to understand the complexity of this problem.
    It seems to me that we have resources but somehow they are 
underutilized for the most part. It seems to me that some 
training has gone into how to consolidate services but, again, 
it may not be working as well as we would like it to work. One-
Stop, that's a great idea, and it seems to me that that should 
bring all of the entities together and make it easier to 
navigate these various agencies.
    But let me ask about the under expenditure of the 
guaranteed loan, the loan guarantee monies. It's a little bit 
upsetting to know that we have funds in these loan guarantee 
programs that are going underutilized. Whenever that happens, 
it usually points to a problem in getting people to implement 
and usually you have to do something about building capacity. 
If people are underutilizing funds, it means that they need 
some assistance in being able to learn how to utilize those 
funds. We have discovered this in some other programs that we 
have been involved in.
    What have you done and what can you do to build capacity so 
that these funds can be utilized rather than us sitting here 
and letting them roll out over a five-year period of time?
    Mr. Liu. You are absolutely right, Congresswoman. There 
does need to be action steps, real steps to be taken and not 
just the recognition of a problem. We have for the first time--
and I'm not going to lay the blame on anyone. Part of the buck 
stops here.
    We actually have begun, we have set, now, goals for 
regional offices in terms of loan volume, stretch goals. We are 
looking at, hoping to do a couple hundred million dollars' 
worth of mortgages. If you average each mortgage at around a 
hundred thousand dollars, that's really not that many 
mortgages, but if you look at the mortgage market as a whole, 
it's really fairly modest.
    That in itself has focused attention of our managers in the 
field on 184. I think even in this region here, Mr. Mecham, our 
field office director, has done an excellent job in the past 
six months in really going out into Indian country, alerting 
tribes to this resource and working with them because now he 
also knows he's going to be measured in terms of his 
performance on whether or not his region is going to meet their 
goals. That's one.
    Number two, we have scheduled and have had a series of 
regional meetings, bringing in tribes and financial 
institutions, both retail and secondary market, to talk about 
leveraging of funds, financing, utilizing 184 and Title VI in 
real workgroup situations. Not just on a very broad basis, but 
sitting down and trying to work through issues and specific 
problems which are involved. Now, in those sessions, USDA has 
been involved as well as BIA. So that process is going on, the 
capacity building.
    We are working with our partners who do provide TA to work 
with us and also going out and focusing on these programs. So 
there are action steps going on and we certainly hope to have 
some real results by the end of this fiscal year.
    Ms. Waters. Well, let me, after I finish this, let me just 
say that I believe that the lending institutions would be happy 
to have a 100 percent loan guarantee, or even an 80 percent 
loan guarantee. And I just know that if this was better 
marketed or if they really understood it, they would be 
knocking down the door to get a loan guarantee.
    Now, when you say that you go out to the tribes and you're 
trying to put this all together, I would like to know whether 
or not the tribes have the ability to either employ or contract 
with consultants or others who could help expedite putting this 
together and whether or not the institutions themselves are 
appointing or identifying folks inside their structures who are 
dedicated to bringing them more 184 or Section VI or 502 money. 
Because I think they need to identify somebody inside the 
institution who will spend time on this, who will learn it and 
understand it and work with the implementers, whether that's 
someone coming directly from the tribes or someone that they 
hire to help them with it.
    Can any of the dollars be used from the loan guarantee 
program to actually support capacity building?
    Mr. Liu. We actually have technical assistance and training 
dollars and we have allocated substantial portions of those in 
support of the 184 program. The tribes themselves, obviously, 
do have the ability to use their grant funds to assist them.
    I'm engaging in direct conversations with many banks right 
now just on that topic that you are talking about, the 
assigning of staff and individuals to support the interest in 
the program.
    Finally, we are doing a better job of learning a number of 
unique features of 184 which can mitigate a lot of the 
perception problems that still are associated with loans made 
on tribal lands. The one specific point is that under the 184, 
a lender has the option, in the event a loan craters in, in the 
event of a default, a lender does not, under 184, have to 
service that program to the end of the process before getting 
reimbursed. The lender can assign that mortgage to HUD and HUD 
will take care, then, of the servicing of that loan to 
foreclosure or reassignment, which is very unique.
    Ms. Waters. How long have you been talking to them about 
this?
    Mr. Liu. We have--well, actually, since I started, which is 
about three years ago, and then on an accelerated basis, about 
a year and a half ago. It takes time. It takes time.
    Ms. Waters. Well, again, you have just made it even more 
attractive in the way you have described, that they don't have 
to service it, that they can give it to HUD.
    I just don't understand, if you've been spending three 
years on this, or even one and a half years, why they are not 
beating down your door. I don't get it.
    Mr. Gonzalez. If I may, Congresswoman Waters.
    I just want to say, in terms of capacity building, that our 
State offices here in Arizona and throughout this region are 
doing the outreach on Native American lands and communities, 
and are pretty effective at that. In fact, the Window Rock 
location is actually an office that services these Native 
American communities. We also do have an office I believe in 
Flagstaff, and some of these are actually staffed with tribal 
members that are familiar with doing business in tribal 
communities.
    I'll say with--one point I want to bring out is that Rural 
Development does have a Five-Star Commitment that it kicked off 
two years ago, and the focus of that Five-Star Commitment was 
really to increase homeownership, but it was to lower the 
guarantee fee, which is from two basis points to about one and 
a half to make it more affordable. We were looking at doubling 
the number of self-help grantees, and one of the applicants 
that we actually went and saw today was the ICE effort. That 
application is moving into the pre-application stage or 
predevelopment stage.
    But that's an example of what Rural Development is trying 
to do to improve the quality of life and living conditions in 
Native lands.
    And last, what I heard earlier from the first panel is 
talking about I believe some of the credit issues, the credit 
issues in terms of homeownership. We do have a focus here, 
again, specifically looking at a home buyer education effort in 
terms of trying to teach people the ins and outs of 
homeownership and addressing those issues.
    Ms. Waters. As I understand it, and thanks to you, ICE is 
doing a very good job of that. We were privileged to talk 
extensively with them about what they are doing and we think 
that's extremely important. We appreciate the support for that.
    I'm going to turn this microphone over, but I cannot help 
but ask--I want to know about this $54 million. The last $54 
million at risk. I want to know how much of that money is at 
its five-year point where we are going to lose it? Is that what 
I understood you to say?
    Mr. Liu. Yes, ma'am.
    Ms. Waters. Could you please let me know? How much of the 
$54 million--or is it more than $54 million that's now at a 
point where it's going to have to be returned?
    Mr. Liu. In the '05 budget request, there is a decision 
clause that does combine for the Title VI and 184 program 
amount to $54 million in rescission money at end of FY '05 
should the associated credit not be used.
    Ms. Waters. Mr. Chairman, I'm going to give this back to 
you, but I wish somebody could continue this, see if we can do 
something to keep from having to rescind these monies.
    Chairman Ney. To follow up on that, another thing I--I 
won't ask for the answer right here, but if we can also start 
to dig into why. What went wrong, you know, where the stopping 
point came or did the money go down and there's a problem with 
maybe education, or the housing authorities, or was it the BIA 
or--not to put a finger of blame here, but to find out why the 
system is coming to a halt. I think that these questions are 
important, what can we do, and also why is it happening. If we 
could get down--and I know you can't determine on every single 
case, but if we can get some generic pattern here of why this 
is coming to a standstill?
    Gentleman from Arizona.
    Mr. Renzi. Thank you, Chairman.
    Two questions, Mr. Liu. I first heard about the project on 
the San Carlos today that you heard from Chairman Kitcheyen, 
two projects which are ready to go. She asked passionately if 
the Phoenix office could receive leverage in order to be able 
to push through the environmental review process so we could 
unlock some of the bureaucratic logjam.
    Can you help address that? We also have, Debbie Ho is still 
here, who represents the San Carlos, in case we can put you two 
together. Could you address that for me, please?
    Mr. Liu. Sure. I'll talk to Mr. Mecham and we will have our 
office work more closely on the issue and take a look at 
details as to why there is this hangup in the environmental 
review situation.
    I've heard of problems in other areas in the country. This 
goes back to, I think, the streamlining and the need for 
consolidation. And in the environmental review process, I think 
there is a certain amount of confusion among the agencies as 
well as with the tribes as to responsibilities and as to 
perhaps work that may have already been done that can be used 
for the actual project in question. But Mr. Mecham and his 
staff will be addressing it.
    Mr. Renzi. I look forward to hearing back from you on that 
and seeing some results, please.
    While I have you, you heard President Joe Shirley talk 
about the census issue, the fact that the data has now changed, 
or the way you gather the data. Is that correct? So we are 
using multi-racial characteristics. You heard President Joe 
Shirley talk about how he would like to see us go back.
    I'm considering a legislative fix unless there is some sort 
of a real justification as to why it is that we should allow 
those monies to be diluted. The Navajo Nation is the largest 
Native American Indian tribe in America. We have many tribes 
with 138 members who have a casino that are much better off, 
yet they get an equal distribution. Or you can have a person on 
the east coast check that box now and the monies will go there 
instead of coming here.
    Can you help me?
    Mr. Liu. Well, Congressman Renzi, as you know, any 
information which is based on census information which is 
recognized--which has been used since the beginning of the 
NAHASDA, it's based on self-reporting, whether it's one box or 
whether it's 15 boxes. It's self-reporting by that individual.
    HUD has made the policy call based on recommendations from 
staff as new information has become available, as it has under 
the new census where an individual is able to check more than 
one box. But that is the most expansive and most, most 
expansive reading and provides greater ability for more, most 
folks----
    Mr. Renzi. Sir, I'm with you on the policy. But I'm asking 
you now, as far as the dilution of monies, can you see here how 
it's affecting the Navajo people? Obviously, how it's diluted 
the monies, and the concentration would need to come here.
    Mr. Liu. Well, Mr. Renzi, this issue was taken up by the 
negotiated rulemaking committee, which consisted of 26 members, 
including representatives from all tribes, from all regions of 
the country. No consensus could be reached on this subject.
    Mr. Renzi. So, what are we going to do about that?
    Mr. Liu. Well, since we do recognize the tribes as 
sovereign nations, and they have been the greatest purveyors of 
the notion that we should go to negotiated rulemaking, it 
shouldn't be left to Congress' jurisdiction, shouldn't be left 
up to the administrations, it should be worked together in a 
negotiated rulemaking setting, by the lack of the ability of 
the tribes themselves to come to a consensus on this, I think 
that's an indication that there's still need for discussion and 
there is still need for the tribes to interact on this.
    Mr. Renzi. I appreciate the answer. We will look at ways 
that maybe we can address the issue and come up with at least 
some sort of equal proportion or some sort of formula that 
works.
    Mr. Gonzalez, I appreciate your work. In particular, you 
have, in your testimony, talked about increases that have 
occurred. As you can see--and particularly in the first panel--
there is a major confidence, a self-determination among the 
people. There is an independence. And much of this independence 
of wanting to have homeownership is tied to the fact of the 
inability of the Navajo people, the Hopi people, the Yavapai 
Apache, the Apache people to have good, sustainable jobs. Good 
jobs.
    In order for self-determination, in order for the Navajo 
people, the Hopi people, to be able to pull themselves up as 
they want to do, in order to be able to help solve the housing 
situation themselves, not just with government assistance but 
the real answer--I mean, as was said here earlier, we're not 
going to add billions of dollars to the budget in order to be 
able to solve this problem. We need economic development, 
particularly on the Hopi reservation and the Navajo 
reservation. Part of that is being able to bring and attract 
developers.
    And I would like to ask you what kind of programs are 
geared towards attracting developers? What kind of programs do 
you know of that we could help with economic development. Real 
jobs. I'll give it back to you. Thank you, Chairman.
    Mr. Gonzalez. Congressman Renzi, I felt that same 
confidence just during the tour today. This has been my first 
visit to the Navajo Nation and to the communities we visited 
today.
    But Rural Development, as I see government, it plays a 
catalyst in trying to encourage private sector investment, and 
that is our goal. I say this, and I say it quite often, I say 
that Rural Development is one of the few agencies in terms, 
when you look at SBA, you look at HUD, that can actually build 
a community from the ground up with infrastructure in terms of 
water or waste, in terms of electric, telephone, broadband. 
Then I go over to housing. It puts people in homes through a 
self-help program, which is a critical program, I would think 
here, to encourage that private investment. But to not only 
build homes, but to build communities. I mean, I believe that's 
what the people here on the Navajo Nation want, is to build 
communities. Around that, you start to create economic 
opportunity and you start to improve the quality of life in 
this area.
    And last, I will say a little bit about the programs. Those 
are the guarantee programs, and I think what would work well on 
the Navajo Nation would be our Intermediary Relending Program, 
which is our guaranteed loan fund, value added development 
grants, and renewable energy grants.
    These are all tools that rural communities, including the 
Navajo Nation, can use to bring economic diversity and create 
those jobs that you are referring to.
    Chairman Ney. Gentleman from Utah.
    Mr. Matheson. I appreciate both your testimony and I just 
want to ask a couple questions.
    I get the impression that NAHASDA has been a positive step 
in terms of housing programs, but I might ask just a quick, 
open-ended question.
    What would be the next step you would suggest from a 
Congressional standpoint? Are there other improvements you can 
make to work more efficient, have better results?
    Mr. Liu. Well, addressing the guaranteed loan program, I 
believe that--we are working on this and we have the mechanisms 
now through internal rules and procedures, but I think if we 
could open up the prospective as to the applicability of some 
of these programs that may not, that aren't always tied just to 
trust lands, where there is, for instance, in the 184 or Title 
VI, where there is a significant accumulation of credit 
authority. Native Americans, wherever they live, have a 
difficult time. I think there's no question there. And I think 
if we look at what we might do, and we are investigating that 
in HUD, of opening up the programs where Native American 
families, wherever they might reside, trust lands or not--
because there are, of course, millions of Native Americans who 
don't live on a reservation--we can find reasonable ways, 
certainly without taking away the focus of the trust lands, but 
an ability to facilitate helping those families who don't live 
on trust lands, I think that would be very helpful.
    Mr. Matheson. There is talk about potentially changing the 
loan guarantee, the 80 percent. Do you have any comment on 
that, or what the status is of that.
    Mr. Liu. The 184 is, of course, at a hundred percent. That 
is set by statute and law.
    The Title VI program, according to credit reform ONB 
scoring, is worked at currently at an 80 percent level.
    Mr. Matheson. Just to confirm, it has not always been at 80 
percent.
    Mr. Liu. No, it has not. It had been at a higher percentage 
and there was some misinformation or miscommunication between 
OMB and HUD dating back to 1999 until recently and that had to 
be cleared up.
    Mr. Matheson. So are you telling me that HUD is going to 
lower that down to 80 percent.
    Mr. Liu. Yes.
    Mr. Matheson. I think that's something we ought to look at.
    Mr. Gonzalez, if I could ask you a quick question. I 
appreciate the efforts of the USDA and Fannie Mae in terms of 
coordinating different products. I wonder if you can talk about 
what USDA has been doing to promote the preservation of 515 
housing stock.
    Mr. Gonzalez. Congressman Matheson, good question. I'll 
answer that question.
    Last fall, former Under Secretary Dorr took an initiative 
to look at the 515 portfolio and look at prepayment issues, 
look at rehab of those properties and look at really the market 
conditions. And, so, we went outside with a consultant.
    We are in the stages right now of drafting a preliminary 
report. We will share that with the congressional members, but 
we should have the final report on the 515. Again, we are 
looking at market conditions, we're looking at assessing 
property conditions, and we are also looking at capitalization 
requirements to see how they might impact those properties and 
future new construction.
    Mr. Matheson. Not that I would hold you to this statement, 
but do you have a sense when the final report might be?
    Mr. Gonzalez. We are looking at fall, if I had to gander a 
date.
    Mr. Matheson. I guess one thing that's kind of struck me 
today--and maybe this is echoing what Congresswoman Waters said 
before. This morning, I go and tour these facilities and I see 
this crying need, and then I come here and I hear about certain 
pockets of money or loan guarantees or whatnot that aren't 
being fully utilized. And, to me, that doesn't add up and it 
really has me wondering what we can do to overcome whatever the 
obstacles or inefficiencies that are in our system. Clearly, we 
are not firing on all cylinders and this isn't working, and I 
think we need to figure it out.
    Mr. Gonzalez. I just wanted to answer--maybe that's a 
question you wanted to ask Mr. Liu, but in terms of my 
observations and working in urban and rural settings, working 
with HUD, BIA, USDA and Rural Development, Fannie Mae, FHOB, 
and the private sector, we can go on and on, but a coordinated, 
a really strong coordinated effort there at really bringing 
those resources to Native American communities and leveraging 
those with the private sector. And that's the road that I can 
see.
    But to encourage that kind of private investment is going 
to mean addressing the uniformity and servicing of those loans 
in terms of issues that we have with others. So that's why I 
think we can make some ground and begin to address some of 
those issues.
    Mr. Matheson. Thank you, Mr. Chairman.
    Chairman Ney. I want to thank the panel for being here 
before the housing subcommittee. And with that, we will go on 
to panel three. I do have to step away for about ten minutes. 
Mr. Renzi will chair the subcommittee. Thank you. Panel three.
    [Recess]
    Mr. Renzi. We need to come to order, please. I want to 
introduce the third panel who has joined us. Chairman Ney will 
be coming back in just a few minutes.
    Let me begin by introducing the panel. First we have with 
us Pattye Green, who is the senior business manager for Native 
American Housing at the Federal National Mortgage Association. 
We also have with us today Freddy Hatathlie, who is a mortgage 
consultant for the emerging markets at Wells Fargo Home 
Mortgage. His office is here in Flagstaff. We have Renee 
Konski, who is a loan officer with American Financial 
Resources, Inc. Mark Maryboy, who is a delegate to the Navajo 
Nation, who I consider a good friend, with the Navajo Nation 
Council. He is chairman of the Navajo Transportation and 
Community Development Committee and has done a lot of work for 
infrastructure here on the Navajo Nation.
    Lawrence Parks, a good friend who is senior vice president 
of the External and Legislative Affairs for the Federal Home 
Loan Bank of San Francisco. Kent Paul, who is the chief 
executive officer of AMERIND Risk Management Corporation, who 
handles a lot of specific issues around insurance and risk-
pooling alternatives. June Sabatinos who is the vice president 
of Ambulatory Care Services at the Tuba City Regional Health 
Care Corporation, who has an interesting story to tell today. 
And Russell Sossamon, who serves as the chairman of the 
National American Indian Housing Council.
    I thank all of you for coming today. It's a large panel. 
I'm going to ask you please to limit your testimony to five 
minutes, no more than five minutes, so we can move through with 
a lot of questions afterwards.
    Ms. Green, we will begin with you. Pass the microphone, 
please.

 STATEMENT OF PATTYE GREEN, SENIOR BUSINESS MANAGER FOR NATIVE 
    AMERICAN HOUSING, FEDERAL NATIONAL MORTGAGE ASSOCIATION

    Ms. Green. Thank you, Chairman Ney, Ranking Member Waters, 
Congressman Renzi and Congressman Matheson.
    As senior business manager for Native American Initiatives 
with Fannie Mae, I assist the regional offices and partnership 
offices in structuring mortgage transactions on and off trust 
land. I am also a tribal member of the Choctaw Nation of 
Oklahoma.
    I want to thank you for inviting me to testify on the state 
of homeownership on tribal lands and to commend you for your 
leadership on this issue. Your concern and continued attention 
are critical to the success of public and private sector 
efforts to expand homeownership opportunities in the Native 
American community. I am pleased to be here today to discuss 
Fannie Mae's commitment to expanding homeownership in tribal 
communities and to share with you the steps we are taking to 
overcome the barriers to capital access on tribal lands.
    Right here in Arizona, last September we worked with Navajo 
Nation President Joe Shirley, Congressman Renzi and others in 
putting together a $3 million Navajo community guarantee 
initiative. The initiative will help approximately 60 families 
on the reservations to purchase newly-built homes with 
contributions from their own funds of $500 or even less. As 
Chester Carl, chief executive officer of the Navajo housing 
authority observed when the topic was announced, step-by-step, 
we are identifying and filling gaps in the mortgage finance 
system for the Navajo Nation, enabling more families to become 
homeowners, which is an important first step in the creation of 
wealth. I want to thank Congressman Renzi for his work and his 
dedication on this project. This the kind of public-private 
partnership that brings real results and innovative solutions 
to housing challenges.
    Fannie Mae has also worked with Dallas Massey, chairman of 
the White Mountain Apache tribe, and the White Mountain Apache 
housing authority to develop the Apache Dawn Development 
Community, which included the first-ever use of tax-exempt 
bonds by an Indian housing authority.
    And over the years, Fannie Mae has also participated with 
the Hopi, Gila River and Salt River Pima tribes, supporting 
their efforts to provide information on how to prepare for home 
purchase process.
    I would like to briefly mention our internal Native 
American Business Council, which convenes representatives from 
our community development and our regional and partnership 
offices to work together to expand our capacity to make 
tangible investments that increase affordable housing 
opportunities on tribal lands throughout the country. We are 
building a stronger lender base by educating lenders about the 
unique characteristics of lending to tribal communities. We are 
teaching tribes how to leverage federal resources to support 
the production of additional, affordable housing units.
    As part of our 2000 American Dream commitment, Fannie Mae 
vows to invest at least $350 million to serve 4,600 families on 
reservations. Over the past five years, Fannie Mae has helped 
over a hundred thousand Native American families purchase homes 
by providing more than $14.8 billion in affordable financing. 
On reservations and tribal jurisdictional lands alone, we have 
invested over $640 million to serve over 7,100 families. We are 
pleased that we have been able to reach 191 tribes with our 
financing.
    Fannie Mae has also teamed with PMI Mortgage Insurance 
Company under their Gateway Cities initiative to provide 
$125,000 in revolving funds for nonprofit development 
corporations to build or renovate housing on the Pine Ridge 
Reservation in South Dakota, and on the Acoma Pueblo in New 
Mexico.
    Earlier this year we announced our Expanded American Dream 
Commitment, which will increase our efforts in Indian country 
even further. Together with tribal leaders in partnership with 
NAIHC, we are working to create a new Native American Strategic 
Partnership to bring capital to Indian country, with a goal of 
launching at least ten comprehensive initiatives in tribal 
areas. We will also increase our investments to support tribal 
housing initiatives during this decade to at least $1.25 
billion serving 11,000 families on tribal reservations and 
tribal jurisdictional lands.
    Fannie Mae's approach to promoting homeownership in tribal 
communities is two-pronged. First, we develop the right 
products to optimize Native American access to homeownership, 
and second, we expand housing capacity on tribal lands.
    In 1999, we launched our Native American Conventional 
Lending Initiative, known as NACLI, designed to make 
conventional lending possible for Native Americans on trust 
land and otherwise restricted lands. Through this initiative, 
the full range of our low down payment mortgage products, as 
well as specific accommodations responsive to the unique 
circumstances of the Native American borrower, are available to 
lenders working with tribal lands.
    We currently have relationships with 112 lenders to make 
loans to Native Americans on tribal lands. Some of our partners 
are Countrywide, First Mortgage Company, Washington Mutual, 
Bank One, American Financial Resources.
    Fannie Mae is also working with tribes to support new 
construction through investments in low-income housing tax 
credit investments and collateralized revenue bonds. And we 
have developed a secondary market for development loans 
guaranteed by HUD under the Title VI. As a result, in 2002, we 
purchased a $50 million Title VI loan which would help to build 
538 units for moderate to low income families in the Cherokee 
Nation of Oklahoma, the largest Title VI of NAHASDA.
    Perhaps the greatest obstacle to increasing homeownership 
in Indian country is the legal framework governing tribal 
lands. Tribal governments have taken steps to clarify tribal 
sovereignty and sovereign immunity, particularly regarding 
business and housing development, but resolving this issue 
requires partnership from the private and public sectors. 
Fannie Mae has worked with HUD, the USDA, and Treasury to 
support tribes in creating standardized documents and model 
legal ordinances to support government guaranteed and 
conventional mortgage activity.
    We are also working closely with HUD to streamline the 184 
process loans. Additionally, Fannie Mae no longer requires 
tribes to make limited waivers of their sovereign immunity and 
we also now provide for the mutual consent to tribal court 
jurisdiction over conventional lending initiatives on tribal 
trust land.
    Finally, education poses a barrier to capital access for 
Native Americans. Many Native Americans lack an understanding 
or familiarity with banking, credit reporting or the loan 
qualification process. And unsurprisingly, they have difficulty 
obtaining credit through traditional means.
    I hope that in hearing these commitments, you will begin to 
understand the progress that Fannie Mae has begun to make in 
expanding homeownership for Native Americans. Homeownership is 
the key driver of economic growth and revitalization. By 
expanding homeownership for Native Americans, we can not only 
provide families with better housing but also with the power to 
raise capital, accumulate wealth and to build a more secure 
financial future.
    I want to thank Chairman Ney, Ranking Member Waters, 
Congressman Renzi, Congressman Matheson for their leadership 
and their commitment to expanding homeownership opportunities 
for Native Americans. You have been champions of developing 
housing in Indian country and supporting tribal members' 
efforts to revitalize their communities. I look forward to 
working with you and other members of the committee. Thank you.
    Mr. Renzi. Ms. Green, thank you for your testimony.
    [The prepared statement of Pattye Green can be found on 
page 102 in the appendix.]
    Mr. Renzi. We will move now to Freddy Hatathlie of 
Flagstaff. Freddie.

 STATEMENT OF FREDDIE HATATHLIE, MORTGAGE CONSULTANT, EMERGING 
                 MARKETS, WELLS FARGO MORTGAGE

    Mr. Hatathlie. Good afternoon, Chairman Ney, Ranking Member 
Waters, Congressman Renzi and other distinguished members of 
the committee.
    I am Freddy Hatathlie, a Wells Fargo Home Mortgage 
consultant for Indian country initiatives. I'm a member of the 
Navajo Nation who works directly with tribes in the northern 
Arizona area. I would like to make some brief statements on how 
Wells Fargo's goals relate to Native American lending and 
respond briefly to some of the issues that were raised by the 
subcommittee.
    Before I continue, I would like to introduce Dave Howell, 
who is the vice president of community and government 
relations, and also Larry Price, who is the branch manager for 
Kayenta.
    For more than 25 years, Wells Fargo has recognized that 
tribal nations have special financial needs. The challenge 
might be the trust status of tribal land or a tribe's status as 
a sovereign nation, or just the lack of standard financial 
information that is traditionally required for project 
financing. Wells Fargo is an experienced lender in these 
questions and I believe has a strong commitment to finding 
solutions and recognizing the unique status of tribal lands.
    Arizona is a very important market for Wells Fargo, and I 
would also note that Wells Fargo operates in 22 other states 
that are home to nearly 90 percent of the federally recognized 
tribes. Wells Fargo provides a full array of financial 
services, including 15 full-service banking facilities located 
on tribal reservations.
    The subcommittee had asked for specific comments in 
response to four questions that were raised, and I would like 
to discuss these in turns.
    What initiative has Wells Fargo taken part in or have 
knowledge of to develop housing opportunities for Native 
Americans.
    I want to highlight some of Wells Fargo's contribution and 
initiatives to promote housing activities in Indian country. 
First, Wells Fargo Home Mortgage, with the help of the U.S. 
Department of Housing and Urban Development, Section 184, can 
originate 184 loans and conventional loans on trust land. Wells 
Fargo Home Mortgage, through its housing foundation, is the 
sole sponsor partnering with the Neighborhood Reinvestment 
Corporation to provide a Native American community development 
training program. This program started today and will be ending 
Friday in Minneapolis. The curriculum includes training 
programs for home buyers and counselors with an emphasis on 
Native American communities.
    Another area that is going to be addressed in the training 
is how tribes can leverage resources for housing and 
development projects in Indian communities.
    Other contributions that Wells Fargo has been involved in 
is making monetary contributions to nonprofit organizations 
such as Navajo Partnership for Housing, Twilight Dawn, Fort 
Defiance Housing Corporation and Indigenous Community 
Enterprises. These monetary funds have been utilized for first-
time home buyers to assist with down payment and closing costs.
    Wells Fargo also has a financial education in place which 
includes distribution of Wells Fargo curriculum, a training 
called Hands-On banking, a comprehensive curriculum available 
free of charge. And we are pleased to, pleased to mention that 
states have approved this curriculum for use in public school 
systems. Wells Fargo also sponsors Individual Development 
Accounts to help low-wage earners to become self-sufficient.
    Question number two: Is Wells Fargo aware of the One-Stop 
Mortgage initiative? Yes. Wells Fargo is and was represented 
during the discussion. The initiative allowed for a uniform 
voice to be heard at the tribal and federal level. The 
initiative outlined the challenges and barriers, and 
recommendations were made to promote homeownership for Native 
Americans. Therefore, continuing this initiative would advance 
the housing initiatives.
    Question three: Trust land status. Does this affect the 
private sector's ability to provide housing activities? Yes, it 
does.
    And what actions do you believe must be taken to encourage 
greater homeownership opportunities for Native Americans? For 
Wells Fargo, and with all lenders, we are aware of the process 
and the complexity that it takes to complete a transaction on 
trust land. The lenders, the family, secondary market, the BIA 
and the tribe have come to realize this is not a transaction 
that we can complete in 30 days which would be more relevant 
for a traditional mortgage.
    Just based on example, being a home mortgage consultant, I 
have been working to obtain an environmental assessment and it 
has been taking me about, more than a year to obtain one. And, 
also, with the lease modifications that need to take place on 
Navajo, it just--you submit a modification, the clients do, and 
it just takes a while for this transaction to take place. And, 
you know, you encourage customers, you know, what you need to 
do is continue to put pressure on them how we can get this 
modification complete.
    And that's the key document, on the home side at least, 
that initiates the mortgage process on trust land. So these are 
issues that I constantly face as I work with Native Americans 
obtaining homeownership.
    Question number four: What changes or initiatives are 
necessary to encourage private mortgage market to invest in 
Native American areas.
    My recommendations would be to establish and recognize a 
uniform set of procedures at the BIA level. Example: I have a 
colleague that I work with in Sioux Falls, South Dakota, which 
is our processing center for trust land lending. And when I 
constantly meet with him, you know, we describe what kind of 
transactions we are doing. And what they do there is they do 
cash-out refinances.
    For Navajo, from personal experience, you know, this was 
the first transaction that I pursued and I was not able to 
succeed only because, you know, at that level, BIA had 
mentioned this is something, a transaction that we cannot do. 
So I know there are stages right now where they are going to 
implement cash-out refinances, and I definitely believe this is 
long past due.
    Mr. Renzi. Freddie, can you wrap up, please?
    Mr. Hatathlie. I would also like to add that Wells Fargo 
Home Mortgage is designing an initiative where HMCs will be 
certified to lend on trust land. Personally, I feel that this 
is very important because we have lenders that are out there 
and that want to do lending on trust land and have no knowledge 
of what actually goes into lending on trust land. So that's 
something that's very important that Wells Fargo is working on.
    Another initiative, another plan that's going to take place 
is Wells Fargo Home Mortgagee Emerging Markets vice president, 
senior vice president will be coming out to Window Rock 
Wednesday to assess the opportunities that are available on 
trust land. So--which is very encouraging when you have high-
ranking people coming out.
    In conclusion, I'd like to thank the subcommittee for 
allowing me to address my concerns. Thank you.
    Mr. Renzi. Thank you, Freddie.
    [The prepared statement of Freddie Hatathlie can be found 
on page 111 in the appendix.]
    Mr. Renzi. Ms. Konski.

  STATEMENT OF RENEE KONSKI, LOAN OFFICER, AMERICAN FINANCIAL 
                        RESOURCES, INC.

    Ms. Konski. Congressman Renzi, members of the committee, my 
name is Renee Konski, and I'm a senior loan consultant with 
American Financial Resources.
    Thank you for the opportunity to provide comments on the 
first-ever hearing on tribal land housing for Native Americans. 
I'm here today on this panel with lenders and others who 
individually and collectively are working to increase the 
homeownership where it's needed the most.
    My involvement in this area comes from a personal passion 
and commitment. Lending as it stands now on Native American 
trust land takes more. And by that, I mean it's more 
complicated. It takes more of an expertise.
    Experience and volume is what builds comfort and efficiency 
and, quite frankly, we're not to that level yet. American 
Financial Resources is an Arizona state loan corporation with 
about--we lend in about six states. We have about ten years in 
the mortgage banking business.
    I, myself, have been involved in Native American lending 
for the better part of four. In those four years, I have made 
quite a few strides. The strides have been realized through my 
partnerships and relationships. My written testimony offers 
many experiences of how the Native American programs are 
working. It offers a lender's perspective on how the largest 
obstacle to improving housing opportunities for Native 
Americans and it offers some recommendations for removing 
obstacles.
    I want to spend just a little bit of my time today to talk 
about the partnerships and relationships that make it possible 
for the dream of homeownership on trust land.
    The HUD 184 program. I have used the program. I have used 
the program for a purchase, I have used the program for a 
refinance. The program works. USDA 502. I have used the 
program. I have used the program for several tribes. The 
program works.
    Arizona Department of Housing. Through their commitment, 
through their subcommittee meetings, has given me the education 
and given me the experience to build relationships that have 
made communication possible in getting my mortgages completed.
    The Navajo Partnership for Housing, a nonprofit 
organization that does provide families with home buyer 
education, I also sit on that committee as a board member and a 
member of the loan committee.
    And, of course, my partnership with Fannie Mae. It's Fannie 
Mae that's stood by me from the beginning when I decided that 
this would be my challenge and my passion. Fannie Mae has been 
my partner and my mortgages are sold directly to Fannie Mae.
    In closing, let me say that while I feel I've made a lot of 
strides in these areas, there is so much more we need to do. 
Better communication and trust and a unique commitment for all 
of us to come together will provide mortgages possible for more 
Native Americans and the dream of homeownership to come true. 
Thank you.
    Mr. Renzi. Thank you, Renee.
    [The prepared statement of Renee Konski can be found on 
page 131 in the appendix.]
    Mr. Renzi. We will move to the Honorable Mark Maryboy, 
delegate to the Navajo Nation Council. Mark.

  STATEMENT OF MARK MARYBOY, COUNCIL DELEGATE, NAVAJO NATION 
                            COUNCIL

    Mr. Maryboy. Congressmen Renzi, Matheson, Waters, thank you 
for this opportunity to address you today.
    As chairman of TCDC, I come before you today to initiate 
what we hope will become an ongoing discussion between your 
committee and Native American communities about how to craft 
solutions to remedy the housing problem in Indian country.
    We know the federal government is trying its best, but the 
1997 GAO report on Indian housing reveals federal housing 
programs in Indian country were essentially building ghettos in 
tribal communities. The passage of the Native American Housing 
Assistance and Self-Determination Act of 1996 has given tribes 
new opportunities that have allowed the Navajo Nation to 
provide low income housing for college students, elderly group 
homes, traditional hogan-style homes for elders and veteran 
housing. NAHASDA has given us more flexibility through its 
block grant to leverage other federal funding for both housing 
and infrastructure development.
    However, the federal appropriations for Native American 
housing are not sufficient and will never be enough as long as 
the federal laws do not encourage much greater private sector 
investment. The One-Stop Mortgage Initiative was successful in 
implementing the HUD Section 184 program. Unfortunately, not 
enough mortgage transactions are happening to meet the demands 
for homeownership on the Navajo Nation.
    There are a number of reasons for this. First, we simply do 
not have enough banks. The Navajo Nation has only one bank 
partner on the entire reservation, so there is virtually no 
competition for private investment. In an area that covers 18 
million acres, the Navajo Nation has only five banking 
facilities. Second, lenders are unfamiliar with enforcing 
mortgage or other debt instruments on tribal trust land. It is 
not that it cannot be done, it is simply that they don't know 
how to do it. Third, title searches are very difficult on the 
Navajo Nation because title records are maintained in one BIA 
office in Albuquerque, which is responsible for the records on 
every reservation and pueblo within the entire southwest.
    We urge Congress to amend the Community Reinvestment Act to 
ensure banks use transactions from surrounding communities to 
maintain acceptable investment scores. Some Federal Home Loan 
Banks have standards that result in significantly more service 
to Indian country. The Navajo Nation is currently served by 
three Federal Home Loan Banks, two of which do not maximize the 
opportunities to serve the Navajo Nation. The Navajo Nation 
requests that it receives all services from the Federal Home 
Loan Bank of Seattle, which has proven most helpful to the 
provision of home loan banking service to the Navajo people.
    And, finally, there is a question of legal jurisdiction. 
The mortgage companies who are willing to lend in reservation 
communities typically want to use state law to resolve any 
dispute. The tribes, of course, want to use tribal laws. 
Congress can help tribes and States avoid thorny federalism 
issues by making private lenders' receipt of federal guarantees 
contingent on such lenders availing themselves of tribal court 
when they make mortgage loans on an Indian reservation.
    The trust status of Indian land does affect the private 
sector's ability to finance housing for Indians. However, a few 
tools to overcome this challenge do exist. For example, the 
Navajo Nation Trust Land Leasing Act authorized the Nation to 
issue non-mineral leases within the reservation without 
secretarial approval. These leasehold interests have value and 
provide an equity interest that individuals can mortgage 
against.
    However, it is unclear whether under the 184 loan program 
such a mortgage is permissible. Consequently, the Navajo Nation 
is currently restricting its own leasing authority to business 
site leases rather than extend its broad power to include 
housing site lease.
    The federal land status of the Navajo Nation is a 
hinderance to housing development and homeownership. However, 
it is an underlying problem that Navajo people, like all 
Indians, are afraid to talk about because a recent federal case 
law threatens tribal jurisdiction and sovereignty wherever the 
land's trust status is altered in any way, including the grant 
of right of ways.
    Congress can be instrumental in forging a dialogue on this 
important subject by commissioning a blue ribbon panel composed 
of tribal experts to review federal case law to identify how 
trust status impacts economic development, including housing 
markets and homeownership in Indian country. Congress must then 
be willing to listen to tribal recommendations.
    Tinkering with federal initiatives today will not provide 
homeownership opportunities for Indians unless Congress makes a 
real commitment to curing the underlying condition that 
prevents homeownership within reservations, rather than 
treating a symptom. As elected tribal leader, as a tribal 
member, but most importantly as a father, I ask you to make it 
possible for my daughter and all Indian children to realize the 
dream to own a home on the reservation. Thank you very much.
    There are portions of my speech that I did not, for the 
time's sake, I did not read into the record. I would request 
that they be approved as part of the record, also. Thank you 
very much.
    Mr. Renzi. Without objection. Mr. Maryboy, thank you for 
the presentation. Your witness statements and comments will be 
submitted for the record without objection. I'm grateful.
    [The prepared statement of Mark Maryboy can be found on 
page 147 in the appendix.]
    Mr. Renzi. Mr. Parks.

STATEMENT OF LAWRENCE H. PARKS, SENIOR VICE PRESIDENT, EXTERNAL 
    AND LEGISLATIVE AFFAIRS, FEDERAL HOME LOAN BANK OF SAN 
                           FRANCISCO

    Mr. Parks. Thanks. That's a tough act to follow your 
testimony.
    Good afternoon. I'm Larry Parks and I'm a senior vice 
president of the Federal Home Loan Bank of San Francisco. I 
want to thank you, Congressman Renzi and subcommittee.
    Ranking Member Waters for having us here to talk about what 
we do at the bank and what we have hopefully done to put some 
tangible results on the table.
    The Federal Home Loan Bank of San Francisco is the largest 
of the Home Loan Banks in the Home Loan Bank system, and we are 
owned by lenders located in Arizona, Nevada, and California. 
The banks basically make advances, that's our core business, 
which are loans, loans to member institutions which are 
collateralized by mortgages. The members of the banks come from 
California, Arizona and Nevada, banks, savings institutions and 
credit unions, and they range in size from the largest banks in 
the country, some of the largest housing lenders in the 
country, to single offices.
    We have a common interest. Our members use the bank as a 
source of liquidity in providing funding for home loans. Access 
to the bank's advances enhances lenders' ability to hold loans, 
which is very important when you're dealing with character 
lending as is such in Indian country. These loans are usually 
loans that aren't easily salable into the secondary market and 
still meet either the seasonal or cyclical demands of the 
borrowing public. In effect, access to the bank's advances 
takes the liquidity risk out of lending to families with the 
fewest financial options.
    The core business of the home loan banks is providing 
advances. We provided about $500 billion in the economy as of 
December 31st, 2003, and of that, as of last month, about $112 
billion of that is from the San Francisco bank. It's a pretty 
large entity.
    A central part of the cooperative Federal Home Loan Bank 
system is the Affordable Housing Program, through which the 
Federal Home Loan Banks provide subsidies on loans or cash 
grants to build or rehabilitate lower income housing through 
the member institutions. That's a lot of jargon to say we work 
with nonprofits as an intermediary with our lenders. This is a 
program Congress mandated during the S&L bailout in 1989 and it 
has become embraced by a lot of lenders to help meet affordable 
housing needs in their communities.
    The Affordable Housing Program provides grants that equal 
ten percent of our annual income. So the more income we make, 
the more we are able to give out in grants. What it does is 
allow the pooling of resources for purchase, construction, 
rehabilitation of low and moderate owner-occupied and rental 
housing. The eligibility requirements for the HP grants help to 
make certain they provide needed funding in a competitive 
manner. AHP grants can be used to fund housing for families or 
individuals with incomes at 80 percent or below loan median 
income in a relevant geographical area.
    In addition, 20 percent of AHP funded rental housing must 
serve households with incomes of 50 percent of the are median 
income and below. AHP-awarded funding is provided only through 
member institutions that work in partnership with community 
sponsored organizations.
    The idea, I think, when Congress put this together and the 
Home Loan Bank System has somewhat embraced is to make sure we 
not only provide housing, but that we leave an infrastructure 
of locally competitive and capacity built nonprofit insitutions 
and communities as well.
    Since 1990, the San Francisco Bank has provided $312 
million in AHP assistance to 2,400 projects, rental and 
homeowner opportunities for 60,000 households. Through the AHP, 
a cross-section of lenders, developers, community-based 
organizations and local housing agencies work to create 
affordable housing. In 2003, the last year that's most 
relevant, the San Francisco Bank provided $36 million in AHP 
funding through its members to 103 projects that were awarded 
competitively. Member banks teamed up with nonprofit and for-
profit developers to develop project plans and submitted them 
to the San Francisco Bank's AHP process which scores and ranks 
them. The AHP subsidy has been used for things like on-site 
services made available to residents such as daycare centers, 
counseling and job training, computer learning centers and the 
need for the subsidy to complete the project.
    In Arizona, the winning 2003 projects were located in Pima, 
Yuma, Santa Cruz, Cochise and Maricopa counties, receiving $5 
million in subsidies from the Home Loan Bank. And the member 
institutions included Bank of America, Canyon Community Bank, 
Johnson Bank Arizona and BankUSA. Projects included ranged from 
$20 million in Phoenix for transitional housing for very low 
income Native Americans and people with special needs, 
Whispering Pines Apartments, to 61 new single-family homes for 
low to moderate income, first-time home buyers in Nogales.
    In addition to housing, Whispering Pines will include a 
kitchen and services for the residents such as employment 
training and counseling, health and youth programs and child 
daycare. The Pena Blanca Village homeownership project will 
include pre- and post-purchase homeownership counseling, a 
community facility and child daycare.
    The primary source of the activity by the San Francisco 
Bank in Native American communities is through the Affordable 
Housing Program, and that's why I was focusing on it. Since the 
program's inception, seven projects on Native American lands 
have been approved for grants by the San Francisco Bank. These 
projects provide 282 units of affordable rental housing and 18 
units of affordable ownership housing, resulting in attractive, 
sound shelter for 300 families.
    The funding by the San Francisco Bank of AHP projects on 
Native lands has not been without difficulty, primarily because 
of the unique legal status of tribes and their lands. The 
sovereignty of Native American lands and their trust status 
create legal problems for traditional methods of housing 
finance. That is, traditionally, lenders place a lien and have 
the ability to take possession of or sell the property to 
satisfy the lien. Generally, this tool is not available on 
tribal lands.
    The San Francisco Bank is committed to working with the 
Native American community to find solutions to issues that 
plague lending on tribal lands. Differences in tribal laws and 
sovereignty constraints make an across-the-board prescriptive 
solution for Tribal Native American lending nearly impossible.
    But I do have some good news, as Congressman Renzi well 
knows, and that was that balancing Native American sovereignty 
issues and the lien and foreclosure questions that the bank and 
its members often face is a challenge to provide a mortgage 
credit on tribal lands, but we were able to meet that 
challenge.
    For instance, in 1999 and 2000, the San Francisco Bank 
approved direct AHP subsidies for three rental housing projects 
on tribal trust lands leased to the project owner by the tribe. 
At that time, the Federal Housing Finance Board's AHP 
regulations, that's our regulator, seemed to require that a 
lien be taken to secure any AHP repayment obligation that might 
arise in the event of noncompliance with the AHP requirements, 
including the sale or refinancing of the project.
    In order to fund these projects and not violate federal 
regulations governing the Home Loan Banks, the San Francisco 
Bank sought a regulatory interpretation from our regulator, the 
Federal Housing Finance Board, that would clarify that 
mechanisms other than a lien on the property could be used to 
secure the AHP repayment obligations. After negotiating with 
the regulator over a protracted period, in 2003, the San 
Francisco Bank received a favorable answer, and that's how we 
were able to fund these projects. These projects are now 
finally underway.
    The Bank continues to work with trade groups and other 
collaboratives to find creative solutions to address lenders' 
needs and the rights of tribes on their land. For instance, the 
Bank works with the National American Indian Housing Council 
and participated in the development of the One-Stop mortgage 
process that was talked about earlier to streamline mortgage 
lending. Obviously, we think that one small step--we would like 
to take many more steps but we would like to build from what we 
were able to get accomplished with the Federal Housing Finance 
Board.
    With that, I thank you for letting me participate and look 
forward to any questions you have.
    [The prepared statement of Lawrence H. Parks can be found 
on page 150 in the appendix.]
    Chairman Ney. Thank you.
    Mr. Paul.

  STATEMENT OF KENT E. PAUL, CHIEF EXECUTIVE OFFICER, AMERIND 
                  RISK MANAGEMENT CORPORATION

    Mr. Paul. Thank you, Chairman Ney and distinguished members 
of the subcommittee to share my concerns regarding the 
significant impediments to improving housing opportunities for 
Native Americans.
    My name is Kent Paul, and I am the Chief Executive Officer 
of AMERIND Risk Corporation, a federal corporation owned and 
operated by a consortium of Indian tribes and Indian housing 
authorities, which pool their financial resources to provide 
self-insurance coverage to protect Indian housing, 
infrastructure, and individuals and families in Indian country.
    My testimony will address two specific topics. First, the 
inadequacy of affordable and available insurance coverage for 
homeowners in Indian country and its impact on home mortgages; 
second, the important role AMERIND plays in protecting Indian 
housing and the impediments restricting AMERIND's ability to 
provide even more protection.
    The lack of affordable or available insurance. In urban and 
suburban America, insurance for the most part is readily 
available from over 1,600 insurance companies. The opposite is 
true in Indian country. To date, less than five insurance 
companies provide products or services that meet the needs of 
Indian communities, tribal governments, reservation businesses 
and Indian housing.
    Since September 11th, 2001, the affordability and 
availability of insurance in Indian country has deteriorated. 
In our society, insurance is the oil that lubricates and 
protects our economic engine. Without insurance, banks will not 
loan money; consequently, money for investing in new economic 
enterprises would stay in the bank rather than becoming risk 
capital; business owners would be hesitant to conduct business; 
and autos would be parked in the garage.
    Why does the private sector turn its back on Indian 
country? There are several reasons:
    One, perceived lack of profit potential due to remoteness 
of Indian communities, lack of water and inadequate fire 
protection; two, insufficient number of insurance agents 
servicing Indian country; three, misunderstanding and fear of 
tribal sovereignty and tribal courts; lack of uniform tribal 
commercial laws or business codes amongst the 550 plus 
federally recognized tribes and an overall perception of Native 
Americans as poor, unemployed, uneducated and unhealthy.
    In any given month, various federal agencies, lending 
institutions or Indian organizations will provide a seminar or 
technical assistance programs on the topics of homeownership, 
mortgage lending, HUD 184 programs, Title VI programs or tax 
credit projects. Few, if any, of these seminars or programs 
discuss the role of insurance and financial protection in 
homeownership; yet, without such coverage, lending will never 
be provided.
    In my opinion, this has been one of the major stumbling 
blocks to homeownership in Indian country. Consideration needs 
to be given to ``incent'' the insurance industry to target 
Indian country, similar to what banks were under--in the 
Reorganization Act, or Reinvestment Act, or we need to broaden 
the 1986 Act to foster more risk pools such as AMERIND.
    There is a conflict between the state's oversight of 
insurance, McCarren Ferguson, and the federal government's role 
and responsibility of providing affordable, sustainable housing 
in Indian country.
    Some additional recommendations would be to streamline the 
lending process. Banks unfairly perceive too much difficulty in 
lending to Native Americans than to non-Natives. There ought to 
be an established, uniform set of rules or procedures. We need 
to find ways to minimize the tribes' need to waive sovereignty 
as part of the lending process. And, last, allow tribes to 
validate clear title to trust land within their communities 
with the BIA providing a supporting role rather than a primary 
role.
    The second topic of my testimony is the important role 
AMERIND has played to encourage homeownership and protecting 
Indian communities. As I mentioned earlier, AMERIND is a 
federal corporation owned and operated by a consortium of 
Indian tribes and Indian Housing Authorities that are dedicated 
to protecting themselves and their tribal families. AMERIND is 
owned by 217 tribes and Indian housing authorities, 
representing over 550 federally recognized tribes from 32 
states. AMERIND operates purely on a nonprofit basis. Since its 
formation in 1986, AMERIND has paid well over $125 million in 
Indian housing related liability and property claims while at 
the same time saving tribes and housing development--Housing 
and Urban Development Department over $100 million in premiums. 
We have protected more than 70,000 individual homes, more than 
six and a half billion dollars in property. We provide better 
terms, conditions, and coverage at nearly one-third the cost of 
comparable commercial insurance. We've remained financially 
stable during difficult market conditions and we provide self-
insurance coverage for Indian tribes and IHAs located in rural 
Indian communities where commercial insurance companies have 
refused to provide coverage.
    AMERIND, therefore, is an example of the kind of tribal 
self-determination that Congress intended to foster when it 
enacted NAHASDA under 25 U.S.C. 4131.
    There are three basic impediments that keep AMERIND from 
doing more, and we are prepared to do considerably more in 
Indian country. In Indian country, insurance coverage is often 
unavailable because of the commercial insurance industries' 
general lack of interest in doing business there. Tribes and 
IHAs have recently demonstrated to HUD and Assistant Secretary 
Michael Liu that, but for AMERIND, insurance for federally-
subsidized Indian housing in Indian country would be either 
unavailable or exorbitantly expensive. This finding corresponds 
to the reasons why Congress, in the 1991 and the 1992 HUD 
Appropriations Act, chose to support Indian housing risk pools 
and to remove counterproductive regulatory barriers to their 
ability to provide low-cost self-insurance coverage for 
federally-subsidized Indian housing.
    The first impediment is a lack of housing risk pool 
regulations, and AMERIND is the only Indian Housing Risk Pool 
in existence and has the distinct status of operating as a 
federal corporation under Section 17 of the Indian 
Reorganization Act. All other risk pools, which there are more 
than 400, are creatures of state law and oversight. Congress 
intended the creation of housing risk pools as an alternative 
insurance mechanism and instructed the HUD secretary to issue 
regulations regarding the same. To date, no such regulations 
exist.
    AMERIND has been working with the HUD secretary and staff 
to reinstitute rules that were in place under the 1937 Housing 
Act. AMERIND consistently complied with those rules and 
regulations until they were withdrawn in 1997 with the passage 
of NAHASDA. Since 1997, there have been no specific rules that 
address the requirements of an approved plan of self-insurance 
for Indian housing risk pools, which places AMERIND in a 
difficult position. Having no standards by which to judge 
ourselves causes banks, lending institutions and others to 
question our viability as a provider of property protection 
even with HUD's recognition and approval of AMERIND as a 
provider of self-insurance for Indian housing.
    Number two, federal preemption of state insurance law. 
Currently, the greatest threat to the continued existence of 
nonprofit, self-funded Indian housing risk pools, such as 
AMERIND, is not state or federal competitive-bidding 
requirements, but is unbridled state and tribal insurance 
regulations. AMERIND currently works in 32 states, representing 
over 500 tribes. If these states and tribes are permitted to 
impose their conflicting regulatory schemes and taxes on a 
nonprofit, self-funded risk pool, the ability of those pools to 
carry out their congressional mandate to provide low-cost 
coverage for federally-subsidized Indian housing will be 
seriously impaired.
    AMERIND and the National American Indian Housing Council 
have therefore requested HUD implement a new regulation 
establishing uniform federal standards for self-insurance 
plans.
    And the last is number three, a memo of understanding. A 
great deal of effort has been made to develop coordination 
between federal departments regarding the One-Stop Shop 
Mortgage initiative. One failure of the initiative has been to 
recognize approved providers among the various departments. As 
indicated earlier, AMERIND is the market of last resort in many 
Indian communities. Very few, if any, for-profit insurance 
companies readily offer affordable insurance products in Indian 
country. For this reason, AMERIND is forced to try and respond 
to the ever increasing need. We would strongly encourage a memo 
of understanding between the various federal departments, 
Fannie Mae and Freddie Mac, that approve the hazard protection 
afforded by AMERIND. Once specific regulations are established 
by HUD and AMERIND is deemed to be an approved plan of self-
insurance, this approval should be adequate for USDA Rural 
Development, the Veteran's Administration, and the two largest 
buyers of mortgages, Fannie Mae and Freddie Mac.
    This concludes my remarks.
    [The prepared statement of Kent E. Paul can be found on 
page 153 in the appendix.]
    Chairman Ney. Thank you, Mr. Paul.
    Next is Captain June Sabatinos.

STATEMENT OF CAPTAIN JUNE SABATINOS, VICE PRESIDENT, AMBULATORY 
   CARE SERVICES, TUBA CITY REGIONAL HEALTH CARE CORPORATION

    Ms. Sabatinos. Good afternoon, and welcome to Tuba City. 
I'm Captain June Sabatinos, vice president of ambulatory care 
services at the Tuba City Regional Health Care Corporation.
    At this time, I would like to introduce our board chair, 
Eunice Begay; Lena Fowler, who is a board member; and our chief 
executive officer of the hospital, Mr. Kirk Gray.
    I appear before you today on behalf of our organization and 
I especially appreciate that you were able to go out this 
morning and visit some of our people in their homes. I'm going 
to present a slightly different picture for you today, and that 
is when people have inadequate housing, at some point or other, 
their healthcare is going to be greatly impacted.
    So, I appear before you today on behalf of our 
organization, which just a year and a half ago was a federal 
Indian Health Service medical center. Many of our staff 
continue their federal service through memorandum of agreement 
with the IHS, but our hospital is now a nonprofit tribal 
organization, and it is our goal to become a community hospital 
one day.
    Through the Federal Indian Self-Determination Act, Public 
Law 93-638, our eight-member, all-Indian board of directors 
separated from the federal government for one specific reason: 
To bring decision-making about healthcare needs back to the 
local level where services are provided.
    Historically, the federal government has fulfilled its 
trust responsibility to provide healthcare to Navajos and Hopis 
since the 1920s. A little house that still stands on Main 
Street under the cottonwood trees served as the first, six-bed 
clinic. The first actual hospital, also on Main Street, was 
built in the 1950s. Our second and third hospitals, which we 
still use, were built in the '60s and '70s. Today, we are a 73-
bed, acute care facility with more than 60 physicians on staff 
and a total of 749 employees. Throughout the years, Tuba City 
earned a national reputation for exemplary healthcare within 
the IHS system. Many of our medical and administrative staff 
have been with us for 20 years or longer. We serve a current 
population of more than 35,000 from 11 Indian communities.
    Fortunately, our independent status now allows us the 
freedom to hire more staff as our needs demand. Just last year, 
our board of directors hired our chief executive officer who 
brings with him more than 30 years' of experience in healthcare 
administration. We have also hired our first chief financial 
officer, a human resources director, a new information 
technology officer, a new operating room manager, and many 
others. In fact, my husband and I just recently joined the 
staff just four weeks ago, transferring from Washington D.C.
    I'm here today to inform you of one of our most pressing 
needs, and that is housing for our hospital staff. If you 
travelled here from the airport or a motel in Flagstaff, you 
probably noted the stark beauty of the changing landscape. Most 
significantly, you traveled at least 75 miles on one of 
Arizona's most dangerous highways. Every day, approximately 50 
to 60 of our employees make the same journey twice a day. Each 
travels 750 miles per week just to come to work.
    The reason our staff, Indian and non-Indian staff alike, 
spend three hours a day driving, carpooling or taking our 
hospital van is because we do not have quarters to house them. 
I appear before you today to ask that you assist us in 
acquiring additional housing in order for us to meet the 
expanding healthcare needs of our Indian population. Currently, 
our organization has 258 housing units that are 30 to 40 years 
old. As vacancies occur, asbestos abatement has to be done. 
That makes the housing safer for staff but it also increases 
the waiting time for housing applicants. We currently have no 
available housing, no vacancies, yet 34 current or potential 
employees are on a waiting list for housing, and that wait 
ranges from two to six months.
    Since September of 2003, it has become common practice for 
us to house new employees at the local motels until housing is 
available. Currently, ten employees live in a motel. As a 
result of this situation, we have lost a large number of very 
necessary potential employees. For instance, our laboratory 
currently has eight medical technologist vacancies. During the 
past two months, we have lost three potential employees because 
they have families and they just could not bear the thought of 
having to spend months in a motel with children.
    Currently, there are 16 registered nurse vacancies. If you 
think that the nursing shortage is bad in the metropolitan 
areas, it's even more difficult to attract nurses to remote 
areas. Within the next six weeks, we expect five RNs to start 
employment and they will be housed in local motels until 
housing is available. During the past two months, we have lost 
five registered nurses because of our housing, and three of 
them were very badly needed operating room nurses.
    With the anticipated expansion of our facility and 
services, it's projected that we will require an additional 150 
two- to four-bedroom housing units at an estimated cost of $6 
million to house current and projected employees. We would love 
to have a housing complex like the beautiful housing complex 
that the Apaches were showing us pictures of earlier testimony.
    Our experience has been that when housing is available for 
our staff, they tend to stay in Tuba City for their entire work 
career. The large number of professionals who have stayed with 
us for 20 or more years demonstrates their commitment. It's not 
easy to come to an area like this to provide healthcare. The 
people who come are very dedicated. They fall in love with the 
area and with the people.
    Our housing shortage severely hinders us in recruitment and 
retention of staff. Because we are on a reservation here in 
Tuba City, each governmental institution has its own housing 
complex for its own employees. For instance, the public school 
district has its own teachers' housing. The Bureau of Indian 
Affairs has its own employee housing. As a former IHS facility, 
we have the housing that was available for IHS employees. 
Although the Navajo Housing Authority has low-rent housing in 
Tuba City, our staff does not generally qualify for its use 
because of their income level or not being Navajo or not being 
Native American. Because there is simply not much land 
available locally to be developed, there is no opportunity for 
entrepreneurs to build rental housing to meet community needs.
    If all of the professionals working in Tuba City working 
for the various agencies were able to be housed here, it would 
create a substantial income base for the Navajo Nation and an 
incentive for business enterprises to locate here.
    In summary, community housing is extremely necessary, but 
housing for our professional staff is equally as important. It 
is estimated that a 150 2-3 bedroom complex will cost us $6 
million to provide housing for our staff. I ask you, is there a 
way for us to obtain housing for our staff? We generally don't 
meet the guidelines for housing on Indian reservations. As we 
expand our healthcare system to meet the demand that we have, 
it's critical that we have the necessary staff to do this. We 
cannot meet their demands if we don't have adequate staff. If 
we don't have adequate housing, we cannot meet the needs of the 
healthcare professionals.
    Thank you for offering us the opportunity to testify today, 
and we hope that we have provided the committee with the 
essence of our housing dilemma for healthcare--for housing for 
our healthcare staff. Thank you.
    Chairman Ney. Thank you, Captain Sabatinos.
    [The prepared statement of June Sabatinos can be found on 
page 164 in the appendix.]
    Chairman Ney. Mr. Sossamon.

  STATEMENT OF RUSSELL SOSSAMON, CHAIRMAN, NATIONAL AMERICAN 
                     INDIAN HOUSING COUNCIL

    Mr. Sossamon. Chairman Ney, Ranking Member Waters, 
Congressman Renzi, Congressman Matheson, on behalf of the 
members of the National American Indian Housing Council and its 
board of directors, I would like to thank you for this 
opportunity to participate in the first-ever Congressional 
field hearing in Indian country.
    As the only national organization dedicated solely to 
Native American housing, development and advocacy, you can 
imagine how pleased NAIHC was when you brought this idea 
forward. My name is Russell Sossamon, and I'm both the Chairman 
of the National American Indian Housing Council and the 
Executive Director for the housing authority of the Choctaw 
Nation of Oklahoma.
    Today, I would like to focus on the legislative initiatives 
we hope this committee will support as well as some of the 
issues raised by the committee in preparing for this hearing.
    The passage of the Native American Housing Assistance and 
Self-Determination Act, NAHASDA, in 1996 was a giant step 
forward for Indian housing and the amendments passed in the 
last Congress with the help of this committee moved us forward 
toward the goal of providing quality housing for Native 
Americans. However, challenges remain. For the fourth year in a 
row, the proposed NAHASDA block grant does not include any 
increase to reflect inflation in housing prices, increased 
construction costs, or a growing Indian population. The '05 
proposal also zeros out the Rural Housing and Economic 
Development Program, about $25 million that about 96 entities 
took advantage of last year, approximately 30 of which were in 
Indian country.
    It also zeros out about $2.5 million for NAIHC to continue 
to provide its technical assistance and training specifically 
for tribes, which is designed to build tribal capacity so that 
they can fully utilize the resources that are available and be 
creative in financing to meet the housing needs of their tribal 
peoples.
    You heard mentioned earlier about the momentum that's 
growing in Indian country and about the progress that's being 
made to achieve and bring private financing to tribal areas. 
And you also heard discussed the real possibility of recision 
of loan guarantee authority. Now is not the time to rescind 
that authority. We have seen this progress being made over the 
last three years, and it's a direct result of all the efforts 
of the people that have been before you here today and are 
still before you. These efforts are just about to come to 
fruition, so to eliminate funding or underfund these efforts 
would be to set us back on what's already been gained.
    If you look at it, the mortgage industry has had to be 
created in Indian country, and we have identified specific 
barriers. We have narrowed them down to just a few barriers and 
we have overcome several of them, so now is not the time to 
pull back.
    Also, this flat funding level for NAHASDA makes it all the 
more important. The tribes who administer this housing program 
do it as efficiently and flexibly as possible to meet the 
requirement for data on the effectiveness of the program to 
insure that our goals are being met and that progress is being 
made. Second, the short history of NAHASDA also requires us to 
continue to amend the statute to improve upon what works and 
eliminate the parts that hinder the delivery of housing.
    We understand that Congress has been frustrated with the 
lack of hard data to support the yearly budget requests for 
housing. As was pointed out by the chairman, when Congress 
looks at what we have, all of this money appropriated and then 
looks at the spend out rates, we share your frustration. You 
may be aware that last year, HUD's Office of Native American 
Programs, ONAP, underwent a performance assessment from the 
Office of Management and Budget. ONAP received a poor score due 
mainly to its lack and therefore its inability to measure 
performance, its lack of data and its inability, therefore, to 
measure performance. Rather than through performance itself. We 
had hoped this would lead to swift implementation of data 
collection systems that would allow tribes--to allow for what 
tribes already know, that this program is working. HUD collects 
data yearly on Indian housing plans and annual performance 
reports on such items as the number of overcrowded units, the 
number of units constructed, the number of housing units 
rehabilitated.
    Unfortunately, HUD still does not have a data base that can 
pull this data together to give a national picture. This is 
another symptom of what we see as being a real problem. There 
needs to be an upgrade in the standardization of not only the 
computer hardware but the programs used by agencies and that 
can be accessed and utilized by the private sector at the 
tribes' request.
    While NAHASDA has improved the ability of tribes to serve 
the housing needs of their tribal members, several requirements 
of the Act have continued to hamper progress. In response to a 
call for overall federal housing delivery to Native Americans, 
Senator Tim Johnson of South Dakota introduced the Native 
American Housing Enhancement Act of October 2003, which is now 
cosponsored by Senator Michael Enzi from Wyoming. The bill 
contains the following provisions:
    It amends the 1949 Housing Act which governs USDA housing 
programs to allow the tribes the same rights to Indian 
preference as HUD housing programs. It reestablishes the 
eligibility for tribes in HUD's Youth Build program. It amends 
NAHASDA to allow for the establishment of operating reserve 
accounts for tribes. A technical correction for the treatment 
of program income under NAHASDA. It also amends NAHASDA to 
allow for replacing the requirement of charging no more than 30 
percent of adjusted income to a ceiling of fair market rents.
    As the committee with jurisdiction over Indian housing 
legislation in the House of Representatives, we hope the 
Financial Services Committee will support the passage of this 
legislation before the end of the 108th Congress. This 
committee has raised several specific issues with NAIHC in 
preparation for this hearing that were addressed in our 
detailed written testimony. We are encouraged that two 
questions have focused on two of the areas that are critical to 
the success of housing programs, partnerships and leveraging of 
the first programs and challenges of achieving higher levels of 
homeownership. With the federal government's main Indian 
housing program, the Native American Housing Block Grant, only 
able to produce about 5,000 new units per year nationally, 
looking to other partnerships is the only way that people can 
hope to make progress.
    And, in fact, the very structure of NAHASDA has a lot to do 
with an increase in partnership and leveraging. Indian country 
stands out in its extreme level of need and warrants the 
investment of resources that can fund a more aggressive and 
comprehensive approach to solving our problems.
    New initiatives in Indian country over the past five years 
are to numerous to be recorded here, but a list of the partners 
involved in the provision of Indian housing was included in our 
written testimony.
    Finally, the goal of homeownership is as important to 
Native Americans as it is to all Americans. Native Americans, 
with the complications associated with land held in trust and 
the limited although improving access to financial 
institutions, have not been historically successful in 
obtaining mortgages for homes on reservation. We applaud the 
One-Stop Mortgage Initiative as a step in the right direction 
and feel that the educational initiatives are vital for both 
tribes and financial institutions to not only address the 
complications of doing business on the reservation, but also to 
see the opportunities.
    Before I leave, I'll just remind you of a few things that 
you're probably already aware of but I think are very important 
and worth mentioning.
    Housing has to be approached on a spectrum. Not all folks 
are in a position to be homeowners. They are not ready for 
mortgages. And the very low income people need heavily 
subsidized housing assistance, and that requires substantial 
investment. But, it's also our desire to move these folks up on 
this spectrum of housing, to take them and develop with them 
their individual housing plans, which is also connected to 
their economic well-being.
    So, while we focus and hear a lot about mortgage financing, 
let's not forget those who will need more heavily subsidized 
housing assistance, sometimes as transitory assistance but 
sometimes as permanent assistance. So I would like to continue 
to point that out.
    Another thing is when we talk about housing, remember, it's 
the third thing that's listed on the basic hierarchy of human 
need: Food, clothing and shelter. And as was pointed out 
earlier, it discounts our efforts in other areas such as 
education, healthcare, crime prevention and family development 
if housing is not available. So, what's needed is an adequate 
investment, federal investment as well as private investment, 
in Indian country. And if we put up the investment up front, if 
we can make that investment in the future, it's going to reduce 
the federal cost burden and will also lead to economic security 
in Indian areas.
    Thank you. I will be glad to answer any questions.
    [The prepared statement of Russell Sossamon can be found on 
page 178 in the appendix.]
    Chairman Ney. Thank you, panel.
    I had a question for Mr. Paul on the McCarren Ferguson just 
to clarify. Are you saying that the state regulatory process is 
hampering the ability to properly do business?
    Mr. Paul. As respects Indian country, McCarren.
    Ferguson has an impact on Alaska and Oklahoma because they 
are people reservations, they are not land-based reservations. 
So it's tough to distinguish the authority of a tribe to 
exercise its sovereignty in the area of risk pooling insurance 
in those two states. So from that extent, it's a problem.
    Chairman Ney. As you're aware, we have a federal charter 
bill that's starting to wind its way through the House 
committee. Would you see that the federal charter bill, if it 
passed, would be a help or would it not be?
    Mr. Paul. It would be of help if it has specific 
information relative to Indian country and recognizes the 
tribes' abilities to create insurance law.
    One of the problems that we see of being the only 
organization providing hazard protection is a lack of uniform 
insurance code within Indian country. And with federal help, 
that would be nice to have that so it's consistent. Or for 
anybody that does business in Indian country.
    Chairman Ney. Thank you.
    Ms. Waters. I would like to thank the panel for the time 
that you have spent with us today, the information that you 
shared with us. And I suppose if we had a couple more weeks to 
spend here, we could have a real in-depth conversation with you 
about all of this information that you have shared with us 
today.
    I'm going to attempt to ask a few questions of several of 
you, and I'm going to try and make my questions as concise as I 
possibly can. And I'm not going to require long answers, and I 
would hope that you could respond quickly so I could turn the 
microphone over.
    For Fannie Mae, I work very closely with Fannie Mae and I 
like the fact that they now have the flexibility to have 
partnerships that can do a lot of creative and innovative 
things. I want to ask you, given that Fannie Mae has purchased 
these mortgages on the secondary market and they appear to be 
working with organizations such as Ms. Konski has identified, 
because you are so connected to over 112 banks, you have some 
influence there, why can't you help to get more banks 
interested in providing mortgages on the reservation?
    Ms. Green. Congresswoman Waters, I think it is an education 
process, and that's what we're working through with our Native 
American Business Council, with our partnership offices that 
are on the ground working with the lenders on a daily basis, is 
to educate them more about the process of lending on Native 
American lands.
    Ms. Waters. Okay. That's good. And what I think probably 
could happen is given the level of influence you have with 
these banks, because you're picking up the mortgages on the 
secondary market, it perhaps would be helpful to identify how 
you do this, whether it be through holding seminars, or 
identify maybe 50 to a hundred, have them identify individuals 
in the banks who will make this a specialty and learn about it 
so that each of these institutions will have someone that can 
implement that. I just want to kind of put that into your 
thinking.
    Wells Fargo, how many mortgages have you made here?
    Mr. Hatathlie. Is that in reference to the Navajo Nation?
    Ms. Waters. I beg your pardon?
    Mr. Hatathlie. Reference the Navajo Nation?
    Ms. Waters. Yes.
    Mr. Hatathlie. With the Navajo Nation, recently the Carigan 
Development Project in Window Rock, St. Michaels, Arizona, we 
have closed 39 184s and four conventional loans. However, 
that's fee lands where we can utilize 184 mortgage product.
    Ms. Waters. What lands?
    Mr. Hatathlie. Fee land. It's fee land surrounded by Indian 
operating area, so it allows us to utilize the 184 program.
    Ms. Waters. I'm really talking about where it's most 
difficult to do it where it's trust land.
    Mr. Hatathlie. Trust land, we have three transactions that 
we are about to----
    Ms. Waters. I can't hear you.
    Mr. Hatathlie. Trust land, we have about three transactions 
about to complete here in Tuba City, which would be a purchase 
of an existing home, construction to perm financing and--two 
construction to permanent financing. So three in Tuba City.
    Ms. Waters. I really do appreciate all of the education 
that you described and the kind of outreach that you're doing, 
but at some point in time, it really does have to resolve the 
matter of mortgages in order to move this agenda.
    Miss Konski, how do you do it? Can you help us to 
understand--I have heard some contradictions here today about 
the ability to make these mortgages based on the land trust 
questions and whether or not there's one law, tribal law, to 
deal with foreclosures and all of that. How do you do it?
    Ms. Konski. Well, obviously, that's the first thing I do 
look at, is making sure that the tribe is familiar with the 
One-Stop and also approved that initiative.
    I'm sure that the jurisdictions are in place should that 
become necessary. Okay? So that's the very first thing that has 
to happen.
    The next thing that I have to look at is obviously making 
sure that the family is really ready to purchase, to qualify 
for that mortgage, whatever product I'm choosing. Once I 
sometimes know that I have that family ready, I then need to 
look at the issues that come with the particular land that they 
are going to buy.
    Ms. Waters. Well, what I'm hearing and reading and I'm 
picking up on is there are a lot of denial and turndown rates 
in Indian country, Navajo Nation. And someone told me earlier 
today that some of the turndowns, when you look at them, they 
look as if they would qualify for conventional loans but they 
are turned down. And what's absolutely remarkable on some 
information I just saw is that the foreclosure rate is very 
low.
    So what is happening here?
    Ms. Konski. I can't answer that because I don't have that 
many turndowns. My issues don't come down to the family not 
qualifying for the loan, not when you have that many products 
and that many funds available to help families. When you put 
together a combination of, say, NAHASDA funds or the Relocation 
Act funds, mortgages are possible. Products are possible. I 
don't have that many turndowns.
    One of the things I always tell my family when I begin to 
work is I can only work as hard as they can work. Sometimes it 
does take time. In my opinion, the challenges for me come 
specifically with getting the information from the BIA.
    Ms. Waters. BIA is your biggest obstacle?
    Ms. Konski. Yes. Biggest obstacle for me is BIA.
    Ms. Waters. So it is possible to do. And if we could 
expedite the issues with BIA, you could do even better.
    Ms. Konski. Particularly if you could expedite the issues 
with BIA.
    Ms. Waters. I understand that you had a recent number of 
closings.
    Ms. Konski. Recently, as recently as last week, Friday, I 
did in fact close nine separate loans for the Cocopah Indian 
Housing Authority and Development, located in Summerton, 
Arizona. That represented four tri-plexes and five single-
family units, all put together with the Cocopah Indian Housing 
Development as the borrower. The tribe themselves did the 
interim financing. My 184 product came in and paid off the 
permanent loan, paid off the interim financing for the 
permanent 30-year mortgage.
    Ms. Waters. If it wasn't for the fact that this was a 
competitive business, I would ask you to teach Wells Fargo and 
some of the others how to do this. But I know it's competitive, 
but I am really interested in trying to get that information to 
others.
    Mr. Maryboy, your testimony centered a lot around the need 
for the private sector to be more involved. But as I see it, 
the private sector needs to want to be involved. They need to 
want to do this.
    Do you have any suggestions for how to get the private 
sector more interested?
    Mr. Maryboy. The particular area that you are alluding to 
is a challenge for the Navajo Nation, and I'm asking Congress 
to establish a bylaw and to establish a blue ribbon commission 
to discuss or to research this particular area. But we do 
believe that there needs to be--this is a problem and a 
solution needs to be provided in this area.
    Ms. Waters. That's because you think there is some fear of 
jeopardizing trust lands by getting the private sector 
involved, and I think there was some reference to how they did 
it in Palm Springs? Is that what you're talking about?
    Mr. Maryboy. Something similar like that.
    Ms. Waters. Mr. Parks, there seems to be some contradiction 
in your testimony about the inability to get involved in 
picking up the secondary mortgages, I guess, because of the 
land trust issue. I think there was some discussion in your 
testimony that you didn't do it.
    So what's the contradiction here?
    Mr. Parks. I wouldn't think of it a contradiction, but what 
I was trying to do from my testimony was to tell you that we 
had some limited success but it remains a tough thing because 
we are dealing with this narrow slice of the Affordable Housing 
Program. It doesn't mean that the other regulators are 
necessarily going to pick up on the regulatory interpretation 
of the Federal Housing Finance Board.
    And so a lot of the lenders will say, gee, okay, in the 
case of the Affordable Housing Program, your regulator was 
allowing you to take something other than title in sovereignty. 
It's not necessarily the position of OTS, FDIC, or OCC. So when 
a lender goes to get examined, for instance, there they still 
may be obstacles they have to overcome.
    Ms. Waters. So the 38 banks that you have some influence on 
may have a way to do it if we can clear the way.
    Mr. Parks. Sure. I think it still remains one of those 
fertile grounds. I think what we have right now is the 
opportunity to build upon something that's been done through 
the help of the Federal Housing Finance Board.
    Ms. Waters. Mr. Paul, you referred to a memo of 
understanding, since you are the market of last resort, and 
since Fannie Mae has given you some kind of acceptance, you're 
asking why can't you have this memorandum of understanding 
because you are willing to do it and lot of others are not. 
What would you have us do?
    Mr. Paul. Correct. It was nice of Fannie Mae to give us a 
national recognition. Part of the problem in Indian country is 
we deal with a lot of different lending institutions. And when 
we are dealing with small community banks or Federal Home Loan 
Bank or Fannie Mae, we have to go out and consult with them to 
try and to get them to approve us because we are not an 
insurance company. We are a self-insurance pool owned by the 
tribes.
    With the approval of Fannie Mae, which reviewed our 
financial position and has graciously accepted our Indian 
mortgages purchased on their behalf in which we provide hazard 
insurance, we were hoping to leverage that with USDA Rural 
Development, with the Veteran's Administration and the other 
lenders so that we have one national letter through a mutual 
understanding between the various departments so it would 
preclude us from having to go out and deal with every local 
institution that loaned money and where we provided hazard 
protection in Indian country. It would be a cost-effective 
measure.
    Ms. Waters. Thank you.
    Miss Sabatinos, I appreciate your testimony but I wanted to 
get over to Mr. Sossamon to ask about funding.
    You believe the key to our ability to develop more housing 
is the federal government's commitment for funding. Would you 
just tell us one more time?
    Mr. Sossamon. Absolutely. Well, beyond the treaty 
commitments, which I think the treaty commitments were designed 
to--the federal government had promised to assist Indian 
tribes, not take us on as welfare recipients.
    What we need is, what you see happening in other states and 
communities, is enough commitment from the federal government 
to develop our own infrastructure, to allow us at some point to 
achieve self-sufficiency.
    Ms. Waters. Infrastructure development.
    Mr. Sossamon. Exactly. Infrastructure. And, also, as I 
talked about, the Rural Housing and Economic Development 
Program, these type programs that allow us to create within our 
own tribal areas a private sector of our tribal members. 
Because what draws private investment is return on that 
investment. And with the small profit margins that our infant 
mortgage industry has to offer at this point, we need to look 
closer to our own human resources and develop jobs within that 
private mortgage industry of our tribal people. And that 
develops our local economy. And not only our mortgage lending 
industry can be developed, but our tribal construction, private 
construction can be developed.
    And once we start to generate those tribal businesses, and 
private tribal businesses start to generate income, then the 
rest of the private market is going to follow suit.
    Ms. Waters. Thank you very much.
    Mr. Chairman, thank you for allowing me the extra time.
    Chairman Ney. Congressman Renzi.
    Mr. Renzi. Thank you, Mr. Chairman.
    I want to pose a question to the Honorable Mark Maryboy. 
The first question--I know we were talking about private 
investment. Ms. Waters touched on the issue.
    Wouldn't it be true that private investors would be able to 
approach the Navajo Nation if we didn't have this impediment of 
this business leasing issue? We have heard it touched on today. 
Isn't that one of the major things we can look at, whether it 
be legislation to help fix that or working with BIA? If you are 
approached by private industry, I mean, isn't it an immense 
amount of time they have to go through in order for them to be 
able to approve this leasing, Mr. Maryboy?
    Mr. Maryboy. I agree with the statement that you made 
there, Congressman. I would like to give a brief time to our 
executive director of NHA, Mr. Chester Carl.
    Mr. Renzi. State your name, please, for the record.
    Mr. Carl. Again, Chairman Ney and members of the committee, 
your question is very much to the point.
    As you know, the world is ruled by property law, both 
fiscally and also legally. And so long as you own property, 
then you have some type of leverage, whether in the private 
world or the world abroad.
    And that's basically what's lacking in Indian country. So 
long as you don't have true ownership to the land versus the 
trusts, then you don't have that leverage with a private 
institution. So, in order to address that, one of the things 
that we did related to the mortgage industry is we were able to 
design a mortgage program that is 100 percent guaranteed by the 
Navajo Housing Authority and we were able to negotiate with 
Fannie Mae to get to that point. And that guarantee, we use 
NAHASDA construction dollars, that's construction financing, 
and then what we do is we take families that have high debt 
ratios, high 65 percent, take them through home buyer education 
and get them done to a lower level to get them qualified. We 
take families that have no credit history but have dealings 
with pawn dealers or trading posts, take their records and take 
that into account to get them qualified.
    By doing so, we see this as a bridge to take them from the 
old assistance program to a more conventional setting. And it's 
going to take time, but the transition is there.
    And what we have done, also, with Fannie Mae is develop an 
offset reserve account so that if there is an unforeseeable 
foreclosure, then we are able to take monies out of that 
account and pay off the delinquency. And the Navajo Housing 
Authority also provides all the foreclosure process, as well.
    So, in addition to many of the stories that you hear, this 
is one of the ways we can provide that bridge to allow the 
financing world to come in.
    Mr. Renzi. I appreciate your explanation.
    I move to Freddie with Wells Fargo. You talked about 
dealing with first generation home buyers. I know you all have 
gone out of your way to find methodologies to really push 
financial counseling, literacy programs. I'm going to ask a 
question in a minute about why it is that we have $54 million 
left and we haven't spent it down. Okay.
    My intuitions tell me that one of the reasons is because we 
are dealing with a generation whose fathers and mothers didn't 
buy homes and teach them how to buy homes. They are having to 
go through an application process. We learned in the Education 
Subcommittee that many Native American people never go to 
college because the application process to go to college is too 
complicated. And my thought is that maybe it's the same thing 
for homeownership, that the application process, while regular 
Americans go online and get mortgages within 48 hours, the 
application process for Native American people must be a huge 
stumbling block given if you are the first one in your family 
who's ever even thought about owning a home.
    And so I want to ask you about the successes that you've 
had with Wells Fargo as it relates to counseling programs or 
breaking through this impediment, please.
    Mr. Hatathlie. I had mentioned earlier that we have a 
training program, community development training program for 
home buyers and counselors and also leveraging and resources, 
tribal resources, to initiate community development and housing 
opportunities. That training is in conjunction with the 
Neighborhood Reinvestment Corporation. So that's how we are 
addressing that issue, home buyers education. It's designed for 
tribal leaders, housing entities, lenders, and anyone, 
practitioners who are involved with lending on trust land. 
That's how we are addressing that issue.
    You also have posed a question as to why do we have so 
many--so much money available and we are not lending. You know, 
we could describe how HUD 184 program is set up, how the 
process works. I have attended training where it says this is 
what we need to do and, yes, I come back to the Navajo Nation, 
but what happens is I sit down and meet with a client and we 
run into lease issues, we run into title status report issues, 
archaeological clearance, environmental assessments, 
recordation. By the time you are finished with a client, it is 
no longer a 60-day deal. It has gone on to two years.
    Mr. Renzi. Sixty days being--you have 60 days to access it 
and then you can't get it.
    Mr. Hatathlie. No. Your traditional to close a loan and 
fund, you look at it with 60 days. But with Navajo, being it's 
trust land, it goes beyond that. And by that time, the 
applicants have pretty much backed out or you're still waiting 
for a document.
    Mr. Renzi. That's a good question. I can hear Ranking 
Member Waters.
    Renee, how do you get around the 60 days?
    Ms. Konski. I don't get around the 60 day. First of all, on 
a fee simple transaction, yes, for Freddie and me, both, I 
think we both agree, we could--normal transaction, fee simple 
land, you're talking 30 days.
    When you're talking trust land and you're talking waiting 
for your environmentals, waiting for your approved lease, 
waiting for your title status report, your home buyer 
education, you're not talking 60 days. You're lucky to be 
talking a year and a half, two years.
    Mr. Renzi. So the 60 days is a lock in the interest rate, 
right?
    Ms. Konski. No. There is no such thing as a lock in the 
interest rate when it comes to Native American lending, which 
is a whole other ballgame. Traditionally, if I am purchasing a 
house in Phoenix and I go out and I build this home and now 
I've taken out this construction loan to develop and build my 
house, along comes my permanent 30-year mortgage. My 30-year 
mortgage is going to pay off that house and provide me with a 
30-year mortgage.
    A lot of the problems that I come up against in dealing 
with both the Navajo and many of the other reservations as well 
is we get that construction financing in place, we have the 
house completed, we are ready to put that permanent mortgage on 
there and give that family that 30-year fixed mortgage rate. 
The problem is, before we can complete that transaction, we are 
again at the mercy of the BIA waiting on that title status 
report. That title status report is telling us, really, who is 
the beneficiary of that land or that lease. In order for my 
mortgage to come in and correct that one, I have to have a 
correct one in place so I can then close the loan.
    Mr. Renzi. Is the BIA title office understaffed and that's 
the reason for the wait, or is it----
    Ms. Konski. It is my personal opinion, upon visiting the 
BIA offices, and more than just one, they do fluctuate between 
local BIA offices. That's where the problem is. It's the 
staffing, it's the budget, it's the----
    Mr. Renzi. We are going to pay a visit as a result--this is 
really an idea that deserves credit to Congresswoman Waters. We 
are going to pay a visit to the BIA offices and see if we can 
light a fire.
    Mr. Sossamon, I appreciate your testimony, sir. We're going 
to talk about why we haven't spent it. You and Renee have now 
talked about the fact that $54 million is left in the kitty and 
we are going to turn it back to the federal government unless 
we use it, okay? And we are not able to use it because of the 
impediments and the roadblocks with the titles and the 
environmentals.
    Why do you think we didn't spend it down?
    Mr. Sossamon. Why do I think we need to spend it down?
    Mr. Renzi. Why do you think we weren't able to spend down 
the $54 million?
    Mr. Sossamon. Well, a lot of it goes to what we have 
identified here today. And I hate to pick on the BIA because 
they are not here to defend themselves, but the problem is--and 
it was mentioned earlier--that there's a 113-year backlog in 
getting title status reports. And you just asked do you think 
they have an adequate staff to deal with that. The answer is 
no. They cannot deal with processing any kind of title status 
report request.
    So we need to now maybe look at funding to clear up that 
backlog. And perhaps the way to do it is not add more staff to 
the BIA, but contract that out to the individual tribes 
themselves and allow them to establish their own procedures to 
sort out these records and establish their own title offices 
that will benefit them in the future. And then it's locally----
    Mr. Renzi. Stay there. So you're saying forget building an 
agency in Washington and all the bureaucratic little arms that 
go along with it. Give the ability of doing the title searches 
directly to the Navajo or the Hopi people or the Apache people. 
And then what would do you? You would move the federal 
oversight--because it has to be certified, right?
    Mr. Sossamon. Exactly.
    Mr. Renzi. So we would essentially move our people into 
their location and handle it at the local level? And take the 
backlog with them, then.
    Mr. Sossamon. They would have the role of oversight and 
review, but the actual work would be done right here where the 
people understand what's going on.
    And, also, it goes toward doing what I said we have made 
great strides towards in the last three years, creating a 
mortgage industry in Indian country. Not imposing it from 
outside Indian country, but creating our own mortgage industry.
    Mr. Renzi. We are going to make it a reality. We are going 
to find a way together, bipartisan, to make it happen.
    Mr. Sossoman. Thank you.
    Mr. Renzi. You're welcome.
    I also want to thank Captain June Sabatinos for the visit I 
paid about two weeks ago to the hospital here in Tuba City. 
Great facility. We have to bring money home to help. It's one 
of the best regional facilities I have ever visited, 
particularly as it relates to the health issues you saw with 
the children today. We talked, and the reason I asked you to 
come was a story you told me about the fact we are seeing so 
much turnover on the staff, the inability to retain good, high-
quality people. You talked today in your testimony, three 
nurses you've just lost in the acute emergency area, if I'm 
correct. I'm summarizing your testimony.
    You also talked about a gentleman you had who was committed 
to serving the Navajo people who actually lived in a tent for 
several months. What can we do? Is multiple family housing, if 
we had a compound for the hospital--many times, when we go 
overseas, you'll see American interests represented, hospital 
staffs, teaching staffs, you'll have a housing compound.
    Is that kind of a formula possible?
    Ms. Sabatinos. Yes. That is what we need, is a housing 
compound or a complex. We have very limited land that we could 
put this building on, and we would certainly need the funding 
to do it, but that would basically meet the needs of our 
facility.
    Mr. Renzi. Thank you.
    Finally, I want to point out the good work of the 
Indigenous Community Enterprise. I know, Freddie, you have 
worked with them, you serve on the board. We visited a hogan 
today, we saw the ability for you all to use small diameter 
wood.
    Can you just expand on that just a little bit and talk 
about some of the, maybe some of the impediments or where we 
can assist in helping you produce more units for the people? 
And I also heard that you're also thinking about using multi-
family or you're expanding your product base.
    Mr. Hatathlie. Being a board member for Indigenous 
Community Enterprises, presently, right now, I have tried 
working with them where we could go through the 184 program. 
And being that the hogan octagon shapes are not your 
traditional homes, you know, that HUD would finance, you know, 
being that it's non-conforming, we had discussions with that to 
see how we could utilize the log hogans to finance, but we were 
unable to do that.
    We met with the marketing person for Southwest Traditional 
Log Homes and also the underwriters of HUD, and that's 
something that's still being discussed. I'm also, Indigenous 
Community Enterprises is working with a local chapter how they 
could establish an elderly compound type of homes, and that 
still is in the works also, too.
    So they have really stepped up with the limited funds that 
they have been utilizing on their part.
    Mr. Renzi. Thanks, Freddie.
    Thank you, Mr. Chairman.
    Chairman Ney. Mr. Matheson.
    Mr. Matheson. Thank you.
    This may circle back to an issue we talked about, sort of 
at the start of the hearing, relative to utilities reaching 
specific housing.
    Mr. Maryboy, I noticed in your discussion about the need 
for the blue ribbon commission to address these issues and the 
impact on sovereignty and whatnot, you mentioned something that 
applies to something as simple as a utility right-of-way. Is 
that one of the impediments to getting electric lines strung to 
these houses today.
    We were in two different locations today, one was not in 
the Bennett Freeze, where there is housing and there is local 
distribution lines within a stone's throw away, and they are 
not hooked up. Did I understand your testimony that certain 
rights-of-way, is that one of the impediments?
    Mr. Maryboy. I think the commission could try to oversee 
the whole array of projects that could be included, utility, 
roads, and the like.
    Mr. Matheson. It struck all of us as a pretty strange thing 
to see the electrical lines so close and not hooked up.
    Miss Konski, I had a couple questions for you.
    You mentioned that a fee simple transaction could be done 
in maybe three days and then trust lands, two years. We talked 
about the BIA title issue, and you also mentioned there is the 
environmental and you're stuck waiting on that for a 
substantial amount of time.
    Are there other factors that cause the delay beyond those 
two?
    Ms. Konski. Utilities can sometimes cause a delay. In 
getting my utilities to my house, they have in the past caused 
me a small delay. That's a fact.
    Mr. Matheson. You mentioned you completed, was it nine 
transactions a week ago?
    Ms. Konski. Correct.
    Mr. Matheson. And they were all 184 loans?
    Ms. Konski. All 184s.
    Mr. Matheson. Were all of those 100 percent guaranteed 184?
    Ms. Konski. The 184 is not a full 100 percent guarantee, 
but it's very close.
    Mr. Matheson. If the percentage of that were to have been 
dropped lower, would that put those transactions in jeopardy?
    Ms. Konski. No. It's not my belief it would have. You've 
got the housing authority, who has just built the houses and 
put all that money out to build all those homes. They are going 
to take families, put families in that are going to qualify and 
assume those mortgages in the near future. If they have the 
money to go out and build those homes and they are coming in 
to, say, a 98 percent guarantee--and I'm talking about getting 
a mortgage for, the housing authority themselves----
    Mr. Matheson. I'm just asking what if it goes lower, to 90?
    Ms. Konski. Oh, what if it gets--it does get lower. An 
example of that is a USDA loan. That is a 90 percent guarantee.
    Mr. Matheson. Maybe I'm having trouble articulating my 
question.
    Ms. Konski. Are you talking about guaranteeing my mortgage?
    Mr. Matheson. I'm talking about 184 loans, at the guarantee 
levels that you have now for those transactions you've done. If 
we are limited, if the word comes out where the 184, those are 
not allowed to be guaranteed at that level any more, it has 
dropped down--I don't know if it's 80 or whatever----
    Ms. Konski. Okay. Proposed.
    Mr. Matheson. Is that going to put those transactions in 
jeopardy?
    Ms. Konski. I believe it would have an impact, yes.
    Mr. Matheson. Thank you.
    Mr. Parks, I guess I get the impression that the different 
Federal Home Loan Bank offices have some level of autonomy. Mr. 
Maryboy's own testimony indicated they like the Seattle Home 
Loan Bank.
    Is there communication between the different offices about 
products and approaches? Do you talk to Seattle?
    Mr. Parks. What you've got to remember, the Home Loan Banks 
are all separate entities. The only thing, we are cooperatively 
owned by our own, individual membership, and the only thing we 
do is issue debt collectively. There are separate boards, they 
are actually separate institutions. So you can think of them as 
12 separate institutions that have no interaction.
    We do talk, and I think what happened was, in Seattle's 
case, they at one point were more comfortable with the fact 
that, subject to their regulator's interpretation, with taking 
a risk. We tend to be a more conservative bank and the culture 
of our board of directors is if we don't have some 
certification, we are uncomfortable with that.
    So we pursue the route of getting some kind of 
certification and creating some type of certainty that if, in 
the worst-case scenario, our regulator is going to find that's 
okay. And that's what we have found. So that's why they are 
able to do more.
    And everybody has different relationships. We, our 
relationship to the Navajos is obviously strengthening. Our 
relationship with other tribes is stronger than with others.
    Mr. Matheson. Well, I appreciate the panel.
    Mr. Chairman, I'll give it back.
    Chairman Ney. What we will do is I will also note for the 
record that members may have additional questions for the panel 
and they may wish to submit them in writing.
    Without objection, the hearing record will remain open for 
30 days for members to submit written questions to the 
witnesses and place their response in the record.
    And also for the record, if I can read Mr. Johnson's 
handwriting, bear with me, these will be submitted into the 
record by these individuals, organizations, or tribes. Rosebud 
Sioux Tribe, Navajo Partnership for Housing, Arizona Department 
of Housing, Cameron Chapter of Housing, the testimony of the 
Blue Tribal Housing Authority, Choctaw Nation Housing 
Authority, Spirit Lake Housing Authority, Housing Authority of 
the Village of Winnebago, Lower Brule Sioux Housing Authority, 
Trenton Indian Housing Authority and Crow Sioux Housing 
Authority.
    [The following information can be found on pages 236, 222, 
213, 217, 219, and 235 in the appendix.]
    Chairman Ney. Let me see if I can make a few closing 
remarks before turning it over to my colleagues. Let me just 
say that I appreciate all three panels and I just think the 
testimony was well worth the trip here. We see things in D.C., 
we read about things and we get research, but being here and 
visiting, going to the locations today, but also being able to 
get your input today, and the other two panels, is invaluable.
    Obviously, we are going to have to go back and look at 
issues, and I think BIA, it's very clear, is going to have to 
be looked at. There is also legislation that is pending in 
Congress where it's going through the system. The federal 
charter is going to be also important for us to look at as to 
how it applies, which you've raised an issue has not been 
discussed at least to my knowledge in Washington. If we do a 
federal charter, how does it apply to the Indian nation. I 
think we need to be cognizant of that.
    Home Loan Banks, there is the question of the implication 
for the entire country, but also the Indian nation. And I think 
also with Fannie Mae and the flexibility for programs, and if, 
in fact, some of the legislation being talked about takes that 
away from Fannie Mae, how this could affect, also, the Indian 
nation and their ability to devise programs.
    So I think there is a lot of other issues now that have 
come to the surface, but this has been the high note for me, 
well worth the trip to be here.
    Let me also once again thank the entire staff of Financial 
Services, Tallman Johnson, Cindy Chetti, Jeff Riley, Jaime 
Alisiga, and also Congressman Renzi's staff, Alix Crockett and 
Joann Keene, and most of all my colleagues and Walter--I'm 
sorry, Walter Phelps.
    But let me just say that Congressman Matheson, I appreciate 
all of your work on this issue, your diligent work. And I can't 
speak enough for our ranking member, Ms. Waters of California, 
who has been so patient to go through how many hearings in the 
House subcommittee and yet still has a smile. So her work has 
been invaluable and her concern and caring for many, many 
issues and, obviously, this one in particular. And also 
Chairman Mike Oxley and Ranking Member Barney Frank, who also 
made this possible.
    And last but not least, my colleague Congressman Renzi, who 
makes all of us aware every day in the U.S. Capitol about 
concerns of the Indian nation. I appreciate his idea to do 
this.
    Ms. Waters. Thank you very much, Mr. Chairman. First, I'd 
like to thank you for holding this hearing. This absolutely 
could not happen without you. Your willingness to come here and 
to put your staff to work, to organize this hearing, is 
commendable, and I'm delighted that I have had the opportunity 
to be here today to learn more and to understand better what we 
can do in Congress. So, again, I would like to thank you.
    I'd also like to thank Congressman Renzi, because I know 
that it's his advocacy and his request to you that caused you 
to respond. We have talked about this, Congressman Renzi and I, 
on any number of occasions. We have talked about the plight of 
Native Americans. He's described this to me in conversations, 
but I had to come here to see it, and I thank you for giving me 
that opportunity. I'm delighted to be here with you.
    Let me just say to our audience here today, I have traveled 
extensively and I have traveled extensively to many third world 
countries, and what I saw today is similar to what I've seen in 
some of the most impoverished areas of the world. What I saw 
today is synonymous with what I saw when I first visited the 
``Bountosawns'' in South Africa, and it's appalling. It's 
unacceptable, and we must use whatever power we have in 
Congress to change the plight of Native Americans here and 
everywhere.
    I would like to just close by saying I represent a rather 
diverse district. One area of my district is a poor area, but 
it is heaven compared to what I saw here today. When you hear 
discussions about South Los Angeles and people who are in 
poverty, I want to tell you, again, when you compare it to what 
I saw today, it's almost as if those people who are described 
as living in poverty live in luxury. This is absolutely 
unconscionable.
    So being here today helps me to know how I can better 
support changing the ability for Native Americans and for the 
Navajo Nation to do something.
    What's encouraging about all of this is the resources that 
are here. We have the possibility to do this. It appears that 
there's too much bureaucracy. I think perhaps there are some 
people who may have gotten a little bit soft on the job and 
they aren't doing everything that they could do. I don't know. 
I don't know, but I think we need to figure that out. And, 
clearly, the Bureau of Indian Affairs should have been here 
today. The fact that they are not here means that I know Mr. 
Renzi and my chairman is going to not only talk about paying 
them a visit, but maybe helping them to understand that if you 
don't utilize the power that's given to you, maybe you don't 
need to keep it. So, I'll just put that out there.
    So with that, I'd like to give the microphone back because 
I know Mr. Matheson, Congressman Matheson has a lot that he 
would like to say. On the way here, he was describing to me his 
challenges and how he borders this entire state and what he's 
trying to do. So with the two of these gentlemen working 
together representing both sides of the aisle and engaging all 
of us, I am extremely optimistic, no matter how difficult it 
gets.
    Again, I would like to thank you, Mr. Chairman.
    Mr. Matheson. Well, I don't have a lot to say, fortunately. 
But I often like to tell people that it's always good to get 
out of Washington D.C. And spend time in the real world, and I 
think that's what we have had a chance to do today. And I think 
it's been a great experience for me and I suspect for everyone 
else here on the committee.
    But I want to thank all of you for coming today. I think 
it's really important that in this system of democracy, we 
participate, and I thank you for taking your time to do that. I 
have learned a lot today and I want this process to continue.
    But it's my pledge, and I think I speak for everybody, it's 
our pledge that we are going to work the best we can to make 
progress on all these issues.
    Chairman Ney. Thank you. We will give closing comments to 
Congressman Renzi.
    Mr. Renzi. Thank you for letting me wrap up.
    I want to begin by thanking everyone here who has sat 
through a four-and-a-half, five-hour hearing, those of you who 
came out from the community, taking time away from your 
families and businesses and obligations to share with us, all 
the panels and their testimony, some of it very riveting. It's 
true patriotism to engage in the great debate, and I thank you 
very much.
    I have to thank Chairman Ney. The idea of making history, 
him allowing us to come out here, him making history and 
bringing all of us with him, to have for the first time 
Congress address Native American Indian housing issues in the 
field truly is historic. It took his leadership to get it done.
    I have been to many hearings in the past. I have never been 
to a hearing where Republicans and Democrats came together so 
well. I want to thank Ranking Member Congresswoman Maxine 
Waters from California. I was so surprised to think that we got 
together to see the conditions because it's so severe out there 
that over the years to come, as we're wrestling with this, 
whether you be Republican or Democrat, or who is in control of 
the House or who is in power--I whispered to Ranking Member 
Waters that maybe some day, you know, if you guys are in power, 
at least you'll have been able to see firsthand the conditions. 
So it doesn't matter who is in power. We will work together to 
get through the issues.
    And my neighbor to the north, Jim Matheson, Congressman 
Matheson, has been a great friend in Washington. We work hard 
together on the issues as it relates to housing. He is taking 
such a wonderful lead on the issues relating to uranium. We are 
looking to have a workshop together in Washington as it relates 
to those issues.
    If you would allow me, please, there is a couple people I 
want to acknowledge. I want to acknowledge the members of the 
Assisted Independence Program here in Tuba City. I know you 
have strong concerns today. I wish I had done more to 
acknowledge you earlier on. I'm thankful I had a chance to talk 
to you briefly. My Window Rock office, Walter Phelps, my 
personal assistant Joann Keene and myself personally will meet 
you with and in future endeavors we would like to hear your 
testimony publicly.
    I also want to acknowledge a friend who is--a couple 
friends who are with us today. As many of you are aware, we 
lost Lori Piestewa, the first Native American ever killed in 
combat. And Terry and Percy Piestewa and Lori's two children, 
Brandon and Carla, have sat through the last hour and a half 
hour of this hearing. They are beautiful people. Terry and 
Percy, if you would stand up and be acknowledged.
    I think Lori would be proud that we are here today in her 
hometown. Lori represents the warrior spirit of the Hopi and 
the Navajo people. The women of their ancestry would stand next 
to their men and fight. They did not flee. And Lori represents 
that tradition and she deserves to have a mountain named after 
her, let me tell you.
    Also, in closing, let me say this. I want to say thank you 
to Mr. Andrew Todd, who is the superintendent of the Greyhills 
High School where we stayed today. And he was such a great 
hope, showed great hospitality.
    And, finally, to the staff of the Navajo Housing Authority 
for your housing, your refreshments, the information booths you 
set out today. Thank you all very much for being with us today. 
In my opinion, you are all true patriots. May God bless you. 
Thank you.
    Thank you, Mr. Chairman.
    Chairman Ney. We are adjourned.
    [Whereupon the subcommittee was adjourned.]


                            A P P E N D I X



                              May 3, 2004


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