[Senate Hearing 116-150]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 116-150
 
  LENDING OPPORTUNITIES: OPENING THE DOOR TO HOMEOWNERSHIP IN INDIAN 
                                COUNTRY

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

                                HEARING

                               before the

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 16, 2019

                               __________

         Printed for the use of the Committee on Indian Affairs
         
         
         
         
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]         






                            ______

             U.S. GOVERNMENT PUBLISHING OFFICE 
 39-745 PDF           WASHINGTON : 2020
 
         


                      COMMITTEE ON INDIAN AFFAIRS

                  JOHN HOEVEN, North Dakota, Chairman
                  TOM UDALL, New Mexico, Vice Chairman
JOHN BARRASSO, Wyoming               MARIA CANTWELL, Washington
LISA MURKOWSKI, Alaska               JON TESTER, Montana,
JAMES LANKFORD, Oklahoma             BRIAN SCHATZ, Hawaii
STEVE DAINES, Montana                CATHERINE CORTEZ MASTO, Nevada
MARTHA McSALLY, Arizona              TINA SMITH, Minnesota
JERRY MORAN, Kansas
     T. Michael Andrews, Majority Staff Director and Chief Counsel
       Jennifer Romero, Minority Staff Director and Chief Counsel
       
       
       
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on October 16, 2019.................................     1
Statement of Senator Cortez Masto................................    54
Statement of Senator Daines......................................    49
Statement of Senator Hoeven......................................     1
Statement of Senator Schatz......................................    47
Statement of Senator Smith.......................................    52
Statement of Senator Tester......................................     3
Statement of Senator Udall.......................................     2

                               Witnesses

Kunesh, Patrice H., Director, Center for Indian Country 
  Development; Assistant Vice President, Federal Reserve Bank of 
  Minneapolis....................................................    26
    Prepared statement...........................................    27
Kurtz, Hon. R. Hunter, Assistant Secretary, Public and Indian 
  Housing, U.S. Department of Housing and Urban Development......     4
    Prepared statement...........................................     6
Lacounte, Darryl, Director, Bureau of Indian Affairs, U.S. 
  Department of the Interior.....................................    23
    Prepared statement...........................................    25
Mount, Hon. Nathaniel ``Nate'', Council Member, Ft. Belknap 
  Indian Community...............................................    15
    Prepared statement...........................................    17
Zuni, Hon. Max, Governor, Pueblo of Isleta.......................     8
    Prepared statement...........................................    10

                                Appendix

Brockie, Terry, Member, Gros Ventre Tribe of Fort Belknap Indian 
  Community (FBIC); CEO, Island Mountain Development Group 
  (IMDG), prepared statement.....................................    59
Center for Indian Country Development--National Native 
  Homeownership Coalition, prepared statement....................    63
Response to written questions submitted by Hon. Maria Cantwell 
  to:
    Patrice H. Kunesh............................................    67
    Hon. R. Hunter Kurtz.........................................    78
    Darryl Lacounte..............................................    85
    Hon. Andy Werk, Jr...........................................    73
    Hon. Max Zuni................................................    80
Response to written questions submitted by Hon. Cortez Masto to:
    Patrice H. Kunesh............................................    70
    Hon. R. Hunter Kurtz.........................................    76
    Darryl Lacounte..............................................    85
    Hon. Andy Werk, Jr...........................................    74
    Hon. Max Zuni................................................    80
Response to written questions submitted by Hon. Tom Udall to:
    Patrice H. Kunesh............................................    65
    Hon. R. Hunter Kurtz.........................................    75
    Darryl Lacounte..............................................    84
    Hon. Max Zuni................................................    80


  LENDING OPPORTUNITIES: OPENING THE DOOR TO HOMEOWNERSHIP IN INDIAN 
                                COUNTRY

                              ----------                              


                      WEDNESDAY, OCTOBER 16, 2019


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:41 p.m. in room 
628, Dirksen Senate Office Building, Hon. John Hoeven, 
Chairman of the Committee, presiding.

            OPENING STATEMENT OF HON. JOHN HOEVEN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    The Chairman. We will call the hearing to order.
    Thank you to all of the witnesses for being here.
    This is an oversight hearing entitled, Lending 
Opportunities: Opening the Door to Homeownership in Indian 
Country. Today, we will hear from Federal agencies and tribal 
leaders on how Federal financial tools, such as guaranteed and 
direct loans, are being used in tribal communities to promote 
homeownership.
    The dream of homeownership is a foundational principle in 
any society. Home ownership provides individuals and families 
with stability, safety, and the opportunity to build better 
communities. This principle holds true in tribal communities as 
well.
    Credit also plays an important role in providing housing 
opportunities. However, rural and tribal communities often have 
a difficult time accessing credit, and the ability to secure a 
mortgage on trust lands. Traditional models of financing do not 
always work in tribal communities. In Indian Country, title 
issues as well as difficulties in collateralizing tribal assets 
may make investors wary of financing tribal applicants.
    Local community banks and community development financial 
institutions can help fill those investment needs. For 
instance, in my home State of North Dakota, there are five 
community development financial institutions that have awarded 
nearly $6.1 million from the CDFI Fund at the Department of 
Treasury.
    Federal financial products, such as guaranteed and direct 
loans, may also serve as resources for communities where 
traditional mortgage origination practices may not be offered. 
Today, we will hear from the Department of Housing and Urban 
Development on how one of the most used guaranteed loan 
products, Section 184 loans, are working in Indian Country.
    As the Administration continues to prioritize economic 
growth, such as regulatory reform, it is important that these 
positive impacts are also felt in Indian Country. That is why 
on January 24th, 2019, I reintroduced the Indian Community 
Economic Enhancement Act of 2019 with Senator McSally. The ICE 
Act, Senate Bill 212, aims to address the disparity in economic 
opportunities tribal communities face by amending existing law 
to increase access to capital, attract investment to Indian 
communities, and lessen the cost of providing financial 
services to tribal members by reducing Federal bureaucracy.
    The Committee reported the bill favorably on January 29th. 
The Senate passed S. 212 on June 26th. I look forward to seeing 
this legislation taken up by the House, signed by the 
President, and enacted into law.
    Accessing credit to promote homeownership is, in many 
cases, the most important investment that a family will make. 
That is why we are holding this oversight hearing today. I look 
forward to hearing more about how Congress can make a 
difference in promoting credit access and homeownership in 
Indian Country.
    Before I turn to Vice Chairman Udall for his opening 
statement, I want to thank all of the witnesses who are here 
today. I want to especially welcome Hunter Kurtz to the 
Committee. I understand this is your first hearing in D.C. 
since being confirmed as the Assistant Secretary of Public and 
Indian Housing. Welcome.
    I also want to welcome Patrice Kunesh. I understand you 
will be moving on from the Federal Reserve Bank shortly. I want 
to thank you for your work in Indian Country as well.
    With that, I will now turn to what you have all been 
waiting for and that is to hear from Vice Chairman Udall.

                 STATEMENT OF HON. TOM UDALL, 
                  U.S. SENATOR FROM NEW MEXICO

    Senator Udall. Thank you, Chairman Hoeven.
    The topic of today's hearing, Lending and Homeownership in 
Indian Country, is a very important one.
    Thank you to all of our witnesses here today for traveling 
to Washington, D.C. for this hearing. Special thanks to 
Governor Zuni, from New Mexico's Isleta Pueblo, for being here 
today. Governor, it was great to see you last week in 
Albuquerque for the Committee's field hearing on uranium mining 
and at the groundbreaking for the visitor's center at Valle de 
Oro National Wildlife Refuge, where you honored us with the 
opening prayers in your native Tiwa language.
    Earlier this month, I visited your pueblo where I had the 
honor of presenting former Governor Torres and former 
Councilman Lujan with replacement medals for their service in 
Vietnam. I want to thank them again for their service to our 
Country.
    Turning to today's hearing, homeownership has long been the 
epitome of the American Dream. Yet, even with Federal programs 
like the Department of Housing and Urban Development's Section 
184 Indian Home Loan Guarantee Program, homeownership remains 
only a dream for too many in Indian Country.
    Structural barriers, including difficulty securing home 
loans on trust land, continue to prevent many Native Americans 
from owning their own homes. This Administration's ongoing 
failure to provide timely real estate services to tribal 
borrowers and lenders has only exacerbated the problem.
    In fact, the Center for Indian Country Development recently 
examined the challenges to mortgage lending in Indian Country 
and reported, ``promoting homeownership as a method of 
increasing Native American equity and assets may be less 
effective than for other populations.'' The dream of 
homeownership should be attainable to everyone, no matter where 
they live in the United States. It should not be more expensive 
for tribal members to live on rather than off reservation.
    That is why the innovative work being done by the Isleta 
Pueblo's Tiwa Lending Services, a Native Community Development 
Financial Institution, or CDFI, is so important. Tiwa is 
directly addressing existing barriers to tribal homeownership 
primarily by providing financial services such as mortgage 
loans, credit counseling, Native youth financial literacy 
classes to Pueblo residents and those in its surrounding 
communities, and with zero percent default rate on its home and 
consumer loan portfolios. Tiwa is doing a fantastic job.
    Native CDFIs like Tiwa are uniquely qualified to address 
the needs of tribal members and ensure that borrowers do not 
default. With CDFIs like Tiwa doing such great work in Indian 
Country, I am left scratching my head why the Administration 
has zeroed out the funding for Native CDFIs in its annual 
budget request to Congress for the last three consecutive 
fiscal cycles.
    Director LaCounte and Assistant Secretary Kurtz, I look 
forward to hearing from you both specifically on this important 
topic so that the Committee may better understand how the 
Administration is addressing mortgage lending and homeownership 
barriers in Indian Country.
    Thank you very much, Mr. Chairman.
    The Chairman. Thank you, Vice Chairman Udall.
    Senator Tester.

                 STATEMENT OF HON. JON TESTER, 
                   U.S. SENATOR FROM MONTANA

    Senator Tester. I do have an opening statement, Mr. 
Chairman.
    I want to start by thanking you and Senator Udall for 
holding this hearing entitled, Lending Opportunities: Opening 
the Door to Homeownership in Indian Country. Hopefully, when 
this hearing is done, we will have some ideas on how to do 
that.
    To the panel, your testimony is going to be critically 
important. I want to welcome you all, especially Nate Mount. 
Nate, it is good to have you here. Nate is one of those guys 
who left home for a while, went off and got his Juris 
Doctorate, and he came back to help the Ft. Belknap community. 
And his dad, Harlan, is here, who is a mainstay to the Ft. 
Belknap Tribe. We want to thank you both for being here and all 
the folks who are testifying.
    Look, we could all go on and on and on about what is going 
on in Indian Country for housing but the fact of the matter is 
if you want to have a healthy community, you have to have 
housing. I think if the folks who are here at the table and 
other folks that are in the audience, some of us have been up 
and seen the situation in Indian Country. Quite frankly, the 
housing is horrible. It is just like inner city poverty, quite 
frankly, on many of the large land-based tribes in this Country 
and in Montana. It is no exception.
    We have work to do, because it impacts everything. It 
impacts getting businesses into Indian Country, it impacts 
getting teachers into Indian Country and law enforcement into 
Indian Country. You can just go down the list. Everything has 
the foundational issue of housing. It needs some attention in 
Indian Country.
    I applaud the Chairman and the Ranking Member for having 
this hearing. I look forward to getting some good ideas to make 
getting access to capital easier and getting access to 
homeownership easier, because quite frankly, what we have done 
so far has not been near enough. It just has not worked to the 
extent it needs to work. So I look forward to the results of 
this hearing.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Tester.
    With that, we will turn to our witnesses. Our witnesses 
today are the Honorable Hunter Kurtz, Assistant Secretary for 
Public and Indian Housing, U.S. Department of Housing and Urban 
Development, here in Washington, D.C.; the Honorable Max Zuni, 
Governor, Isleta Pueblo, Isleta, New Mexico; the Honorable 
Nathaniel ``Nate'' Mount, Council Member, Ft. Belknap Indian 
Community, Harlem, Montana; Mr. Darryl LaCounte, Director, BIA, 
U.S. Department of the Interior; and Ms. Patrice Kunesh, 
Director, Center for Indian Country Development, and Assistant 
Vice President, Federal Reserve Bank of Minneapolis, Minnesota.
    Thanks to all of you for being here. We will begin with Mr. 
Kurtz.

         STATEMENT OF HON. R. HUNTER KURTZ, ASSISTANT 
          SECRETARY, PUBLIC AND INDIAN HOUSING, U.S. 
          DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Kurtz. Good afternoon. Thank you, Chairman Hoeven, Vice 
Chairman Udall and members of the Committee, for this 
opportunity to discuss lending and homeownership in Indian 
Country, and the important programs that we administer at HUD 
to further these important goals.
    I would also like to acknowledge and thank the Committee's 
staff, not only for coordinating this hearing, but for their 
ongoing engagement with HUD staff on issues that impact Native 
American communities.
    My professional career at HUD spans multiple 
Administrations. I have served both as a career civil servant 
and as an appointee. I am a houser at heart and a practitioner 
of HUD programs, and a true believer in the department's 
mission.
    Prior to coming back home to HUD in 2017, I was the Deputy 
Director of the Housing and Revitalization Department for the 
City of Detroit. This experience has helped me more deeply 
understand housing policy on the local level.
    My time in Detroit also reinforced one of the fundamental 
lessons I have learned throughout my career, a one size fits 
all for affordable housing does not work. The lesson certainly 
also applies to our Nation's American Indian, Alaska Native and 
Native Hawaiian communities.
    As you know, the Office of Public and Indian Housing is 
responsible for the management, operation, and oversight of 
HUD's Native American Housing Community Development Programs. 
These programs serve approximately 580 different, unique tribal 
communities. Our staff works every day to strengthen our tribal 
partnerships and develop programs that better meet the needs of 
all our Native communities.
    As the Assistant Secretary for Public and Indian Housing, I 
have had the opportunity to work with and visit tribal 
communities and learn firsthand about the housing issues and 
challenges tribes face. Most recently, I had the pleasure of 
visiting the Pueblo of Isleta in New Mexico. There I saw 
firsthand the great work their housing authority is doing under 
our programs. Specifically, I learned about how the Pueblo is 
leveraging critical Indian housing block grant dollars to 
construct new homes in culturally appropriate ways that meet 
unique needs of the community.
    Unfortunately, I did not get to meet the Governor but it is 
a pleasure to meet him today. Sir, your folks are doing some 
great work there.
    Opportunities like this have allowed me to hear directly 
from tribal leaders and see what we need to do to strengthen 
and improve HUD's programs. Far too many Native American 
communities struggle with severe overcrowding, lack of 
affordable housing and infrastructure challenges, all of which 
result in significant barriers to economic opportunity.
    Like so many others, Native Americans would like to own 
their own homes. However, various barriers make lending in 
Indian Country difficult. In addition to factors common to 
underserved markets in rural areas, the land is often held in 
trust by the Federal Government and can't be sold or readily 
mortgaged.
    To address this need, HUD Section 184, the Indian Home Loan 
guarantee Program, provides a 100 percent guarantee to lenders 
and makes lenders whole in the event of a borrower's default. 
The Section 184 program has been proven to be very popular and 
has grown exponentially from guaranteeing less than 100 loans 
in 1994 to over $7 billion in guarantees today.
    Although the volumes in loans guaranteed has increased 
significantly and the program has become more complex, the 
regulatory framework that governs the program has remained 
largely unchanged. Our hope is that updated regulations will 
limit fraud, waste, and abuse as well as help families in their 
homes in recognition of our government-to-government 
relationship. HUD has conducted many consultation sessions with 
tribes throughout the rulemaking process and intends to 
continue to do so as the rulemaking moves forward.
    In my experience, regulations that have been drafted in 
Washington need to be mindful of how they are implemented at 
the local level. What works for families in Detroit may not 
necessarily work for families in Indian Country.
    Thank you again for this opportunity to appear before you 
today. My office has submitted official written testimony for 
your consideration which provides greater detail on the status 
of our programs.
    I am proud of our dedicated staff who works tirelessly 
alongside our tribal partners to find solutions to these 
pressing needs. I am encouraged by the progress our programs 
continue to make.
    I look forward to addressing your questions and providing 
some additional information on the status of HUD's programs in 
Indian Country.
    Thank you, sir.
    [The prepared statement of Mr. Kurtz follows:]

Prepared Statement of Hon. R. Hunter Kurtz, Assistant Secretary, Public 
  and Indian Housing, U.S. Department of Housing and Urban Development
Introduction
    Thank you Chairman Hoeven, Vice Chairman Udall, and Members of the 
Committee for this opportunity to discuss lending and homeownership in 
Indian Country and the important programs that we administer at the 
U.S. Department of Housing and Urban Development (HUD) to further these 
important goals. I would also like to acknowledge and thank the 
Committee's staff, not only for coordinating this hearing, but for 
their ongoing engagement with HUD staff on issues that impact Native 
American communities across our Nation.
    As the Assistant Secretary for Public and Indian Housing, I have 
had the opportunity to work with and visit tribal communities and learn 
firsthand about the housing issues and challenges that Tribes face. It 
has also given me the opportunity to hear directly from tribal leaders 
on what we need to do to strengthen and improve HUD's programs. Far too 
many Native American communities struggle with severely overcrowded 
housing, lack of affordable housing, and infrastructure challenges--all 
of which result in significant barriers to economic opportunity. HUD 
staff work tirelessly alongside our tribal partners to find solutions 
to these difficult problems.
Section 184 Indian Home Loan Guarantee
    Like so many others, many Native Americans would like to own their 
own homes. However, various barriers make lending in Indian Country 
difficult. In addition to factors common to underserved markets and 
rural areas, the land may be held in trust by the Federal Government, 
and cannot be sold or readily mortgaged.
    One of the primary tools available to address these barriers is 
HUD's Section 184 Indian Home Loan Guarantee (Section 184) program. The 
program was established in 1992 to encourage private lenders to make 
home loans to Native Americans in eligible Indian areas. HUD provides a 
100-percent guarantee to lenders and makes lenders whole in the event 
of a borrowers' default. The guarantee encourages lenders to serve a 
population that has traditionally been viewed as high risk and areas, 
such as Indian reservations, that have had difficulty attracting 
private capital because of their remoteness and the status of the land. 
Ultimately, the Section 184 program helps Tribes promote the 
development of sustainable reservation communities by making 
homeownership a realistic option for tribal members.
Eligibility
    The Section 184 program provides access to market-rate, private 
mortgage capital, and is not subject to income restrictions. The 
program does not have minimum requirements for credit scores and allows 
for alternative forms of credit and non-traditional income to meet the 
unique needs of tribal communities. The program gives tribal members 
from across the income spectrum the choice of living in their Native 
community by providing access to mortgage capital. In addition to 
individual tribal members, Tribes and tribally designated housing 
entities (TDHEs) are eligible borrowers. This benefit of the program 
makes it possible for Tribes and TDHEs to address housing shortages by 
developing and financing rental housing or by promoting homeownership 
opportunities for tribal members through lease purchase programs.
    According to HUD's 2017 Native American housing needs study, since 
its inception, the program has served as a major source of mortgage 
financing for Native American families, both on and off reservations. 
The program has been proven to be very popular and has grown 
exponentially from guaranteeing less than 100 loans in 1994 to, at its 
peak, guaranteeing over 4,000 loans--worth over $700 million--in 2017.
Regulations and Legislative Proposals
    Although the volume of loans guaranteed has increased 
significantly, the regulatory framework that governs the program has 
remained largely unchanged. To address this issue, HUD has begun 
working to update the Section 184 regulations. In February 2018, HUD 
started engaging in tribal consultation to revise the program's 
regulations--even before any regulations were drafted. Since then, HUD 
has held 15 in-person and three teleconference consultation sessions 
with Indian tribes. A draft proposed rule has been developed and placed 
into clearance. Once the rulemaking process is complete, the updated 
regulations will improve and modernize the program, help borrowers stay 
in their homes, provide clarity to participating lenders, and ensure 
the program remains sustainable for the future.
    In addition to this rulemaking, in recent years, HUD has also 
proposed various legislative fixes to the Section 184 program 
authorizing statute--the Housing and Community Development Act of 1992. 
For instance, we've proposed amending the Act to authorize HUD to 
require lenders that participate in the direct guarantee process to 
indemnify HUD for losses in cases involving fraud and 
misrepresentation. We've also proposed changes that would allow HUD to 
periodically review the rates of defaults and claims of these direct 
guarantee lenders to ensure that they do not pose an unacceptable risk 
to the program. All of these proposals were put forward to ensure that 
the program remains strong, sustainable, and continues to meet the 
needs of Native American borrowers well into the future.
Federal Partners
    Mortgage lending on tribal trust land can be a time-consuming 
process that reduces the appeal of lending on tribal trust land, even 
with the Federal guarantee. This is in part because the process can 
involve obtaining leases, securing final certified title status reports 
from the Bureau of Indian Affairs (BIA), completing National 
Environmental Policy Act (NEPA) reviews, securing appraisals, and other 
required transactions.
    To help address these barriers, HUD has been working with our 
Federal partners to reduce the administrative barriers. We routinely 
collaborate with the Department of the Interior to share information, 
improve communication, and break down silos.
    For example, HUD partnered with the BIA to host a training session 
for lenders and BIA staff on mortgaging tribal trust land. The session 
was oversubscribed and provided an opportunity for lenders, HUD, and 
BIA staff to better understand one another's processes. Additionally, 
in July 2019, the Department of the Interior published their Indian 
Affairs Mortgage Handbook, which outlines the mortgaging lending 
process when dealing with properties on trust land. The Handbook 
provides important guidance to BIA staff for processing leasehold and 
trust land mortgages on trust or restricted land; and specifically, how 
to review and analyze a mortgage loan request from a lender using a 
minimum, streamlined, and standardized process.
    Following our training session and publication of the Indian 
Affairs Mortgage Handbook, BIA processing times improved. For example, 
BIA offices in several areas of the country improved their performance 
in the issuance of final certified title status reports. Progress has 
been made, and HUD and BIA will continue efforts to improve and 
streamline the loan process on tribal lands.
Title VI
    HUD's Title VI Loan Guarantee program is another critical resource 
for tribal communities. This loan guarantee program allows a Tribe to 
pledge a share of its annual Indian Housing Block Grant (IHBG) 
allocation as collateral to attract private capital and other funding 
resources to carry out affordable housing and community development 
projects. By leveraging multiple sources of funding, Tribes can 
significantly increase their purchasing power and develop large-scale 
housing projects.
    Some Tribes have used both of HUD's tribal loan programs to help 
finance housing developments. For example, a Tribe can take out a Title 
VI loan to develop affordable housing and on-site infrastructure. Then, 
the Tribe can use the revenue generated from selling the home to a 
tribal member--using a Section 184 loan--to repay the Title VI loan. 
This allows the Tribe to start the process over again and continue to 
increase its housing stock.
    For example, in New Mexico, the San Felipe Pueblo Housing Authority 
successfully used financing under the Title VI and the Section 184 
programs to leverage many other sources of private and public funding 
to build a 150-unit subdivision for tribal members. Not only did the 
housing authority create much needed new housing, but in the process, 
it also exponentially increased the size of its force account crew and 
is now one of the largest employers on the reservation. Similarly, in 
Alaska, the Cook Inlet Housing Authority was able to use this framework 
to add 79 new housing units to its portfolio over the past six years--
including 13 units for low- to moderate-income residents.
Indian Housing Block Grant
    Of course, the Indian Housing Block Grant program is also a 
critical resource for low-income Native American families looking to 
become homeowners.
    IHBG is the single largest source of housing assistance to Native 
Americans and can help Tribes support homeownership in creative ways. 
For example, Tribes can use their annual block grants to provide 
acquisition and down payment assistance to first-time homebuyers. Funds 
can also be used to fund housing related services like housing 
counseling, homebuyer education, and financial literacy. Additionally, 
these funds can be leveraged with other funding sources, like Low-
Income Housing Tax Credits, to develop rental housing for low-income 
Native American families and alleviate overcrowding.
    Earlier this month, I had the pleasure of visiting the Pueblo of 
Isleta to see firsthand all the great work the Isleta Pueblo Housing 
Authority is doing under our programs. They are using these critical 
IHBG dollars to construct new homes in culturally appropriate ways that 
meet the unique needs of their community. For instance, they have built 
a customized 5-bedroom home that can appropriately house extended 
family members, are renovating homes for elders in the historic central 
village using traditional adobe construction, and have even used 
locally-sourced lava rock bricks to construct modern homes in their 
efforts to address the shortage of housing.
    As you can see, the flexibility of the IHBG program has proven to 
be a significant tool in addressing the shortage of housing, helped 
alleviate overcrowding, and furthered homeownership and self-
sufficiency in Indian Country.
Best Practices and Technical Assistance
    Finally, HUD recognizes the importance of assisting Tribes and 
TDHEs with increasing their capacity and technical expertise. This past 
year, HUD hosted national best practice webinars highlighting tribal 
projects that have leveraged IHBG funds with both Section 184 and Title 
VI loans. The best practices include case studies that explore housing 
development projects and financing methods in more detail. These well-
attended webinars generated additional interest in creative ways to 
develop housing in Indian Country and fostered mentoring relationships 
between Tribes and TDHEs.
    HUD is also committed to exploring ways to use our technical 
assistance funding to help Tribes and TDHEs enhance their development 
efforts and to better leverage the assistance they receive through the 
dissemination of successful tribal housing strategies.
Conclusion
    In conclusion, HUD programs, such as Section 184, Title VI, and 
IHBG, are successful examples of Federal programs that work to bring 
the dream of homeownership to Native American communities. We are 
excited about all the amazing work that has been done so far by Tribes 
under these programs and look forward to continuing to find ways to 
make homeownership and access to capital a reality for Tribes and 
tribal members across the country.
    Thank you again for this opportunity to appear before you today.

    The Chairman. Thank you.
    Governor Zuni.

     STATEMENT OF HON. MAX ZUNI, GOVERNOR, PUEBLO OF ISLETA

    Mr. Zuni. [Greeting in Native language.]
    Thank you, Chairman Hoeven, Committee members and 
especially, Senator Tom Udall. Thank you for having us today. I 
really appreciate it.
    I am Max Zuni, the Governor from the Pueblo of Isleta. It 
is an honor and privilege to be here today to voice our 
opinions, our issues, and our requests. Thank you so much for 
having this testimony today.
    I am the Governor from the Pueblo of Isleta. I have been 
Lieutenant Governor for eight years. This is my first term. It 
will be nine years that I have been in office. My whole goal in 
this kind of administration is, of course, for our younger 
people. We have close to 5,000 tribal members. We are located 
in the biggest city in New Mexico, which is Albuquerque. We are 
ten miles south, right in the Rio Grande Valley.
    We have over 300,000 acres of land that we have to 
maintain. Our community is very large. We have several 
communities within the Pueblo.
    Our housing, as the Honorable Mr. Kurtz said, is working 
very hard building homes for our community members through the 
HUD program. We formed the CDFI about six years ago and we are 
just learning how to run that program. It is very effective. We 
have over almost 80 members in that group now with beautiful 
homes. They are very proud of what they are building.
    We, of course, have a lot of young tribal members. We 
encourage them to get educated, to go to college, to get a 
career, and to get a good job. Our problem is that when they do 
get that and they get low income, they can't qualify for some 
of the home projects. They can't qualify for some of the 
scholarships. They can't qualify for some of the school systems 
and programs that we have. It is a deterrent for our younger 
people to be told that you make a high income and you can't 
qualify for things. Luckily, with the CDFI program we have, 
they can come and get help to have a new home.
    We encourage a lot of the tribal members in other pueblos 
and other tribes to look into these programs. It works. It 
helps our community. They do have their own design of what 
buildings they want. They find their own contractors.
    Of course, the problem we have is the stipulations that are 
out there. We are considered in a flood plain, so now they 
can't be supported with some of these projects. It would be 
nice for them to talk to us to make sure we are not in those 
kinds of situations.
    The process that takes two years to get this leasing 
agreement through BIA, we took over that project now, but it is 
costly for the tribes. They have to hire people, specialized 
people. Right now, we have to get a biologist, we have to get a 
computer service, we have to get the software, so the tribes 
have to know, once we take over that responsibility, what the 
cost is going to be to us.
    The HEARTH Act, which is really great, thank you for having 
it, but of course, that is because of the flood plain issues 
and the funding source. As they stated when we first requested 
it, we got close to a little over $1 million, which really 
helped us in the formulation of the CDFI. The tribe recently 
donated a little over $3 million to help that program.
    But we have a waiting list of 130 people. We now have 
plans, and I know you have seen it, we have plans to build 
another 132 homes. It is not just for tribal members. You have 
to understand. The majority of our people at home are married 
to non-tribal members, they have young kids that are living 
there. So we support a lot of our communities within the 
Bernalillo County and Valencia County, that one of the largest 
counties in the State of New Mexico. So we help a lot of 
community members.
    We do have a casino and resort that provides funding that 
supports programs within the tribe. They do contribute a 
little. Right now I am working on a revitalization program that 
the tribe has offered to do homes within the village proper, 
but of course, I can't get funding for it, Federal funding. I 
am hoping that we can get that.
    The problem, again, is some of our tribal members, when 
they do have a home built, they can't qualify for a second home 
within the village proper. Traditionally, we have to have some 
of our tribal members living within the village proper to 
revitalize our pueblo. We hope one of these days we can really 
generate funding to revitalize our pueblos to come back from 
having old homes and renovate them so our community members can 
live within the pueblo property.
    The programs are great. I really enjoy all the programs. I 
enjoy BIA and the assistance they give me. I talk to them 
constantly. But there are certain things within these policies 
that I wish we could really change to help us to expedite some 
of these lease agreements, to expedite some of these contracts 
that we have. It takes almost two years to get some of these 
things to go through BIA. Luckily with our CDFI, within two or 
three months, they are done. Our community members are happy 
that they can get a home built within a year.
    I am proud because my youngest daughter just went through 
that, and she has a beautiful home now. She is a really good 
example of how that CDFI works, the loan program. She went to 
the classes; she was taught how to budget her money. She had to 
get certified and now she is very consistent in her payments 
and everything. So they are good classes.
    That, and we have classes for the youth of the elementary 
school, high school and the colleges. They go to a symposium 
for two days learning about credit. That is how Tiwa Lending 
runs that program.
    I wish a lot of the tribes and communities, not only for 
the Native Americans but for all the high school kids and the 
college kids, to go to those kinds of symposiums to learn about 
how to run their credit and how to manage their funds, and when 
they decide to buy a home, how to manage it. Our kids are so 
excited after they finish that. They learn how to budget their 
money and they don't get in debt.
    So I appreciate it. I thank you so much for having this 
today. I hope we can work things out. I applaud all of you for 
being here today. Thank you, Senators, for giving us this time 
to express our opinions, and our concerns, and our issues. I 
hope we can remedy them.
    Each and every one of you are always, always invited to the 
Pueblo of Isleta, to tour it. We are trying as hard as we can 
to have a good community. Thank you so much.
    [The prepared statement of Mr. Zuni follows:]

    Prepared Statement of Hon. Max Zuni, Governor, Pueblo of Isleta
    Dear Honorable Chairman Hoeven and Members of the Committee:
Introduction
    Ma Gu Warn. Greetings. My name is Max Zuni. I am the Governor of 
the Pueblo of Isleta. The Pueblo of Isleta is one of nineteen (19) 
Pueblos in New Mexico and one of twenty two (22) tribes in New Mexico. 
The Tiwa language, the language spoken by the Pueblos of Isleta, 
Sandia, Taos, and Picuris, is still spoken in the Pueblo and we 
continue to live according to the centuries old traditions of our 
ancestors. The livelihood of many Isleta residents continues to be 
farming, ranching, and sale of arts and crafts and traditional foods.
    Isleta Pueblo is surrounded by Albuquerque to the north and the 
small towns of Bosque Farms and Los Lunas to the south. The Isleta 
Indian Reservation has a land base of 330 square miles within two 
counties, Valencia and Bernalillo. Isleta Reservation lands consist 
primarily of tribal trust lands. Isleta residents live on both the 
western and eastern banks of the Rio Grande River. The village, located 
on the western bank of the Rio Grande River, remains the cultural and 
spiritual center of the Isleta people and continues to be inhabited by 
a large portion of the Pueblo's members. A large portion of Isleta's 
residential areas are in flood zones as mapped by the Federal Emergency 
Management Agency (FEMA). As discussed below, this has created a major 
challenge in housing and community development.
Demographics of Isleta Pueblo
    According to the 2017 U.S. Census data 3,980 people live in Isleta. 
\1\ Isleta Census data shows our population as 4,200. Using U.S. Census 
data, 3,738 of Isleta residents (or 93 percent) are American Indian or 
Alaska Native (AlAN). Those that aren't AlAN are family members. There 
are 1,083 households in lsleta.1 According to U.S. Department of 
Housing and Urban Development (HUD) 2019 data, there are 579 low income 
households (more than half of all households) in Isleta Pueblo that 
need housing. This means that more than half of all households live in 
overcrowded conditions.
---------------------------------------------------------------------------
    \1\ Home Town Locator of the Isleta Pueblo, 2019 Demographic Data.
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    A large factor of overcrowded conditions is the lack of sufficient 
income for housing. In fact, AIANs living in Isleta Pueblo experience 
higher unemployment rates, lower income, higher poverty rates, and 
other disparities compared to the overall U.S. and compared to non-
Native residents of New Mexico. Using HUD data, \2\ 634 or 51 percent 
of Isleta's households are low income, with 21 percent falling below 30 
percent of the median income. A study conducted in 2012 of New Mexico 
Native American children report that 28 percent of Isleta children live 
below the poverty level. \3\ In the Pueblo, the individual poverty rate 
is 25.3 percent, compared to the individual poverty rate of 19.8 
percent in New Mexico and the 12.3 percent individual poverty rate of 
the U.S. in total. \4\
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    \2\ HUD FY 2019 IHBG Estimate Allocation.
    \3\ Native American KIDS COUNT 2012 Special Report, Snapshots from 
the American Community Survey and other Data Sources.
    \4\ 2017 ACS data.
---------------------------------------------------------------------------
    Isleta Pueblo families generate less income than other families in 
New Mexico and the U.S. According to the 2017 American Community Survey 
(ACS), the median household income in Isleta is $32,131, compared to 
the state median household income of $45,674 and the U.S. median 
household income of $55,322. Forty eight percent (48%) offamilies in 
Isleta have a single income earner, while 20 percent of families have 
no wage earner. \5\ Residents of Isleta Pueblo experience higher 
unemployment compared to Native peoples off-reservation, who face 
disproportionate unemployment themselves. Isleta has an unemployment 
rate of 8.3 percent, more than the 6.7 percent unemployment rate for 
New Mexico and the 6.6 percent unemployment rate for the United States.
---------------------------------------------------------------------------
    \5\ 2017 ACS data.
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    For the past 16 years, the Pueblo of Isleta has provided annual per 
capita payments to tribal members of anywhere between $1,000 and 
$2,000. These funds are for the most part immediately spent on 
disposable items. Per capita payments to minors age 18 and under are 
disbursed to parents or guardians. Before the creation of Tiwa, there 
was no financial education available to residents, including the youth 
of the Pueblo, who could potentially have a savings of $36,000 in 
principal by the time they are 18 years of age. While there is no data 
available, the most likely scenario is that most children's funds are 
used for disposable goods and little investment of children's funds.
    While there are employment opportunities in the Pueblo, young 
families with small children are unable to join the workforce for lack 
of sufficient child care. Isleta's largest employers are the Isleta 
Pueblo government and the Casino and Resort which manages the casino 
and resort, the Lakes and RV Park, two gas stations, the Golf Course 
and the Family Fun Center. Even with these employment opportunities, 
many of these jobs pay at starting or close to starting wages. 
Consequently, many families live paycheck to paycheck, spending a large 
part of their income on rent, propane, vehicle payments, vehicle 
maintenance, gasoline, groceries and disposable goods.
The Creation of Tiwa Lending Services, Inc. (Tiwa)
    To address the above and to take the driver's seat to spur economic 
development, Tiwa was created by the joint efforts of the Pueblo of 
Isleta, the Isleta Pueblo Housing Authority (IPHA) and the Community 
Development Financial Institutions (CDFI) Fund of the U.S. Department 
of the Treasury. Tiwa's mission statement has always been to encourage 
community development and improve the social and economic conditions of 
Isleta Pueblo residents and Native Americans in surrounding 
communities.
    The effort began in 2009 when the Pueblo and IPHA sent 
representative to a Native CDFI training funded by the CDFI Fund. It 
was through this training, technical assistance provided by Oweesta, 
another Native CDFI, and technical assistance funds from the CDFI Fund, 
that Tiwa was created.
    Tiwa was established as a not-for-profit Native CDFI on January 6, 
2011 and received its 501 (c)(3) status on January 6, 2011. It was 
certified as a Native CDFI on September 17, 2013. Tiwa operates from a 
small 2- room tribal office located in the same building as the 
Governor's office. Operating under a 5-member Board of Directors and a 
staff of two (Sheila Herrera, Executive Director, and Miranda Lente, 
Loan Assistant/Homeownership Counselor), Tiwa has in its 8 years of 
operation accrued a mortgage portfolio of 78 loans totaling $7.4 
million. Additionally, Tiwa has originated $1,209,864.00 in consumer 
loans, including credit repair loans, personal loans, education loans, 
business loans, and debt consolidation loans, and has provided credit 
counseling to 885 Isleta tribal members and Native American youth. Tiwa 
works closely with its borrowers.
    Tiwa's home loan portfolio and consumer loans have a less than 1 
percent delinquent status. Additionally, Tiwa provides Financial 
Literacy and Education classes. To date, 2661sleta residents have 
received financial literacy certificates. Tiwa also sponsors youth 
financial education conferences and is a Voluntary Income Tax 
Assistance (VITA) site.
Lending and Financial Services in Isleta Pueblo
    Lack of credit and lack of financial sophistication present 
barriers to obtaining fair financing to meet the housing and economic 
needs of the Isleta community. Other than Tiwa, there are no banking or 
lending services in Isleta. Prior to Tiwa, most borrowing took place 
among family members and payday lenders located outside the 
reservation. The presence of Tiwa and the ability of residents to take 
out consumer loans have resulted in a decreased use of residents using 
payday lenders located in the surrounding communities. An estimated 10 
percent of applicants for home loans reveal that they use pay day 
lenders to repay other debts. Banks in the surrounding communities do 
not provide financial access to those with lower income and impaired 
credit. Nor do they provide financial education. The majority of Isleta 
Pueblo residents are first and second generation wage earners. 
Purchasing is largely done with cash. The primary use of financial 
services by Isleta residents and other Native Americans in the 
surrounding communities are for check cashing services, car loans, and 
farm equipment loans. Applicants for home loans state that they are 
turned down by other financial institutions due to lack of a down 
payment and/or poor credit history. These factors contribute to the 
reasons why Isleta residents are not able to obtain services from 
financial institutions.
Unique Benefits Provided by Tiwa:
    Tiwa's products and services meet a double bottom line by providing 
social returns to its borrowers and financial returns to TIWA by having 
the following unique features:

         All of Tiwa's lending products have flexible underwriting 
        criteria. Applicants are not required to have credit history. 
        Home loans, including loans for rehabilitation, have a maximum 
        loan to value ratio of 100 percent. Mortgage loans do not 
        require a down payment. Home loans have low interest rates 
        equal to the 30 year Treasury bond rate (2.12 percent as of 
        October 3, 2019) plus 1.375, lower than rates offered by other 
        financial institutions. Closing costs and origination fees can 
        be financed in the loan amount. Although financial institutions 
        in Albuquerque provide home loans to some tribal members, the 
        loans are limited to borrowers who have good credit and down 
        payment funds. These loans have higher interest rates than 
        Tiwa's loans.

         2) Tiwa provides homeownership and financial education and 
        small business workshops, changing the lives of future 
        generations and the economic picture in Isleta. Here is a story 
        of one such family:

         Carrie (not her real name), a member of the Isleta Pueblo, 
        improved her credit score by 87 points in less than two years 
        with the help of Tiwa. As a teen parent, Carrie didn't realize 
        the impact that her credit score could have on her life and her 
        ability to access credit. Now, as a mother of five children and 
        the only working member of her household, she sought a loan 
        from Tiwa for extra help during the holidays and was provided 
        with the credit counseling and education that would allow her 
        to create a positive payment history and rebuild her credit. 
        Not only did Carrie learn how to take action to positively 
        impact her score, she has started educating her children on the 
        importance of credit scores. Without the loan and counseling 
        from Tiwa, Carrie says she wouldn't be where she is today.

         3) Tiwa requires all borrowers to either take a financial 
        education class that Tiwa teaches or one on one counselling 
        with Tiwa.

         4) Tiwa collaborates with the Isleta Pueblo Housing Authority 
        (IPHA), the Pueblos's Tribally Designated Housing Entity, and 
        Pueblo of Isleta departments, such as the Social Services 
        Department, the Library, the Elderly Center, and the 
        Scholarship Office, to market its financial products and 
        development services. Additionally, Tiwa publishes its products 
        and services in the Isleta Pueblo newsletter and posts its 
        publications at public places in Isleta--the post office, the 
        Recreation Center, the Elderly Center, the IPHA Office, and the 
        Governor's Office. Tiwa has a website, www.tiwalending.org, 
        where it posts its products and upcoming homeownership 
        financial education workshops. To reach Native Americans in the 
        surrounding communities, it posts announcements at post offices 
        and court houses.

         5) Tiwa knows its borrowers and works with them closely to 
        ensure they remain successful borrowers. For example, Tiwa 
        contacts delinquent borrowers by telephone to find out their 
        situation and work with them to resolve the delinquency while 
        the delinquency is still manageable. In a pre-foreclosure 
        situation, Tiwa worked closely with the family and the Pueblo 
        of Isleta to identify a family member who could assume the 
        loan. Most recently, Tiwa is working with the family of a 
        deceased borrower to identify a qualified family member who can 
        assume the loan.

Tribal Support of Tiwa
    Isleta Pueblo is a gaming tribe. I tell you this so you will know 
how gaming has finally brought us some of the community and economic 
development benefits already enjoyed by the rest of America. Our 
leaders have always known that a balancing ofthe old and the new is the 
best way to live in dual worlds. We want our children to continue to 
talk the Tiwa language and practice the Pueblo traditions while 
obtaining the education necessary to have what the rest of America has, 
a safe home and a secure future. It is with this mindset that the 
Pueblo expends its gaming revenues on economic and community 
development and has a land policy that allows for the free transfer of 
tribal trust lands among tribal members and leasehold mortgaging for 
housing development.
    The Pueblo provides capital to Tiwa. By providing capital to Tiwa 
to assist families become selfsufficient, the Pueblo is able to support 
housing, community, and economic development on the Pueblo.
    By having a land policy that allows for the free transfer of tribal 
trust lands among tribal members, and mortgaging of land interests, and 
removing cumbersome processes for leasing and mortgaging inherent in 
traditional lending, the Pueblo is able to ensure that families have 
access to financial and homeownership opportunities. As you might know, 
tribal trust lands are unalienable. They can only be transferred among 
tribal members. We feel we are unique as Pueblos in our policy of 
making tribal trust lands freely alienable among tribal members. This 
policy has allowed tribal members to use their land assignments and 
residential leases as collateral not only for purposes of building a 
home but to allow tribal members to obtain tribal land by purchase and 
to borrow money for business purposes and to build their credit. In our 
Pueblo, tribal members are able to not only mortgage their residential 
lease, but also to use their land assignments as collateral for a loan.
Funding Available to Tiwa
    Tiwa receives financial support from the U.S. Department of 
Treasury Native American CDFI Assistance Program (NACA Program), an 
annual competitive funding process; the Pueblo of Isleta; and loans 
from other non-profits. It recently borrowed money from Oweesta, 
another Native CDFI. Capital also comes from the revenue from the loan 
portfolios. Like other Native CDFis, Tiwa's primary challenge is lack 
of funding to meet the lending needs of its community, and consistently 
seeks funds. For example, Tiwa has a waiting list of 29 tribal members 
that desire to obtain a home loan. The NACA Funds are available on a 
competitive basis, and while the application process is cumbersome and 
requires grant writing experience, this funding is vital to Tiwa's 
economic development initiatives.
    However, the NACA Funds are insufficient for all Native CDFis 
competing for the funds. As of 2018, there were 73 certified Native 
CDFis, with many other working towards becoming certified. Thirty-Eight 
Native CDFis, including Tiwa, benefited from the $15.3 million in 
grants in FY 2018. While Tiwa applied for funding in the 2019 fund ing 
round, funding awards have not yet been posted. In 2019, Wells Fargo 
provided $100,000 to Tiwa for down payment assistance. Unfortunately, 
Tiwa was unable to provide this funding to potential borrowers for lack 
of loan funds to lend and was only able to utilize 20 percent of the 
funds before the Wells Fargo timeline of one year.
    Increased funding for the NACA CDFI Fund, who make such a big 
economic impact in tribal communities, is vital to economic growth on 
Indian reservations.
Other Major Challenges
    In addition to lack of sufficient funding to lend, Tiwa faces two 
other major challenges that it has been working to address, with the 
assistance of the Pueblo.
1. The inability to use federal funds on flood plains.
    The inability to use federal funds as down payment assistance on 
flood plains means that the Isleta Pueblo Housing Authority can't 
provide down payment assistance to TIWA lenders using federal funds. 
Both HUD Indian Housing Block Grant (IHBG) and Indian Community 
Development Block Grant (ICDBG) funds may be used as down payment 
assistance. Like many other Pueblos, the River Grande river runs 
through tribal lands. Sometime around 2010, without consent of the 
Pueblo, FEMA aerially flood mapped Pueblo lands and published a large 
part of Isleta's residential areas, including areas with HUD-assisted 
homes, as being in special flood hazard areas (SFHA), also referred to 
as floodplains. The Federal Flood Disaster Protection Act of 1973 \6\ 
(the ``Act'') prohibits the use of federal funds, including IHBG and 
ICDBG, on floodplains unless a community or tribe participates in the 
National Flood Insurance Program (NFIP) and purchases flood insurance.
---------------------------------------------------------------------------
    \6\ 42 U.S.C. 4106(a).
---------------------------------------------------------------------------
    While other tribes have had their lands flood mapped, it has been 
with their written consent, and they have been given the option of 
publishing the flood maps. In response to why Isleta was not given this 
option, the FEMA response has been that after the Isleta experience, 
tribes were given the publication option.
    Flood insurance is expensive. The inability of low income borrowers 
to use federal funds as down payment assistance for the rehabilitation 
of homes on floodplains, many which are in substandard and dilapidated 
condition, makes it prohibitive to qualify for a loan. Further, the 
flood mapping in Isleta was done without detailed studies to determine 
Base Flood Elevations (BFEs), which are necessary to obtain certified 
elevations for insurance. Obtaining flood insurance will require a 
borrower to engage a surveyor to conduct detailed studies to determine 
BFEs.
    Even if a tribe mitigates flood risks, the Act prohibits the use of 
federal funds on homes on floodplains unless a tribe joins the NFIP. A 
community (including a tribe) that participates in the NFIP is required 
to adopt flood standards on floodplains as established by the NFIP and 
enforce these standards. Adopting an approved NFIP flood ordinance is a 
burdensome and costly process that requires a tribe to hire a certified 
flood plain manager, develop and enforce flood standards, require 
certified elevations when building or rehabilitating on floodplains, 
and maintain tribal records on all new home construction and 
rehabilitation. Few tribes participate in the NFIP likely due to the 
administrative, technical, and financial burdens imposed by the NFIP.
    States are granted an exemption from the Act's requirement that a 
community join the NFIP before using federal funds on floodplains. \7\ 
The state exemption applies to federal affordable housing funds 
provided to states, including HOME funds and CDBG funds, and HUD 
regulations at 24 CFR 58.6(a)(3)--the HUD environmental regulations, 
and 24 CFR Part 55.1 (b)(1)--the HUD floodplain management regulations, 
implement this federal exemption. The Native American Housing 
Assistance and Self-Determination Act of 1996 (NAHASDA) Reauthorization 
Bill contains a provision that would give tribes the same exemption 
already enjoyed by states, and allow tribes to use IHBG and other 
federal affordable housing funds on floodplains utilizing a tribe's 
mitigation plan, without requiring a tribe to join the NFIP. This 
provision will allow tribes and their Tribally Designated Housing 
Entities to provide down payment assistance funds to low income 
borrowers for home construction or rehabilitation. We ask for your 
support of the NAHASDA Reauthorization bill. The Pueblo of Isleta is 
working on developing a flood assessment and flood mitigation plan.
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    \7\ See 42 U.S.C. 4003(a)(3).
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2. Federal land laws and policies applicable to tribal trust lands.
    Federal land laws, found at 25 USC 81 and 25 CFR 162, restrict the 
ability of tribes to encumber land without approval of the Bureau of 
Indian Affairs (BIAL and is the biggest challenge to lending on tribal 
trust lands. Mortgaging land obviously encumbers land. As you may have 
heard from other tribes, the BIA lease and mortgage approval and 
recording process is lengthy and cumbersome. Prior to approving a 
lease, BIA first conducts a title status report (TSR). Then, it reviews 
and approves a lease already approved by the tribe. Then, before 
approving a mortgage, if too much time has occurred since approving the 
lease, it conducts another TSR. Then it reviews and approves the 
mortgage. Both the lease and mortgage then get routed to the Office of 
Land, Titles and Records (OLTR) for recording, most of the time in two 
separate processes. Each step in the process can take months, and the 
entire process can take more than a year. For example, Tiwa has waited 
12 months for a TSR, 12 months for BIA approval of a lease or mortgage, 
and 24 plus months before receiving the recorded lease and mortgage 
from BIA.
    The time it takes to close a loan on Indian trust lands deters many 
lenders. To shorten the timelines, Isleta, along with Acoma and Zuni, 
worked closely with Senator Heinrich to enact HEARTH in 2012. HEARTH, 
which means Helping Expedite and Advance Responsible Homeownership, is 
the federal law that allows tribes to enact leasing laws and approve 
specific types of land leases, including residential leases, without 
further approval by BIA. While HEARTH is an expensive law for tribes to 
implement due to a tribe taking on BIA's role of reviewing and 
enforcing leases and mortgages, preparing surveys, and conducting 
environmental reviews, and the reason why it took Isleta Pueblo so long 
to enact, it improves the timeline for closing on loans, making lending 
more attractive on tribal trust lands.
    BIA approved Isleta's leasing law in April 2019. Isleta is in the 
process of planning the implementation of this law, which will require 
funding to hire a leasing officer and contract with surveyors and 
environmental review firms to conduct environmental reviews. Once 
implemented, Tiwa anticipates that the time for closing on leasehold 
mortgages will be cut by more than half. The ability to bypass the 
lengthy BIA review and approval process will allow Tiwa and other 
lenders to close on mortgages within weeks versus months.
    However, HEARTH doesn't address the TSR process which must still be 
conducted by BIA. Neither the Pueblo nor Tiwa have yet tackled this 
difficult issue. What we have learned from talking with other tribes is 
that while some tribes have taken on recording as a function, it is an 
expensive endeavor and one which requires an expensive database 
compatible with the BIA titling system. While we have discussed the 
ability ofthe BIA titling system to become privatized, we realize that 
this is a discussion that must involve BIA. We ask for your support in 
helping tribes find a solution to this issue.
    Thank you for your time in listening to this testimony.
        *The photos attached with this prepared statement have been 
        retained in the Committee files.*

    The Chairman. Thank you.
    Councilman Mount.

STATEMENT OF HON. NATHANIEL ``NATE'' MOUNT, COUNCIL MEMBER, FT. 
                    BELKNAP INDIAN COMMUNITY

    Mr. Mount. Good afternoon, Mr. Chairman and members of the 
Committee.
    [Greeting in Native language.]
    My name is Nathaniel Mount. I am the River Assiniboine 
District representative on the Ft. Belknap Indian Community 
Council. I am very proud and pleased to be here today speaking 
on behalf of my people, the Aaniiih and Nakoda.
    My father, Harlan Mount, is here with me, as Senator Tester 
said. He is our current housing director and is one of our past 
tribal chairmen. I am very pleased to be with him today.
    Historically, our reservation has suffered from 70 to 85 
percent unemployment, with a median income of $12,000 or less. 
Tribal members typically live with up to three generations in a 
single home. It is not uncommon to see 13 to 18 people in a 
single unit.
    In fact, our last HUD-built homes were constructed over 25 
years ago, in June of 1994. Our tribal housing list has more 
than 150 families waiting. The waiting time is about three and 
a half years average.
    I myself am an example of this homeownership hopelessness. 
After returning from law school, I rented a place. After my 
rental agreement ended, I had to go live with my parents. I had 
to move in with my parents, because I could not find any 
housing. There is no housing on our reservation. There is 
nowhere to rent. There is nowhere to live.
    Even for those that want to buy their own home, there is no 
private housing market. The Ft. Belknap BIA processes only a 
single digit number of residential leases each year. Between 
the BIA's cumbersome title status report and the lengthy HUD 
184 process, it took one of our tribal members nearly two years 
to complete their private mortgage. He is the CEO of our tribal 
corporation and he has submitted written testimony for himself 
of his personal experience.
    The delays are often so long that either borrower or the 
bank usually just gives up. Simply put, we have nowhere to 
live.
    About ten years ago, our council created an economic 
development arm, the Island Mountain Development Group. We 
finally started to see a little bit of economic growth. Through 
its successful e-commerce company, Island Mountain has 
diversified and now employs more than 200 tribal members 
locally. Through Island Mountain, we have reduced our TANF 
clients by over 50 percent. In the south end of our 
reservation, we have reduced our unemployment by 50 percent. We 
have created a steady stream of governmental revenue.
    However, without a private housing market, our positive 
economic growth has hit a substantial barrier. With 
improvements in our economy, we have created an emerging middle 
class. However, they are trapped in poor housing.
    We struggle with bringing any more employees or bringing 
home tribal members after they have achieved their higher 
education. We literally have no place for them to live on the 
reservation. When we surveyed our Island Mountain employees 
about what they needed to make their lives better, the number 
one answer was access to housing.
    In August, our tribe passed our HEARTH Act regulations. We 
were told that the review would occur within the 120-day 
timeframe. However, since then, our council has been redirected 
to at least five different DOI employees, because the 
designated point person of the DOI left three years ago. The 
Department of the Interior needs a HEARTH Act residential 
leasing czar, a one-stop, streamlined process. We are concerned 
because the DOI has a backlog of 26 sets of HEARTH regulations.
    We also applaud HUD's efforts to increase their staffing 
for 184 loan processing. We understand that they currently 
process between 3,000 and 4,000 loans annually with only four 
staff. Additional staff and automation should help the backlog 
of 184 loan guarantees.
    At our local BIA office, there is not a single residential 
leasing staffer. The realty office is short four staff. Offices 
responsible for facilitating tribal housing markets must be 
fully staffed.
    In addition, the Senate Appropriations Committee recently 
passed language encouraging the DOI to digitize our land 
records, specifically Ft. Belknap. We need Indian Affairs to 
provide oversight and to promote appropriations. Without 
accurate and digital records, the private mortgage marketplace 
will remain unavailable for Native Americans that live in their 
homeland. We need access to TAAMS. We don't have access 
currently to TAAMS. Our tribal land department has spent over 
$25,000 on mirror software to try to recreate for ourselves the 
information available on TAAMS but because the systems do not 
communicate, our information is spotty, at best.
    Also, we propose the creation of a priority deployment 
mechanism. This will help expedite homeownership and financing. 
It allows tribes to designate priority housing areas which 
would then become first in line for records digitization and 
additional staffing.
    We also propose to clarify that which we already believe is 
the case, that mortgage guarantees are categorically excluded 
from Federal environmental review. This is something that is 
already allowed under existing HUD regulations. We provide this 
language and more in my written testimony.
    In conclusion, we are working very hard to push this 
boulder up the mountain for ourselves, to pull ourselves up by 
our bootstraps. But most of our housing and land processes are 
wholly or significantly controlled by the Federal Government.
    If Congress is not willing to address the real issue, to 
fully recognize our governmental sovereignty and restore full 
and complete tribal jurisdiction within our boundaries, then 
Congress must provide the resources for the outdated and 
inefficient system that it leaves us to live and work within.
    We commend HUD, the DOI, and BIA for their testimonies and 
solutions. We are willing to work with and be a pilot for any 
projects that might help expedite the process.
    Thank you for listening to some of the things we believe 
would help improve access to homeownership on Ft. Belknap. I 
look forward to the other panelists and to your questions. 
Thank you.
    [The prepared statement of Mr. Mount follows:]

 Prepared Statement of Hon. Nathaniel ``Nate'' Mount, Council Member, 
                      Ft. Belknap Indian Community
    Good afternoon, Mr. Chairman and members of the Committee. My name 
is Nate Mount. I am the River Assiniboine representative on the Fort 
Belknap Indian Community Council. I am pleased to be here today 
speaking for our Gros Ventre and Assiniboine Tribe, our Aaniiih and 
Nakoda people. I want to tell you about the home ownership challenges 
we face on our vast rural north central Montana reservation, as well as 
about some of things the Fort Belknap Indian Community has been doing 
to try to solve these challenges for ourselves.
    First, I am going to provide some context. I was born and raised on 
our Reservation.
    My father, Harlan Mount, our Tribal Housing Director, is here with 
me today. My father served as President of our Tribal Council and has 
previously come here to Washington to testify in that capacity. I grew 
up watching him serve our people and am honored to be here with him 
today, to try to continue to do the same.
    Interestingly it was almost exactly 75 years ago that several of 
our tribal leaders testified in a hearing to a Special Investigating 
Committee for the House Committee on Indian Affairs, about many of the 
same issues we are still testifying to today and Congress has still not 
fully addressed.
The Ft Belknap Indian Reservation & Our Housing Crisis
    Historically, our Reservation has suffered from high unemployment. 
Indeed, until recently, our Reservation unemployment rate hovered at 70 
percent, and about 85 percent on the southern end of our Reservation. 
Fort Belknap also has little, if any, natural resources to develop such 
as oil and gas or timber. The Fort Belknap Reservation is very remote 
and economic development is difficult. We are not near a major 
population center that would support a significant gaming enterprise. 
We are 200 miles from the nearest airport.
    We do have some modest agricultural and ranching enterprises, such 
as our buffalo herds, but our geographic isolation and distance from 
any significant shipping opportunity (such as air or rail) makes any 
production activities more than challenging. For years, aside from the 
small number of Tribal and federal jobs available working in government 
services, our people have relied on seasonal firefighting work or day-
laborer wages at area ranches. We have many members who still practice 
subsistence lifestyles. The median income is less than $12,000 per year 
according to recent statistics.
    The Fort Belknap Indian Community has more than 8,000 enrolled 
members, a little less than half of whom live on or near the Fort 
Belknap Reservation. For those of us who live on-Reservation, we 
typically live in multi-generational housing, with two and three 
generations living in two- or threebedroom homes. It is common to have 
13-18 people resident in a single home. This means our children often 
sleep on floors, in places they should not be. Our housing list is 
presently more than 150 families-long. According to our tribal housing 
director, the average wait-time on our housing waitlist is 3.4 years. 
For two-bedroom units, the wait is over four years. The housing units 
we do have are generally dilapidated. There has been little to no new 
housing construction for twenty-five years. There is no private housing 
market at Fort Belknap. The Fort Belknap BIA agency processes only a 
single-digit number of residential leases each year and even when a 
lease is issued, a home may not be built there for a wide variety of 
reasons such as lack of infrastructure, access, surveys, certified 
title and simultaneously given the near-total lack of any private 
conventional mortgage options available on-Reservation, despite the 
ostensible carrot of the HUD Section 184 loan guaranty program. Simply 
put, we have nowhere to live.
    I myself am an example of the hopelessness our people feel 
regarding housing. When I returned to the Reservation following law 
school, I added my name to the housing waitlist. But after years of no 
movement, and my knowledge that our Tribes had already exceeded the 
ten-percent threshold of housing participants who can be at 80-100 
percent of median income, I abandoned my effort and took my name off 
our housing list.
History of the Federally-Funded Housing Failures
    How did we get to this crisis point? We have long suffered from 
inattention. In 1970, a handful of low-rent units were built, followed 
by a few additional units per year until 1995. The housing units that 
were built in that timeframe suffer from poor insulation and other 
structural deficiencies and have been susceptible to significant mold 
problems. The last homes built with HUD funding were completed 25 years 
ago, in June 1994.
Past Failures with Using Tax Credits to Build Housing
    In 2000, Fort Belknap Housing Authority was dissolved and the Fort 
Belknap Indian Community Council became the Board of Directors. Since 
then, the Council has become directly responsible for housing.
    Since then, we have had three tax credit home projects. These 
included relocating about a dozen modular airbase homes from North 
Dakota. These homes were attended by structural, financial and 
political issues and sadly haven never been habitable.
    In the early 2000s, Housing had a down payment assistance program 
where eligible home buyers applied for and could receive $25,000. There 
were a number of Tribal members selling their homes, and the buyers 
utilized this. In 2004, the assistance was used to purchase homes off 
of our Reservation.
    In 2005, the council applied for and was approved for a tax credit 
project to rehab 49 Housing units. The rehab started in March of 2006. 
But our Community struggled to understand the federal tax credit laws, 
resulting in a number of renters being ineligible, causing a few 
homeless members.
    In 2006, the Council took action to apply for approximately 25 tax 
credit modular homes. The buildercontractor was a company from New 
Mexico, while the units were built somewhere around Denver. This 
project had a number of structural concerns that had to be corrected 
right after delivery and setup. This caused a number of penalties that 
included the developer's fee of well over a million dollars, plus 
additional penalties.
Unsuccessful BIA Residential Leasing Program
    Options through the BIA are little better. At the Agency level, 
when the local BIA employees receive a residential leasing application 
package, they work through a checklist of items including verifying a 
correct tribal resolution, legal description, survey (if applicable), 
encumbrances and/or leases, contact with any existing lessor that has a 
land contract/lease for relinquishment of a particular site on trust 
land for residential purposes, and other items in the nine-page local 
BIA checklist.
    At Fort Belknap, the BIA processes only a single-digit number of 
residential leases per year. Even when they obtain BIA residential 
leases, many Tribal members abandon efforts to place a home on that 
land due to their inability to secure financing.
    It can easily take two years for a mortgage leasehold to be 
completed and finalized, from initial request to the tribal council and 
through the entire process with a final recording at the BIA Land, 
Titles and Records Office (``LTRO''). The size of land, number of 
encumbrances (such as rights of way and service agreements), multiple 
uses of land (such as part of a range unit, agricultural lease, etc.), 
and other issues increase the review time to certify a particular tract 
of trust land is available for residential leasing purposes. This 
unreasonably long time causes many Tribal members (and their mortgage 
lenders) to abandon the process of seeking a mortgage leasehold and a 
Section 184 mortgage guaranty.
    Despite these desperate attempts by our Tribal Council to bring 
housing solutions to our people, we have been unable to do so, yet. We 
lack the most basic dignity of home ownership and safe, secure shelter 
for our families.
The Improving Ft. Belknap Economy--Island Mountain Development Group
    But in the last ten years, our Tribal economic arm, Island Mountain 
Development Group, has brought an incredible ray of hope to our 
Community, creating, managing and operating e-commerce businesses, 
realty and agriculture opportunities, a technology company, a 
construction company and is now moving into government contracting. 
Island Mountain now has more than 200 employees, nearly all of whom are 
Tribal members and most of whom work in our state-of-the-art customer 
contact center on the southern end of our Reservation. Our Tribal 
citizens have grown up in largely subsistence households, meaning they 
hunted or grew their own food. Until two years ago, the only store on 
our entire Reservation was a gas station convenience store, with no 
fresh food. The closest significant grocery store was 80 miles away. 
Many tribal members do not have vehicles. There is very limited public 
transportation (one bus per day going to the nearest grocery store). 
The Tribal government is the largest employer, followed by the federal 
government, and those jobs are 30 miles away from the poorest end of 
the Reservation, where Island Mountain now operates.
    Island Mountain has reduced the unemployment rate on our 
Reservation by more than 50 percent, created a steady stream of 
governmental revenue the Council has been able to use an emergency 
back-stop for government programs-such as summer service and funding 
our anti-meth initiative. Additionally, is Island Mountain's support in 
standing up a new Tribal store and healthy food cooperative with a 
orchard, greenhouses, and a professional kitchen where Tribal members 
can preserve foods they grow or purchase and also learn diabetic 
cooking techniques.
Emerging Middle Class
    For purposes of this hearing, I am sharing this background about 
Island Mountain because through their innovation, we have an emerging 
middle class at Fort Belknap. Island Mountain employees have a base 
salary $7/hour higher than the average Montana base salary.
    The salaries and wages made possible by Island Mountain have made a 
world of positive difference in the lives of these extended families. 
Our estimates are that each one Island Mountain job at the call center 
supports nine Tribal citizens. That means well more than 1,000 people 
that are not looking to the Tribal and federal governments for 
assistance-they are self-sufficient. They are financially literate. 
They understand credit. They have been able to purchase automobiles and 
clothe and feed their families, as well as assist grandmothers with 
utility bills and support nieces and nephews and the like.
    But when we survey our Island Mountain employees about what they 
need to make their lives better, the number one answer is access to 
housing, access to home ownership opportunities. While they are a 
tremendous example of resilience, of what we can achieve for ourselves 
when we pull ourselves up by our bootstraps, this most basic dignity of 
having a home eludes them.
New Positive Steps Tribe Is Taking to Create Housing
    The Fort Belknap Indian Community Council understands that housing 
is at the center of community well-being, and is utilizing all 
available tools to solve our housing crisis for ourselves.
    Tribal Residential Leasing Act Under HEARTH Act. On August 5, 2019, 
our Council enacted the Fort Belknap Indian Community Residential 
Leasing Act, seeking to take advantage of the 2012 Helping Expedite and 
Advance Responsible Tribal Homeownership (HEARTH) Act amendments to the 
Indian Long-Term Leasing Act. As you know, the HEARTH Act provides 
authority for Indian tribes to lease tribal trust lands directly 
pursuant to tribal law, without further Secretarial approval. The 
HEARTH Act is a valuable tool that: (1) empowers tribes to realize 
their potential for economic growth and job creation on tribal lands, 
(2) increases community development, and (3) strengthen tribal self-
determination.
    Our Residential Leasing Act provides our Tribal entities another 
tool with which to partner effectively and increase efficiencies in 
residential leasing by removing impediments and delays attendant to the 
current BIA leasing process. Our Residential Leasing Act would move 
critical functions from the BIA to the Land Department and other Tribal 
entities as contemplated in the HEARTH Act.
    Our Council chose to narrowly focus on only residential leasing in 
our HEARTH regulations in order to try to expedite the Department of 
the Interior's review and approval. We have also undertaken significant 
intra-Tribal implementation efforts in the two months since our passage 
of our Residential Leasing Act, working with all our Tribal 
departments-Tribal Land, Environmental, Housing, Planning, THPO, 
utilities, etc.-and working with the BIA Superintendent, to ensure that 
we are ready to begin new home construction next spring, when the 
narrow window of construction that life on the Montana Hi-Line allows, 
opens.The Residential Leasing Act is a tool that could be used to 
support expedited private residential development, which Island 
Mountain is prepared to lead for us.
    Purchase of Home Building Business to Subsidize on Reservation 
Builds. Island Mountain recently acquired one of the premiere custom 
home-building businesses in Montana and is getting ready to start a 59-
lot subdivision construction project in Billings. This will help them 
create cost and materials efficiencies for on-Reservation housing 
construction as well. Additionally, we are assessing Community needs to 
identify the types of housing needed--single, multiple, elder, 
supportive, etc., and considering infrastructure needs like water, 
wastewater, roads, broadband, schools and the overall community.
    Creation of Own Mortgage Lender. Island Mountain has brought on a 
conventional mortgage specialist, with 20 years of industry experience, 
to help stand up Tribal mortgage products that are affordable for 
Tribal members and positioned to be sold in the secondary mortgage 
market to the likes of Fannie and Freddie. She is also working to 
provide education modules for Tribal borrowers and procedures for 
regulatory enforcement of Tribal mortgages that could benefit both our 
internal Tribal mortgages and encourage third-party conventional 
lenders to work with Tribal members in a manner they are presently 
disinclined to do. In short, we are actively working on all aspects of 
planning for housing development, save the biggest one-our residential 
leasing authority-until we have DOI approval.
    Still Waiting for DOI Approval Under HEARTH Act. Fort Belknap 
electronically submitted our Residential Leasing Act to the Department 
for review on September 10, 2019 and in-person with paper copies to 
Deputy Director Jim James in Washington, D.C., on September 11, 2019. 
That meeting was led by my colleague, Fort Belknap Councilman and Lands 
Committee Chairman Curtis Horn. At that meeting, Councilman Horn was 
informed the Department's review would include a first-level review by 
the Region and a secondary review by the Solicitor's office, and that 
the Department thought both levels of review could be accomplished 
quickly and well within the 120-day timeframe within which the 
Department must approve or disapprove the Tribe's submission (per 25 
U.S.C.  415(h)(4)).
    Councilman Horn shared at that meeting, and in later meetings with 
Senators Daines and Tester, the grim picture of the housing crisis at 
Fort Belknap despite an emerging middle class at Fort Belknap flowing 
from the Tribes' economic development efforts and enthusiastic Tribal 
member interest in home ownership. While we were encouraged by our 
advocacy efforts here in Washington in September, in the month since, 
we have seen little progress.
    Instead, our Residential Leasing Act has seemingly drifted back and 
forth within the Department. The Department of the Interior website 
lists as the HEARTH lead a person who has not worked at the Bureau for 
nearly three years. Our counsel has been directed or redirected to at 
least five different DOI employees in seeking review of our narrowly 
focused Residential Leasing Act.
    Our submission should be capable of quick review. First, Fort 
Belknap's submission is narrowly focused on residential leasing. 
Second, Fort Belknap's draft is modeled on other tribes' residential 
leasing regulations recently approved by the Department. Third, as we 
understand Fort Belknap communicated to Mr. James and others, the Tribe 
is already actively implementing its efforts, including in holding 
three intra-Tribal and BIA-Fort Belknap all-day working sessions to 
ensure that they are all ready to begin implementing the Residential 
Leasing Act in early 2020. Indeed, my co-panelist, Ms. Kunesh, has 
participated in our implementation sessions and has been a tremendous 
source of help and support to us as we try to solve our housing crisis. 
We are grateful to her and her Federal Reserve colleagues.
    Additionally, the Fort Belknap has been working on parallel paths 
with HUD on Section 184 loan guarantee reforms, our own Tribal mortgage 
code, and securing third-party partners for the delivery of mortgage 
options for Tribal members.

    Quite literally what is holding us up from solving these problems 
for ourselves is our wait for DOI's permission to allow us to help 
ourselves.

    We are concerned because we understand the Department has a current 
backlog of 26 sets of HEARTH regulations from tribes around the country 
and is averaging just two HEARTH approvals per year. We see no reason 
it should take the Department four months, or longer, to review 
regulations like ours which are narrowly focused, modeled after recent 
approvals, and include just six pages of substantive provisions (most 
of our Residential Leasing Act is definitions).
    To our knowledge, we are the first Great Plains/Rocky Mountain 
tribal government to adopt HEARTH regulations and one of few in rural 
areas looking to utilize it. We hope that our efforts will provide an 
example from which other tribes can learn in the future. To get there, 
we recommend the Department's allocation of additional Solicitor 
resources to HEARTH reviews, as well as the Department's identification 
of a ``HEARTH Czar,'' who is a one-stop resource to help tribes 
navigate the DOI HEARTH-approval process.
    In addition to securing our Residential Leasing Act approval to 
restore our inherent Tribal authority over our own lands and allow us 
some escape from Federal bureaucratic entanglements, we believe 
improvements in the accessibility and reliability of BIA land records 
are essential for us to succeed in establishing a private housing 
market at Fort Belknap.
Digitization of Land Documents Needed
    The Senate Appropriations Committee has recently encouraged the 
Department's commitment of appropriate Trust-Real Estate resources to 
assist us in HEARTH implementation:

         ''The Committee also recognizes increased digitization of 
        Indian land records would increase efficiency within Trust-Real 
        Estate Services. Within the amounts provided, the Committee 
        encourages Trust-Real Estate Services to implement additional 
        digitization of Indian land records to promote Tribal economic 
        development opportunities in Indian Country, including the Fort 
        Belknap Indian Community.'' Report No. 116-123 to accompany S. 
        2580 at p. 57.

    More accurate and more accessible land records are the lynch-pin to 
housing financing. Creation and maintenance of a digital system for 
maps and records (e.g., property interest, encumbrance and leasehold 
mortgage) is essential for efficiency and third-party lenders. We 
respectfully request SCIA Oversight of the implementation of this 
digitization provision.
Tribes Need Access to TAAMS
    We would like to get our Reservation land records much closer to 
what conventional mortgage lenders observe outside reservations. 
Presently, the BIA is also responsible for all relevant LTRO functions 
unless tribal employees have been subject of a background check for 
clearance, have been trained in the Trust Asset and Accounting 
Management System (``TAAMS'') for federal records on trust lands for 
access, and are covered by a cooperative agreement between the Tribes 
and the BIA for various levels of access to the records system. We do 
not have access to BIA's records or the TAAMs systems.
    Our Tribal Land Department spent $25,000 on mirror software so we 
could try to recreate for ourselves the information available in the 
TAAMs system. But because the systems don't talk to each other, our 
Tribal Land has only incomplete information. And what they do have is 
often inaccurate, with land descriptions not matching survey records 
and the like. But a certified Title Status Report is a requirement for 
a Section 184 loan guaranty and our Tribal members have been 
experiencing waits of a year or more to get their TSRs.
Nearly Two-Year Wait for HUD 184 Loan Guaranties
    Island Mountain CEO Terry Brockie, a Gros Ventre Tribal member, is 
a great example of how far afield our reality is from the norm. He is a 
very credit-worthy person, serving as our CEO and before that having 
held other professional jobs and having served as county superintendent 
of schools. As detailed in his written testimony submitted to the 
Committee, it took him 23 months, nearly two full years, to secure a 
184 loan guaranty. Compare that to the standard 3-12-week range for 
off-reservation commercial mortgages, or frankly the one month average 
for some lenders. At that rate, Mr. Brockie waited 23 times longer than 
private, non-HUD 184, homeowners. Quite simply, mortgage lenders cannot 
hold underwriting open for years waiting for all the Section 184 boxes 
to be checked.
Recommended Solution: ``Priority Deployment Mechanism''
    We agree with HUD that it is essential to update the loan guarantee 
program because it remains the same since it was established in 1992. 
We also applaud HUD's efforts to increasing their staffing for 184 loan 
processing. We understand that they currently process between 3,000 to 
4,000 loans per year with only four staff. And keep in mind that, when 
184 issues go back to the BIA at Fort Belknap, there is not a single 
dedicated residential leasing person, and the Fort Belknap Agency is 
presently short four realty staff. At a minimum, the Federal agencies 
responsible for administering these programs should be fully staffed.
    We also propose additional reforms to the 184 process that we 
believe would expedite home ownership. We propose to borrow extensively 
from HEARTH and Opportunity Zone language recently enacted by Congress 
to add a new subsection allowing tribes to designate priority areas for 
housing development. Areas so designated would be first in line for 
records digitization and additional staffing support. Essentially, this 
would allow tribes to fast-track mortgage guarantees for housing 
priority areas on reservations. We propose that tribes make the 
designations, notify the HUD Secretary, and thereafter the Bureau would 
have 60 days to get the records in order and 90 days to generate 
certified TSRs. We also propose to clarify that all mortgage guarantee 
reviews are categorical exclusions from Federal environmental review so 
that applicants do not have to do irrelevant things like obtain a 
certification from the Bureau that their home in north central Montana 
does not impact a coastal zone (presently an EPA requirement for 184 
guaranties). The HUD regulations are a confusing patchwork of cross-
references to other regulatory sections and acts, and while we think it 
is already accurate that mortgage guaranties are categorical 
exclusions, it would be helpful to applicants to just state that 
expressly.

    Our proposed addition to 12 U.S.C.A.  1715z-13a would be a new 
subsection (i)(8):

        Priority Deployment Mechanism

        There is established in this subsection the Priority Deployment 
        Mechanism for the Indian Housing Loan Guarantee Fund for the 
        purpose of encouraging more rapid delivery of loan guarantees 
        under this Section. The Priority Deployment Mechanism includes 
        three principal components: designation by tribal governments, 
        increased levels of supporting services from the Bureau of 
        Indian Affairs and categorical exclusion from federal 
        environmental reviews.

        A.  Designation. For purposes of this subsection (8), a tract 
        of land in an Indian area may be designated by a tribe as 
        eligible for the Priority Deployment Mechanism if the tribe 
        nominates the tract for designation as qualified for the 
        Priority Deployment Mechanism and notifies the Secretary in 
        writing of such nomination.

        B.  Bureau of Indian Affairs Assistance. Upon designation and 
        notification as set forth in subsection 8(a) herein, the 
        applicable Bureau of Indian Affairs Land Titles and Records 
        Office shall digitize all land records associated with the 
        designated tract within 60 days of notice of the designation. 
        The Bureau of Indian Affairs shall deploy personnel as needed 
        to review land records associated with any tract designated as 
        qualified for the Priority Deployment Mechanism in order to 
        facilitate delivery of certified Title Status Reports to the 
        Department in connection with any loan guarantee application 
        under this Section within 90 days of the date of the borrower's 
        application.

        C.  Categorical Exclusion from Additional Environmental 
        Reviews. Because tribal governments will make designations 
        under subsection 8(A) pursuant to any applicable tribal 
        environmental laws and are making such designations to 
        prioritize land for Indian area housing developments, any tract 
        designated pursuant to subsection 8(a) as qualified for the 
        Priority Deployment Mechanism shall be categorically excluded 
        from any additional federal environmental review requirements, 
        including but not limited to as provided in 24 C.F.R.  
        1005.105(e), 24 C.F.R. 1000.20, 24 C.F.R. Part 50, and 24 
        C.F.R. Part 58 because priority deployment of loan guarantees 
        under this Section do not alter physical conditions in a manner 
        or to an extent that would require review under NEPA or other 
        laws and authorities applicable to other Department actions.

Conclusion
    Thank you for listening to our long list of things we believe would 
help improve access to home ownership for Fort Belknap Tribal members. 
We are working very hard to push this boulder up the mountain for 
ourselves. What we really want is for the Federal government to get out 
of the way- to put these decisions and processes about our lands back 
in our inherent Tribal authority. We believe this is consistent with 
self-determination policy and the only way our people will be able to 
experience the dignity of secure, affordable, dignified housing on our 
Reservation.

    The Chairman. Thank you.
    Director LaCounte.

   STATEMENT OF DARRYL LACOUNTE, DIRECTOR, BUREAU OF INDIAN 
            AFFAIRS, U.S. DEPARTMENT OF THE INTERIOR

    Mr. LaCounte. Good afternoon, Chairman Hoeven, Vice 
Chairman Udall, and members of the Committee.
    My name is Darryl LaCounte. I am the Director of the Bureau 
of Indian Affairs at the Department of the Interior. Thank you 
for the opportunity to provide testimony on behalf of the 
department regarding homeownership in Indian Country.
    As a part of a joint effort with our Federal partners, the 
BIA Division of Real Estate Services helps tribal members 
purchase homes. As a matter of fact, it is the top priority 
within our Real Estate Services Program, to process the land 
sales, the leases and the mortgages associated with housing for 
American Indian people to afford them the opportunity to 
achieve the security and satisfaction that comes with 
homeownership.
    Tribes oftentimes do not agree with each other on 
priorities based upon their local communities and economies, 
but I am quite certain that all tribal leaders would agree 
there is no higher priority than housing in Indian Country for 
their people.
    The department has taken very important steps to further 
homeownership in Indian Country. On July 15th, 2019, the 
department completed the Mortgage Handbook. I personally signed 
the Indian Affairs policy, 52 Indian Affairs Manual 4: 
Processing Mortgages on Trust Properties. This handbook clearly 
documents the procedures required to be successful in our 
mortgaging program within our Real Estate Services programs. It 
is the primary resource for BIA Division of Realty staff, and 
part of our effort to standardize and streamline the mortgage 
process.
    We have also created the Contact Guide for Mortgage Lending 
in Indian Country. The Contact Guide was prepared for the 
specific purpose of supporting the lending process in Indian 
Country.
    Before the application process begins, lending officers who 
take applications from prospective borrowers should use this 
guide to ensure the appropriate office of the BIA is involved 
and the correct processing codes are included on all mortgaging 
applications in all phases of the process. Using this guide 
will expedite the lending process in Indian Country.
    In February of 2018, the BIA Office of Trust Services began 
a two-year initiative to develop a BIA Enterprise Land and 
Resource Data Warehouse to expand data sharing capabilities 
utilizing existing business data repositories and analytical 
tools. The BIA Enterprise Land and Resource Data Warehouse will 
serve as a critical component of a DOI-wide Enterprise Data 
Warehouse. The BIA initiative will consolidate all data from 
BIA's various business subsystems within the Trust Asset and 
Accounting Management System, known as TAAMS, and those other 
standalone data tools, including other systems that assist our 
real estate programs in managing trust and restricted lands for 
the benefit of tribes and individual Indian owners.
    This initiative will allow BIA to integrate data from the 
TAAMS system and other data sources into operational data views 
that can easily be accessed as a single point for strategic and 
operational reporting and analytical needs. The data warehouse 
will support land management processes to best manage and 
maintain thorough standardized core business processes and 
data, while enabling line of business details to be captured. 
It will provide other advantages by decreasing operational 
costs, supporting the modernization initiatives based on 
reusing and minimizing development activities, and providing 
management with tools to effectively direct land and resource 
management activities.
    Additionally, by integrating organizational data that is 
fragmented in offline systems, the data warehouse and the use 
of these dashboards will reduce the impacts on transactional 
systems like TAAMS, and its subsystems, that were not designed 
or are conducive to handling large volumes of complex queries 
and unique reports. The data mining capabilities also allow 
access to large volumes of historical data that reside in 
disparate systems and will assist in responding to compliance 
questions, legislation, and other data needs.
    The solution requires expanded database management, 
development, and software delivery services, as well as 
training, interfaces, and continued updates of security 
measures to remain secure and in compliance with government IT 
standards.
    BIA recognizes that the business processes and rules, 
information requirements, and supporting data for each of the 
above major land and natural resource management phases, have 
significant similarities that are applicable to natural 
resource management for both Indian and Federal land. That is, 
there are significant opportunities for process and data 
standardization within the accompanying component re-use.
    In conclusion, the BIA is committed to providing a state-
of-the-art data solution for managing the mortgages and 
increasing homeownership on Indian trust lands and developing 
tools to enhance these opportunities. BIA continues to 
coordinate with HUD so that they may access pertinent 
information, such as title status reports through a data 
portal, to assist in further advancing homeownership in Indian 
Country.
    Mr. Chairman, thank you for the opportunity to testify 
today. I am glad to answer any questions from the Committee.
    [The prepared statement of Mr. LaCounte follows:]

   Prepared Statement of Darryl Lacounte, Director, Bureau of Indian 
                Affairs, U.S. Department of the Interior
    Good afternoon Chairman Hoeven, Vice-Chairman Udall, and Members of 
the Committee. My name is Darryl LaCounte and I am the Director of the 
Bureau of Indian Affairs (BIA) at the Department of the Interior 
(Department).
    Thank you for the opportunity to provide testimony on behalf of the 
Department regarding homeownership in Indian Country. As a part of a 
joint effort with our federal partners, the BIA Division of Real Estate 
Services helps tribal members purchase homes. The Assistant Secretary--
Indian Affairs has made it a top priority to advance Indian Country 
economic development efforts and help individual Indians achieve the 
security and satisfaction that comes with homeownership.
Resources Furthering Homeownership
Mortgage Handbook
    On July 15, 2019, the Department completed the Mortgage Handbook. 
This handbook documents the procedures required to implement the Indian 
Affairs policy, 52 IAM 4: Processing Mortgages of Trust Properties. It 
is a primary resource for BIA Division of Realty staff, and our effort 
to standardize and streamline the mortgage process.
Contact Guide
    We have also created the Contact Guide for Mortgage Lending in 
Indian Country (Contact Guide). The Contact Guide was prepared for the 
specific purpose of supporting the lending process in Indian Country. 
Mortgage production proceeds in four phases: origination, processing, 
underwriting and closing. However, before the application process 
begins, lending officers taking applications from prospective borrowers 
should use this guide to ensure the appropriate office of the BIA is 
involved and the correct processing codes are included on all mortgage 
applications and in all phases of the process. Using this guide will 
expedite the lending process in Indian Country.
External Portal
    In February 2018, the BIA Office of Trust Services began a two-year 
initiative to develop a BIA Enterprise Land and Resource Data Warehouse 
to expand data sharing capabilities utilizing existing business data 
repositories and analytical tools. The BIA Enterprise Land and Resource 
Data Warehouse will serve as a critical component of a DOI-wide 
Enterprise Data Warehouse. The BIA initiative will consolidate all data 
from BIA's various business subsystems within the Trust Asset and 
Accounting Management System (TAAMS) and those that are standalone data 
tools (Geographic Information System, National Irrigation Information 
Management System, National Indian Oil and Gas Evaluation Management 
System, Tracking Accountability and Productivity System, Probate Case 
Management and Tracking System, Realty Tracker, and Cadastral Automated 
Reservation System). This initiative will allow BIA to integrate data 
from the TAAMS system and other data sources into operational data 
views that can be easily accessed as a single point for strategic and 
operational reporting and analytical needs.
    The data warehouse will support land management processes to best 
manage and maintain thorough standardized core business processes and 
data while enabling line of business details to be captured. It will 
provide other advantages by decreasing operational costs, supporting 
the modernization initiative based on reusing and minimizing 
development activities, and providing management with the tools to 
effectively direct land and resource management activities.
    Additionally, by integrating organizational data that is fragmented 
in offline systems, the data warehouse and the use of these dashboards 
will reduce the impacts on transactional systems like TAAMS, and its 
subsystems, that were not designed or conducive to handling large 
volumes of complex queries and unique reports. The data mining 
capabilities also allows access to large volumes of historical data 
that live in disparate systems and will assist in responding to 
compliance questions, legislation, and other data needs.
    The major phases and related data that support land and natural 
resource management are:

   Ownership Management (managing ownership information to 
        specific parcels of land);

   Inventory Management (inventory of land holdings and 
        encumbrances);

   Use Authorization Management (managing permitting, leasing, 
        rights of way activities);

   Planning (planning activities to maintain and conserve the 
        natural resource);

   Compliance (lease compliance activities);

   Monitoring and Auditing (availability and accessibility of 
        natural resources); and

   Custodial Management (maintenance of the land and natural 
        resources).

    The solution requires expanded database management, development, 
and software delivery services, as well as training, interfaces, and 
continued updates of security measures to remain secure and in 
compliance with government IT standards. BIA recognizes that the 
business processes and rules, information requirements, and supporting 
data, for each of the above major land and natural resource management 
phases, have significant similarities that are applicable to natural 
resource management for both Indian and Federal land. That is, there 
are significant opportunities for process and data standardization with 
accompanying component re-use.
Conclusion
    Mr. Chairman, the BIA is committed to providing a state-of-the art 
data solution for managing the mortgages and home ownership on Indian 
trust lands and developing tools to enhance these opportunities. At the 
direction of the Secretary, BIA continues to coordinate with HUD to 
develop a HUD Dashboard to access pertinent information, such as Title 
Status Reports, to advance homeownership in Indian Country.
    Thank you for the opportunity to testify today. I am glad to answer 
any questions from the Committee.

    The Chairman. Thank you.
    Director Kunesh.

  STATEMENT OF PATRICE H. KUNESH, DIRECTOR, CENTER FOR INDIAN 
              COUNTRY DEVELOPMENT; ASSISTANT VICE 
         PRESIDENT, FEDERAL RESERVE BANK OF MINNEAPOLIS

    Ms. Kunesh. Chairman Hoeven, Vice Chairman Udall and 
members of the Committee, thank you for the opportunity to 
testify today on the crisis of lending and homeownership in 
Indian Country.
    My name is Patrice Kunesh. I am the Director of the Center 
for Indian Country Development at the Federal Reserve Bank of 
Minneapolis. The views I express here today are not necessarily 
those of the Minneapolis Fed or the Federal Reserve system.
    The Center for Indian Country Development is the Federal 
Reserve system's national research center focused on Native 
Nations' economic issues. We are based at the Minneapolis Fed, 
whose region is home to more 45 tribal Nations and also to you, 
Chairman Hoeven, Senators Tester, Daines, and Smith.
    Becoming a homeowner has long been considered the path to 
creating social and economic health and wealth for many 
Americans. However, Native Americans have largely been denied 
this opportunity, especially those living on reservation trust 
lands. In my short time here today, I would like to share a 
handful of key messages to guide you in your policymaking.
    First, tribes have sovereign authority over their lands but 
they do not have control over the complex Federal processes to 
put those lands to good use. As we move forward to improve 
access to housing and affordable lending, we need to fix a 
collection of byzantine processes that create untenable 
impediments. For example, the 184 program from HUD is a very 
popular, much needed program. But in recent years, 93 percent 
of those loans have bypassed reservations, mostly because of 
administrative burdens.
    Second, there is the human element. Those impediments have 
deprived real people and real families, Native people and 
Native families, much like my own on the Standing Rock 
Reservation, from building personal assets. Those processes 
also have discouraged investment to create prosperity among our 
Native communities.
    With that context in mind, let me offer a few 
recommendations. For one, there must be an expansion of access 
to capital and credit in Indian Country. As conventional 
lenders have retreated from Indian Country, Native community 
development financial institutions, or Native CDFIs, have 
become critical sources of capital for home loans. They 
intimately know the lending needs and capacity of their 
constituents. Tapping into their strengths and their network 
and supporting them with more funds could deliver all of the 
Federal key programs, such as the HUD 184 Loan Guarantee, USDA 
Rural Development 502 and the Veterans Affairs Native American 
Direct Loan.
    For another, I recommend using innovative loan products and 
delivery systems. For example, at USDA, it is expanding access 
to public capital by providing Native CDFIs in South Dakota 
relending authority to deploy 502 home loans on trust lands. 
That could mean access to millions of dollars of housing 
investment in Indian Country, and should be expanded 
nationwide.
    But we need even more innovation to support this 
persistently underserved population, such as pooling leasehold 
mortgages and access to a secondary market. Recent Center for 
Indian Country Development research found that Native borrowers 
for homes on reservations are significantly likely to have 
higher-priced mortgages, with rates nearly two percentage 
points higher than for non-Native borrowers outside the 
reservation. In 2016, that meant that the average Native 
American borrower would pay $107,000 in more interest over a 
30-year mortgage. This, I believe, is a matter worthy of your 
concern and examination.
    Chairman Hoeven, members of the Committee, the Native 
population is growing at a rate far higher than the national 
rate. So is real per capita income, although it remains 
stubbornly low. There is a scarcity of housing supply on 
reservations and an enormous unmet need.
    That is why seeking solutions to Native American housing 
and lending crises can deliver a substantial return on 
investment to our economy. Even more important are the 
powerful, life-changing impacts that homeownership could bring 
to families, along with the needed hope homeownership can 
instill in our Native communities.
    Thank you so much for this opportunity. I look forward to 
your questions.
    [The prepared statement of Ms. Kunesh follows:]

 Prepared Statement of Patrice H. Kunesh, Director, Center for Indian 
Country Development; Assistant Vice President, Federal Reserve Bank of 
                              Minneapolis
Introduction
    Chairman Hoeven, Vice Chairman Udall, and members of the Committee:
    Native nations' economies and populations are among the fastest 
growing in the United States, yet the gap in homeownership rates 
between tribal lands and the rest of the country remains unacceptably 
wide. Despite Native households' steadily increasing credit scores and 
strong preference for homeownership, a smaller share of Native 
households own homes today than in 2000, and homeownership rates among 
American Indians are lower than the nation as a whole. \1\
    Some of this gap is due to limited resources, but restricted access 
to credit and capital is stifling the development of Indian Country 
housing stock. Administrative burdens, lack of access to land title 
records and data, and inter-agency inefficiencies have reduced 
conventional lender participation in trust land lending. In addition, 
federal programs geared toward mortgage lending for Native people 
largely bypass reservations. Even when Native borrowers are able to 
secure a home loan on the reservation, their mortgages are higher 
priced: nearly 2 percentage points higher than for non-Native borrowers 
outside the reservation. \2\
    This testimony presents an analysis of these trends and proposes 
reasons for the incongruity between homeownership rates and signs of 
other economic growth in Indian Country. It also shares examples of 
tribal government institutions that are making homeownership work on 
trust lands and of federal agencies pursuing innovative housing finance 
efforts to meet the dire need for housing in Indian Country.
    The Center for Indian Country Development (CICD) at the Federal 
Reserve Bank of Minneapolis uses its expertise in economic research and 
community engagement to better understand housing challenges and find 
solutions. \3\ The CICD is the national economic research initiative 
within the Federal Reserve System. Our research reveals a complex web 
of historical and legal forces that make it unreasonably difficult to 
use much of tribal lands for the benefit of Native people for mortgage 
lending and other economic development. \4\
Native Americans and Housing
    Today, 573 federally recognized Indian tribes \5\ control about 60 
million acres of land in the United States. The vast majority of these 
tribal lands are held in trust \6\ by the federal government and are 
encompassed within American Indian reservations. Social and cultural 
connections to Indian Country remain strong among the 5.2 million 
American Indian and Alaska Native (AIAN) peoples. \7\ This is a rapidly 
growing population. \8\ About 60 percent of Native people live on or 
near reservations (also referred to as tribal areas in the U.S. 
Census). \9\ Options for housing in tribal areas are extremely limited, 
and households confront a very different market than the one found in 
non-tribal areas.
    There is a drastic need to increase both the supply and quality of 
housing in tribal areas. In 2017, HUD estimated that 68,000 housing 
units were needed to ease overcrowding and replace substandard homes in 
tribal communities, and the units needed today likely have increased. 
We believe this number underestimates the severity of overcrowding on 
reservations. About 16 percent of reservation households are 
overcrowded, \10\ compared to 2.2 percent of the general population. 
\11\ All told, severe overcrowding, poor quality housing stock, and a 
rapidly growing population mean the real need for additional housing 
units is likely substantially higher than the 2017 estimate. The 
precise level of need is difficult to gauge because some tribal-level 
data generally is unavailable. \12\ The social consequences of 
substandard and inadequate housing are distressing. They include 
chronic disease and other health problems, as well as harmful effects 
on childhood development. \13\
    Additional housing units are also required to meet the demands for 
homeownership in Indian Country. About 75 percent of Native households 
in tribal areas report a strong desire to own their home, \14\ 
confirmed by survey findings from recent community needs assessments. 
\15\
    Tackling homeownership on trust land also would address fundamental 
issues that affect the entire spectrum of economic development in 
Indian Country and unlock potential for community benefits though 
investments on reservation lands. For example, creating private 
homeownership opportunities in Indian Country relieves pressure on 
traditional housing programs that largely administer a stock of 
subsidized rental properties. Quality, affordable rental housing and 
repairs to existing owner-occupied and rental properties are necessary 
but not sufficient for supporting continued economic growth in Indian 
Country.
    Tribes have sovereign authority over their lands, but they do not 
have control over the federal processes to put these lands to good and 
productive use. The Bureau of Indian Affairs at the U.S. Department of 
the Interior (BIA) oversees the process for approving loans on trust 
lands. The path to homeownership on trust land requires navigating this 
complex maze of intraand inter-agency steps and touch points. 
Fundamental reforms are needed to standardize the mortgage review 
process and make it efficient and reliable for lenders and borrowers 
alike. \16\ Overcoming decades of housing deficits and meeting the 
pressing demands for homeownership across Indian Country require 
targeted investments across an array of new housing construction and 
housing preservation. The key now is to align processes and policies, 
backed by a firm commitment to accountability and transparency.
Enduring Benefits of Investing in Native Communities
    A growing body of evidence shows the long term benefits of 
investing in Native communities and the positive economic impact on 
tribal institutions. \17\ The need is great and Indian Country is 
poised to take advantage of these investments.
    As a whole, the Native population is growing much faster than the 
national population, increasing by almost 27 percent between 2000 and 
2010, compared to an overall U.S. rate of about 10 percent. While AIAN 
household income is still far behind other demographic groups, Native 
people overall have realized a steady increase in real per capita 
income. \18\ Social and cultural connections to Indian Country remain 
strong, with a high percentage of tribal citizens, about two thirds, 
living on or near reservations.
    Indian Country is a distinctively important component of the 
national economy. Collectively, tribes are the 13th largest employer in 
the United States. Tribal government gaming and other reservation 
businesses employ more than 700,000 people and offer benefits and 
diverse occupational opportunities. Tribal revenue delivers billions of 
dollars into local economies and contribute significantly to their tax 
base.
    Evidence suggests that tribal revenues positively influence 
reservation households. For example, modest increases in income to 
tribal citizens tend to dramatically improve measures of educational 
attainment, arrest rates, and civic engagement. \19\ Other benefits 
from enhanced income stabilization include decreased rates of smoking, 
alcohol consumption, and obesity.
    Positively changing household incomes also improves economic 
opportunities in the long run. The CICD's recent assessment of Indian 
Country data from the Opportunity Atlas finds that Native children 
growing up in tribal statistical areas show greater upward mobility for 
all parental income levels. \20\ This suggests that investing in 
reservation communities equates to investments in our children, and 
offers the hope of healthy and productive lives. \21\
    To sustain continued growth and address intergenerational wealth 
gaps, these investments must include housing. Stable, safe, and 
affordable homes not only support a healthier and more educated 
workforce, but they allow community members to take and keep jobs, 
raise families, and build a vibrant economy where businesses flourish 
and children thrive.
Federal Programs with Native American Mortgage Products
    After centuries of disastrous federal policies that impoverished 
and decimated Native communities, Congress in the 1960s began to enact 
legislation affirming tribal rights, strengthening tribal autonomy, and 
establishing resources to build reservation economies. The Indian Self-
Determination and Education Assistance Act of 1975 (Public Law 93-638) 
authorized ``Indian Tribes and Tribal Organizations to contract for the 
administration and operation of certain Federal programs which provide 
services to Indian Tribes and their members.'' \22\ Subsequently, many 
tribes moved to self-governance and assumed full responsibility for the 
design and implementation of their programs without federal oversight.
    In 1996, Congress moved to explicitly address the intersection of 
tribal sovereignty and housing. The Native American Housing and Self-
Determination Act (NAHASDA) \23\ recognized the rights of tribal self-
governance and encouraged expansion of reservation housing options by 
allowing NAHASDA-allocated funds to be leveraged for new home 
construction. To further encourage homeownership opportunities, 
Congress enacted the Helping Expedite and Advance Responsible Tribal 
Homeownership (HEARTH) Act of 2012. \24\ The HEARTH Act was designed 
specifically to enhance self-governance over tribal lands and promote 
the efficient leasing of those lands for housing and business purposes. 
To exercise this authority, tribes must first adopt leasing regulations 
and submit them for approval to the BIA. This review process has itself 
become a bureaucratic hurdle to the development of trust lands. 
Currently, 26 tribal residential leasing regulation applications are 
awaiting BIA approval; only three tribal leasing regulations have been 
approved in FY19. \25\
    Several federal programs support mortgage lending to Native 
borrowers. \26\ These include the HUD Section 184 Home Loan Guarantee 
program (the Section 184 program), the Veterans Affairs Native American 
Direct Loan program (VA NADL), and the Department of Agriculture Rural 
Development Rural Housing Service 502 Direct Loan program (RHS 502). 
Collectively these programs have billions of dollars in loan authority. 
Sadly, not much of these funds and resources are reaching Indian 
Country, even when programs are designed specifically for AIAN 
borrowers. To deploy this enormous capital opportunity in Indian 
Country, we must have a normalized and complementary inter-agency 
lending process in Indian Country.
    The HUD Section 184 program was established in 1992 with the 
specific mission of facilitating homeownership and increasing access to 
capital in Native communities. HUD describes the Section 184 as 
``synonymous with home ownership in Indian Country.'' \27\ The Section 
184 program has greatly expanded the supply of mortgage credit to 
Native borrowers by mitigating private lender risks. It provides 
lenders with a 100 percent guarantee for mortgages to Native borrowers, 
thus eliminating concerns related to the collateralization of trust 
land. In addition, its utility for new construction as well as existing 
homes, low down payments, low interest rates, and protection from 
predatory lending make the Section 184 program a very popular funding 
option for Native borrowers.

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    While the Section 184 program has expanded access to mortgage 
finance for Native borrowers of all income levels, it has largely 
bypassed reservations. Only 7 percent of 184 program capital funded 
homes were on reservations in recent years, resulting in billions of 
dollars of federally guaranteed funds supporting communities outside of 
Indian Country. See Figure 1. Other federal programs that support 
mortgage lending on trust lands, the RHS 502 and the VA NADL programs, 
also are woefully underutilized on trust lands.
    The VA NADL program is meant to serve Native veterans on 
reservation lands. \28\ The program is similar to the VA standard home 
loan, offering favorable terms such as no down payment requirement and 
low interest rates. Today, American Indians, Alaska Natives, and Native 
Hawaiians serve in the military at one of the highest rates per capita 
of all population groups: 133,000 veterans identify as Native. 
Currently, there is a potential NADL-eligible population of 20,013 
Native veterans who reside on trust land. However, between 2013 and 
2015, the NADL program originated an average of 21 loans annually (the 
height of lending was 2003 with 120 loans and 2010 with 103 loans). It 
is noteworthy that most of these loans are made in Hawaii and the 
Pacific Island territories. This disproportionate use of the program 
outside of the lower 48 is possibly due to an established 
infrastructure in Hawaii for veteran benefits.
    The RHS 502 program offers a path to homeownership for low- and 
very-low-income families living in eligible rural areas, home to most 
of Indian Country. Rural Development's webpage notes, ``Providing these 
affordable homeownership opportunities promotes prosperity, which in 
turn creates thriving communities and improves the quality of life in 
rural areas.''
    Rural Development invested more than $6.2 billion in Indian Country 
between 2001 and 2018. \29\ About half of those funds, $3 billion, were 
invested through the Rural Housing and Community Facilities programs 
for much-needed facilities such as community and senior centers, 
hospitals and clinics, schools and food distribution centers. However, 
of the 6,575 loans made through this program in 2014, only seven were 
to Native borrowers on tribal lands. As with the other federal 
programs, we need to ensure that Rural Development programs and 
resources are responsive to the current housing needs of tribes and 
tribal members on rural trust lands.
    These powerful financial tools, established to help a most 
deserving population, are not reaching Native borrowers on trust land. 
To address problems underlying this system failure, the lending 
infrastructures in federal agencies that support the mortgage process 
must be normalized. They must follow a standard streamlined process, 
similar to ``one stop''-type \30\ model mortgage loan program, which 
can rely on a 30-day Title Status Report (TSR) turnaround from the BIA. 
They also needs trusted lending partners and program supports to reach 
Native borrowers in areas far from the lenders. Partnerships with 
Native Community Development Financial Institutions (CDFIs) and tribal 
housing entities are also important to connect the funds with 
institutions that understand the homeownership process in Indian 
Country. These partnerships could transform Indian Country.
    Experienced Native CDFIs and tribally owned financial institutions, 
such as banks and credit unions, \31\ provide much-needed credit 
building services and mortgage products to Native borrowers. These 
Native CDFIs are perfect partners to connect Indian Country with 
federal home loan programs, but their services are limited only by the 
amount of funding they have available.
    For example, on the Pine Ridge reservation in South Dakota, Lakota 
Funds, the first Native CDFI, and Mazaska Owecaso Otipi Financial, 
offer affordable housing loans as well as home buyer and financial 
education. In the summer of 2019, they and the Four Bands CDFI on the 
Cheyenne River Sioux reservation were approved as re-lending 
intermediaries for the USDA 502 program. Loans to these Native CDFIs 
(33 years at 1 percent) will be used for housing on trust land. While 
USDA has struggled to connect 502 money with Native homeowners on trust 
land, Native CDFIs already have steady pipelines of mortgage-ready 
borrowers and the community presence necessary for long-term 
relationships to ensure successful homeownership.
    Then, there are state-based initiatives, such as the New Mexico 
Tribal Homeownership Coalition and the South Dakota Native 
Homeownership Coalition. They, along with broader associations that 
provide technical support and advocacy such as the National American 
Indian Housing Council and CICD's National Native Homeownership 
Coalition, support a systems approach to shoring up the professional 
staff needed to plan, finance, and build homes in Indian Country. These 
local and regional coalitions are establishing important networks to 
support a well-functioning housing market, that includes contractors, 
inspectors, and appraisers.
Challenges to Mortgage Lending on Trust Lands
Making HUD 184 Work on Trust Lands
    Despite the lack of any legal impediment to mortgage lending on 
trust lands, tribes and Native people continue to be unduly hindered in 
using their lands for good and productive purposes. Indeed, obstacles 
to effective use of trust lands for housing purposes remain severe and 
troubling.
    For example, the large majority of mortgages to Native borrowers 
under the Section 184 program are now on fee land. \32\ This is due in 
large part to the rapid expansion of the program in 2004 to off-
reservation areas following a lengthy period of little or no tribal 
implementation of the program. \33\ The number of Section184 mortgages 
made annually on trust land typically is in the low hundreds and has 
shown no sustained growth since the early 2000s. \34\ Because Section 
184 loans have federal guarantees and present no risk to the lender, 
their limited use on trust land reflects impediments other than 
borrowers' creditworthiness or other financial characteristics.
    While the BIA is making good efforts to streamline its mortgage 
process, \35\ institutional systems complicate the full utilization of 
the Section 184 and other federal mortgage programs on trust lands. 
These include an elaborate review process, bureaucratic delays, and the 
complexity of lending to low- and moderate-income borrowers. Holders of 
trust land must use a leasehold interest as collateral, which requires 
the tribe to issue a leasehold interest to the borrower, who then uses 
that interest as collateral. These transactions require two certified 
title status reports (TSRs) from the BIA and various federal 
environmental reviews and appraisals, which cumulatively result in a 
lengthy and involved process. \36\ In a recent HUD-sponsored survey of 
lenders, ``mortgage lending on tribal trust land remains a time-
consuming process that reduces the appeal of lending on tribal trust 
land, even with the federal guarantee. Lenders report that Section 184 
Program loans can take up to 6 to 8 months to process and close; in 
some cases, it can take even longer.'' \37\ (A chart illustrating the 
Bureau of Indian Affairs Mortgage Package Business Process is 
attached.)
    These transactions are recorded in the BIA's Trust Assets and 
Accounting Management System (TAAMS) to track and record title on trust 
lands. The TAAMS system, designed to manage probate estates and 
payments of income from trust property, also includes property maps. It 
was not designed to function as a national recording system for real 
estate transactions on reservation lands. Nor is it publicly accessible 
like county property records. Moreover, because different areas of the 
BIA manage different information in TAAMS, it can become excessively 
difficult to issue the required real property records and TSR 
certifications. One immediate way to address the bottleneck is to 
provide HUD and tribes access to TAAMS, including certification for 
designated tribal individual users.
    The continued difficulty of mortgage lending on trust land is 
suggested by both Figure 1 and the BIA mortgage package process 
(attached).
The High Price of Mortgage Financing for Native Americans
    Access to affordable capital has been a constant challenge for 
aspiring Native American homeowners. However, new CICD research shows 
that mortgage loans with Native Americans as the primary borrower are 
also systematically more likely to be higher-priced. \38\ Thus, even 
when private capital manages to reach Native borrowers in Indian 
Country, they may pay an unjustifiably high premium that greatly 
diminishes the possibility of accumulating equity and building wealth.
    Using public data from the Home Mortgage Disclosure Act (HMDA), 
\39\ the CICD study examined first-lien home purchase loans with 
attention to ``higher-priced loans.'' The term ``higher-priced'' is 
defined in the data set as loans that have a rate greater than or equal 
to 1.5 percentage points above the Average Prime Offer Rate (APOR), and 
the rate spread of loans conditional on them being higher-priced, 
referring to the difference in percentage points from the APOR for a 
given loan. We wanted to know the answer to two questions: (1) What 
proportion of Native American loans are ``higher-priced,'' and (2) What 
is the rate spread of those loans?
    The CICD's findings show that loans with Native Americans as the 
primary borrower have an average interest rate nearly 2 percentage 
points above the average loan for non-Native Americans. These higher-
priced home loans are found predominately on reservation lands. Around 
30 percent of mortgages for Natives on-reservation were high-priced, 
compared to only 10 percent for non-Natives near reservations (see 
Figure 2, Proportion of High-Priced Loans On and Near Reservations). 
Native Americans burdened with high-cost mortgages had the highest 
average rate spread of any group in the U.S. For Native Americans on 
reservations with high-priced loans, the average spread in 2016 was 5 
points above APOR. As an example, a Native American on-reservation with 
a higher-priced loan buying an average-priced home in 2016 could pay 
roughly $107,000 more in interest for a 30-year mortgage than a non-
Native borrower off the reservation.

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    In the context of the high price of mortgage financing for Native 
Americans on trust land, it must be noted that Native buyers tend 
toward manufactured housing--and loans for manufactured housing often 
come with high-priced financing. The CICD analyzed HMDA data from 
2004--2016 and found that Native Americans were far more likely to 
apply for manufactured housing loans across the U.S., but especially on 
reservations. \40\ For example, in 2016, over 75 percent of home loan 
applications by Native borrowers on reservations were for manufactured 
homes. By comparison, only 5.1 percent of all home loan applications in 
the U.S. for the same year were for manufactured homes. \41\ The data 
also showed that Native applicants had much higher denial rates for 
manufactured-home loan applications than for site built homes. For 
example, in 2015--2016, about 75 percent of applications for 
manufactured-home loans from Native borrowers on the reservation were 
denied.

GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The prevalence of manufactured housing on trust lands may derive 
from the difficulties Native borrowers face in trying to finance site-
built homes on their homelands. When purchasing a manufactured home, 
buyers may finance their home as personal property, a chattel mortgage 
similar to an auto loan, rather than as real property as in a typical 
mortgage. In so doing, borrowers may circumvent some of the delays 
associated with building on trust land. The simplicity of this 
financing, however, comes with a high price, may be subject to captive 
financing, and may place additional risk on the borrower. The CICD 
study on high-priced financing found that the prevalence of 
manufactured housing on reservation lands accounts for 25-35 percent of 
Native borrowers' higher cost of financing. Another CICD study shows 
that 67 percent of manufactured home loans to Native Americans were 
made by only two companies. \42\ When Native borrowers purchase a 
manufactured home as personal--rather than real--property, they risk 
owning a less stable asset (the home alone) relative to traditional 
mortgage-holders, whose property value is tied both to their home and 
the land underneath it. While manufactured housing can offer less 
expensive construction and upfront costs, the higher interest rates, 
and denial rates--along with the potential for captive financing--raise 
serious concerns about the current use of manufactured housing in 
Indian Country. \43\
Opening Doors to Homeownership in Indian Country through Tribal Self-
        Governance
    Several tribes and tribal housing authorities have created 
successful homeownership programs on trust lands by asserting self-
governance over land leasing and titling processes. They also have 
developed internal capacity to manage complex financing arrangements 
and implement large-scale housing development. In doing so, they have 
demonstrated to their communities and to the rest of Indian Country the 
powerful impact of making affordable credit available to Native 
borrowers and creating an efficient lending process.
    In the southwest, the San Felipe Pueblo of New Mexico built the 
Black Mesa View subdivision in the heart of its community and created 
full service home building, housing preservation, and related 
businesses that employ a wide range of workers and create opportunities 
to develop a skilled tribal workforce. \44\ Employment from 
construction projects created a wide ripple effect as jobs were created 
over other sectors of the community, including manufacturing, retail, 
and business services.
    In Montana, the Confederated Salish and Kootenai Tribes of the 
Flathead Reservation established a tribal land office that assumes much 
of the BIA's lease processing and title work. The Tribes' housing 
program helps borrowers throughout the reservation become homebuyer 
ready and complete the mortgage process efficiently, while building up 
a dedicated and skilled tribal workforce in the process. \45\ 
Meanwhile, tribally-owned Eagle Bank provides a ready source of capital 
for mortgages at competitive interest rates. Overall, the Salish and 
Kootenai are building a dynamic housing market that attracts a skilled 
and educated workforce.
    On the high plains, the Cheyenne River Sioux Tribal Housing 
Authority has an ambitious 400-unit housing development project 
underway on tribal lands in Eagle Butte, South Dakota. When completed, 
Badger Park will offer an array of design options and affordable price 
points, mainly using factory-built construction. Financing for this 
impressive project is multi-layered and complex. Designing and 
executing construction plans required years of careful work, starting 
with a comprehensive community needs assessment. \46\ Their patience 
and diligence paid off. More than a dozen families moved into these 
homes last spring, and scores more will be homeowners by the end of the 
year. The economic impact on the community emanating from this housing 
development is exponential, with increased demand for local goods and 
services, such as groceries and gas, and access to community amenities, 
such as schools and financial services.
    In the Midwest, the Ho-Chunk Nation of Wisconsin effectively 
implemented the HEARTH Act and now provides land, leasing, title, and 
realty services within the boundaries of its 15,000-acre reservation, 
comprised mostly of trust lands. \47\ In addition, Bay Bank, owned by 
the Oneida Nation in Wisconsin, supports a sizable HUD Section 184 
mortgage portfolio for Native borrowers across the northern Midwest 
region.
    The success of these tribes and the achievements of several others 
is illustrated in Figure 4, which shows by state the total number of 
HUD Section 184 mortgages from 1995 to 2015, and the percentage of 
those mortgages on trust land. Montana and Wisconsin are among the 
small group of states that rank at least moderately high in both 
important metrics, demonstrating that mortgage lending on trust land is 
viable if fully engaged with existing laws and programs.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    What is strikingly important is that all of these projects are 
being accomplished under the mantle of tribal self-determination and 
self-governance, producing models of success for all tribes. Additional 
case studies are explored in the CICD's Tribal Leaders Handbook on 
Homeownership.
Policy Considerations
    Bringing housing and homeownership opportunities to all of Indian 
Country requires capacity, commitment, creativity, and collaboration. 
To do this, we need a multifaceted approach to normalize lending on 
trust lands, leverage billions of dollars or federal funding, and 
generate broad reservation-based economic development. Here are some 
suggestions:
1. Focus on trust land
    CICD research has shown that most of the public resources for 
mortgage finance to Native households are being utilized on fee simple 
lands. Lender surveys suggest that the additional complexity of lending 
on trust land depresses the availability of credit and capital for home 
loans. The barriers to building housing or otherwise leveraging 
opportunities on trust lands limit Native people's ability to live 
wherever they chose and to pursue meaningful economic development 
strategies in their communities.
    Addressing the issues with trust land homeownership will require 
coordination and collaboration across the multiple federal agencies 
that assist Indian Country with homeownership. In order to maintain 
this focus, better data practices are needed to identify and map high-
needs rural areas and persistent poverty counties, and overlay them 
with high Native populations on or near trust land. The Department of 
the Interior should provide tribes with current, accurate, and easily 
accessible information about their trust lands, along with data on land 
ownership and encumbrances (including rights of way).I772. Modernize 
the lending process on trust land
    Streamlined processes and reliable data are key components of a 
modern and efficient lending system on trust lands. To better 
understand housing needs and determine whether these programs are being 
put to good use in Indian Country, lenders and tribes both need access 
to data on a timely basis and in a transparent manner. Requests for 
updated data often go unheeded, even though the data are generally 
available and sharing is not burdensome. Furthermore, data sharing, 
analysis, and reporting are critical to allocating scarce resources and 
holding federal programs and private lenders accountable to 
constituents.
    Additionally, the BIA lending system must be streamlined to meet 
the market demand from Indian Country. This includes reform of the BIA 
title, lease, and land records processes to conducting environmental 
reviews on trust lands. The importance of well-trained and responsive 
BIA and tribal staff cannot be underestimated--they are essential to 
supporting an efficient lending process in Indian Country. \48\ But 
their apparent priorities do not seem congruent with the pressing need 
for supporting more housing development. Many tribes, tribal housing 
authorities, and other housing developers have yet to utilize the full 
potential of their programs for housing development on trust land. 
Consequently, every year millions of federal funds fail to reach Indian 
Country. Thus, modernizing the lending process requires a laser-focus 
on tribal selfgovernance and land development tools such as the HEARTH 
Act and private sector financing.I773. Expand access to capital and 
credit in Indian Country: increase funding and technical assistance for 
Native CDFIs
    As conventional lenders retreat, Native CDFIs are emerging as 
critical sources of capital. With local presences and professionals 
experienced in Indian Country, Native CDFIs are wellpositioned to 
service private mortgages, federal direct loans, and federal mortgage 
guarantees. Native CDFIs also can be started with a much lower barrier 
to entry than banks and even credit unions, and so are easier to access 
as vehicles for credit on reservations while also providing essential 
services like small business loans and, in some cases, depository 
accounts.
    In 2017, the CICD and the Minneapolis Fed's Community Development 
Department, with help from the Native CDFI Network and First Nations 
Oweesta Corporation, surveyed certified Native CDFIs across the U.S. 
about their programs and funding. Findings from this study suggest 
there are large unmet lending opportunities in the industry. \49\ When 
asked about what prevents their organization from providing programs 
and services, respondents overwhelmingly cited limited financial 
resources as the leading factor. The estimated additional amount needed 
to meet Native CDFI funding needs in 2017 was around $96 million. These 
additional funds would be used primarily to expand existing services, 
but also to expand into new services or new service areas (staff and 
capital). This includes technical assistance in becoming certified 
relenders and sellers of mortgages to Fannie Mae.
    Actions to support Native CDFIs with capital and technical support 
will be vital to expanding homeownership in Indian Country.I774. Use 
innovative loan products.
    Access to capital includes having funds to loan and also the 
ability to maintain liquidity. This is even more critical for community 
lenders who provide services to high-need markets, such as Indian 
Country. Federal agencies and lending institutions should explore a 
wide range of capital and investment opportunities that support Native 
homeownership. The USDA Rural Development pilot program in South Dakota 
using Native CDFIs as re-lenders of the Section 502 direct home loans 
on trust land demonstrates the capacity and opportunity for growth of 
the loan program and the Native CDFI.I775. Support investment pools and 
secondary markets.
    Indian Country also could benefit from innovative solutions that 
address lenders' concerns about risk and to shore up capital for 
investment needs. On the mortgage lending side, First Nations Oweesta 
Corporation is becoming a national capital pool for Native CDFIs. 
Another possibility is pooling leasehold mortgages as a way to offer 
investment-quality mortgage-backed securities to a wide range of 
investors. On the risk side, the Sisseton Wahpeton Tribe in South 
Dakota has established a risk mitigation pool to reduce the liquidation 
risk of mortgage lenders operating on trust land, even as the Tribe 
supports to maintain heir homes and credit.
    Access to secondary markets is essential to create liquidity and 
keep capital circulating for more mortgage lending. Loan products such 
as Fannie Mae's Native American Conventional Lending Initiative single-
family loan program provide an important mechanism for community banks, 
credit unions, and Native CDFIs. It helps to deploy conforming 
conventional loans that can be readily sold on the secondary market 
pursuant to a tri-party agreement between Fannie Mae, the tribe, and 
the lender. This type of arrangement is a useful model for other 
lenders to consider because it provides a structure that ensures 
efficiency of funding, suitable loan servicing, and appropriate 
remedies, all of which support better systems for tribes.
Opening Doors to Homeownership in Indian Country
    Indian Country's growing population, positive economic growth, and 
increasing demand for homeownership present a momentous opportunity for 
tribal communities, lenders, and the United States. Innovative tribes 
and lenders are already finding a way to expand housing and 
homeownership opportunities in Indian Country despite generations of 
economic deficits, lagging infrastructure investments, and heavy 
bureaucratic burdens. They are re-establishing a connection to the land 
and igniting the engines of economic self-sufficiency. Indeed, today's 
tribal leaders are framing their efforts with community-determined 
goals and designing new paths forward to lift and support their people.
    We need to recognize and support these efforts, and foster this 
forward momentum. This means tackling the procedural barriers head on, 
ensuring access to capital at fair rates, and creating more housing 
options on trust lands. Opening the door to homeownership also means 
instilling hope for future generations of Native communities and 
families. This work--bringing new resources and ideas into action in 
Indian Country--requires many hands. It can be done only through 
partnerships, collaborations, and community commitments.
    ENDNOTES
     \1\ See Listokin, David et al., Mortgage Lending on Tribal Land: A 
Report from the Assessment of American Indian, Alaska Native, and 
Native Hawaiian Housing Needs, U. S. Department of Housing and Urban 
Development, December 2016 (hereafter Mortgage Lending on Tribal Land 
Report). ``Actual'' homeownership here refers to non-rental status.
     \2\ Feir, Donna. The Higher Price of Mortgage Financing for Native 
Americans, CICD Working Paper 2019-06 (2019) (hereafter Higher Price 
Mortgage Financing for Native Americans).
     \3\ See the Center for Indian Country Development website for 
research paper and research resources, including the Tribal Leaders 
Handbook on Homeownership (2018) (hereafter TLHH). The CICD published 
the TLHH as a comprehensive guide to the mortgage lending process in 
Indian Country and a resource for addressing challenges to 
homeownership. It includes ``best practice'' case studies illustrating 
how tribes overcame financial and institutional obstacles through 
innovation and perseverance to create homeownership in their 
communities.
     \4\ For a thorough discussion on the history of and contemporary 
issues facing mortgages on trust land, see Davila, Christina, and Keith 
Wiley, Exploring the Challenges and Opportunities for Mortgage Finance 
in Indian Country, Housing Assistance Council, Washington, D.C., 2018.
     \5\ Federally recognized American Indian tribes and Alaska Native 
villages have a government-togovernment relationship with the United 
States and possess inherent rights of self-government (i.e., tribal 
sovereignty). Because of this political relationship, the federal 
government has a general trust obligation to promote the welfare of 
Native peoples by providing housing, health care, and other services on 
reservations and tribal areas.
     \6\ Trust lands are tribal lands held by the federal government in 
trust for the use and benefit of tribes and Native people, most of 
which are located within reservations. Trust lands may not be 
encumbered or conveyed without the consent of the federal government.
     \7\ As used herein, the term Native people will be used 
interchangeably with the U.S. Census category of American Indian and 
Alaska Native (AIAN).
     \8\ From 2000 to 2010, the growth rate for the total AIAN 
population in tribal areas was 12 percent. See Pindus, Nancy, G. Thomas 
Kingsley, Jennifer Biess, Diane Levy, Jasmine Simington, and 
Christopher Hayes, Housing Needs of American Indians and Alaska Natives 
in Tribal Areas: A Report from the Assessment of American Indian, 
Alaska Native, and Native Hawaiian Housing Needs, U.S. Department of 
Housing and Urban Development, Office of Policy Development and 
Research, January 2017 at 15-18 (hereafter HUD Tribal Area Study). The 
U.S. Census Bureau forecasts continued growth rates for the AIAN 
population, projecting a rise in the AIAN-alone population to about 4.2 
million people by 2030. See Pettit, Kathryn L.S., G. Thomas Kingsley, 
Jennifer Biess, Kassie Bertumen, Nancy Pindus, Chris Narducci, Amos 
Budde. Continuity and Change: Demographic, Socioeconomic, and Housing 
Condition of American Indian and Alaska Natives. U.S. Department of 
Housing and Urban Development, Office of Policy Development and 
Research, Jan. 2014, at 8.
     \9\ HUD Tribal Area Study at 10. This report studied ``tribal 
areas,'' as used by the U.S. Census Bureau, which generally includes 
Indian reservations and counties that encompass or surround them.
     \10\ For a more thorough discussion of the problems of 
overcrowdedness in Indian Country, see: Overcrowded Housing and the 
Impacts on American Indians and Alaska Natives. Field Hearing before 
the U.S. Senate Committee on Indian Affairs, S. Hrg. 115-404, August 
25, 2018.
     \11\ HUD Tribal Area Study, Exhibit ES.3, at XXI.
     \12\ National data on Native communities is aggregated and 
reported as generalized observations, lacking much contextual 
information at the tribal level. To better understand the needs and 
assets of their communities, several American Indian tribes have 
undertaken tribe-specific community assessments, including a more 
accurate reservation census count, the number of habitable housing 
units, and a survey of housing needs.
     \13\ Taylor, Lauren A., Housing and Health: An Overview of the 
Literature, Health Affairs Health Policy Brief, Jun. 7, 2018.
     \14\ HUD Tribal Area Study at 86.
     \15\ (a) ``Housing Needs and Homeownership Study,'' Yankton Sioux 
Tribe and Big Water Consulting, June 2019; (b) ``Housing Needs and 
Homeownership Study,'' Standing Rock Community Development Corporation 
and Big Water Consulting, June 2019; (c) Case Study: Housing Needs 
Study, Cheyenne River Housing Authority, Eagle Butte, South Dakota, 
TLHH at 48 (hereafter Housing Needs Case Study); (d) Model Housing 
Needs Assessments, TLHH Appendix at 141.
     \16\ Kunesh, Patrice H., Creating Sustainable Homelands through 
Homeownership on Trust Lands, in ``Meeting Native American Housing 
Needs,'' Rural Voices, Housing Assistance Council, Washington, D.C., 
Fall 2017.
     \17\ (a) Akee, Randall K. Q., Katherine A. Spilde, Jonathan B. 
Taylor, The Indian Gaming Regulatory Act and Its Effects on American 
Indian Economic Development, Journal of Economic Perspectives 2015 v. 
29, 185-208; (b) Akee, Randall K. Q., Maggie R. Jones, Sonya R. Porter. 
Race Matters: Income Shares, Income Inequality, and Income Mobility for 
All U.S. Races. Demography 2019 v. 56, 999-1021.
     \18\ The modest increase was $9,650 in 1990 to $14,355 in 2018 (a 
48 percent increase, compared to a 9 percent increase for all 
Americans).
     \19\ Akee, Randall K. Q., William E. Copeland, Gordon Keeler, 
Adrian Angold, E. Jane Costello. Parents' Incomes and Children's 
Outcomes: A Quasi-Experiment Using Transfer Payments from Casino 
Profits. American Economic Journal: Applied Economics 2010 v. 2: 86-
115.
     \20\ Feir, Donna, The Landscape of Opportunity in Indian Country: 
A Discussion of Data from the Opportunity Atlas. CICD Working Paper 
2019-03 (2019).
     \21\ Feir notes that this is exploratory research and the findings 
are nuanced depending on the particular unit of observation (census 
tracts versus tribal statistical areas). This study seeks to ascertain 
the experiences on census tracts covered by tribal statistical areas, 
which approximate American Indian reservations.
     \22\ Indian Self-Determination and Education Assistance Act of 
1975. Public Law 93-638. 88 Stat. 2203-2217, Jan. 4, 1975.
     \23\ Native American Housing Assistance and Self-Determination Act 
of 1996. Public Law 104- 330. 110 Stat. 4016-4052, Oct. 26, 1996.
     \24\ The HEARTH Act of 2012, Public Law 112-151, which creates a 
voluntary, alternative land leasing process available to tribes, 
amended the Indian Long-Term Leasing Act of 1955, 25 U.S.C. Sec. 415 
(July 30, 2012).
     \25\ CICD staff conversation with Sharlene Round Face and David 
Moran, U.S. Department of the Interior Bureau of Indian Affairs HEARTH 
Act Training, Sept. 4, 2019, Albuquerque, New Mexico.
     \26\ A list of Federal Mortgage Programs for Native Americans is 
attached.
     \27\ U.S. Department of Housing and Urban Development Section 184 
Indian Home Loan Guarantee Program. https://www.hud.gov/section184, 
accessed Oct. 9, 2019.
     \28\ The NADL program, which began in 1992, focuses on assisting 
veterans who live on federal reservation lands, Alaska Native villages, 
and Hawaiian Homelands. The NADL program differs from the standard VA 
loan in a fundamental way--it is not a guarantee made by private 
lenders, but a direct loan made by the VA. The NADL requires that 
tribes establish memoranda of understanding (MOU) with the VA that 
delineate how the program operates and the responsibilities of both the 
tribe and the federal government, including the process to 
collateralize the loan on trust land.
     \29\ See ``Collaborating for Prosperity With American Indians and 
Alaska Natives Rural Development Programs for Tribes, Tribal Families, 
Children, and Communities,'' USDA Rural Development Innovation Center 
(2018). https://www.rd.usda.gov/files/508_RD_TribalReport_2019.pdf
     \30\ U.S. Department of Housing and Urban Development and U.S. 
Department of the Treasury. 2000. One-Stop Mortgage Center Initiative 
in Indian Country: A Report to the President. Washington, DC: U.S. 
Department of the Treasury.
     \31\ For a full list of Native American financial institutions and 
the scale and scope of their assets, see Mapping Native American 
Financial Institutions, a dynamic map of Native owned banks, credit 
unions, and community development institutions.
     \32\ HUD Tribal Area Study at 86.
     \33\ Mortgage Lending on Tribal Land at 10.
     \34\ Analysis of data provided by HUD conducted by Center for 
Indian Country Development staff.
     \35\ For instance, the BIA recently released a mortgage handbook 
to delineate its review and approval process. U.S. Department of the 
Interior, Bureau of Indian Affairs, Division of Real Estate Services, 
52 IAM 4-H, Indian Affairs Mortgage Handbook, July 15, 2019.
     \36\ Along with the leasehold (similar to owning a townhouse or 
condominium in which the land and the dwelling unit are separate 
property interests), the Bureau of Indian Affairs must approve a land 
survey and environmental review, and then issue a certified title 
status report on the property (delineates the legal description and 
encumbrances on the property). The process for obtaining a final TSR 
can be lengthy and involved. The HEARTH Act of 2012 creates an 
alternative land leasing process that encourages tribes to make their 
own decisions about leasing and leverage their lands for optimal 
development.
     \37\ Mortgage Lending on Tribal Land at viii.
     \38\ Higher Price Mortgage Financing for Native Americans.
     \39\ Home Mortgage Disclosure Act of 1975, 29 U.S.C.   2801-
2811.
     \40\ Todd, Richard M. and Kevin Johnson, Race, location, and 
manufactured-home loans on American Indian reservations, CICD Blog, 
Dec. 4, 2018.
     \41\ Todd, Richard M. Manufactured-Home Lending to American 
Indians in Indian Country Remains Highly Concentrated, CICD Blog, Dec. 
1, 2017 (hereafter Highly Concentrated Lending).
     \42\ Highly Concentrate Lending. Both of these two lenders are 
owned by Clayton Homes.
     \43\ For a more comprehensive discussion of manufactured housing 
in Indian Country, see: Manufactured Homes: An Affordable Ownership 
Option. Ch. 11, TLHH.
     \44\ Case Study: Large-Scale Tribal Subdivision Black Mesa View, 
San Felipe Pueblo, New Mexico. TLHH at 25.
     \45\ Case Study: Homebuyer Readiness Program, Salish and Kootenai 
Housing Authority, Pablo, Montana. TLHH at 57.
     \46\ Housing Needs Case Study.
     \47\ Case Study: HEARTH ACT Implementation, Ho-Chunk Nation 
Reality Division, Black River Falls, Wisconsin. TLHH at 88.
     \48\ Indian Programs: Interior Should Address Factors Hindering 
Tribal Administration of Federal Programs. U.S. Government 
Accountability Office, January 2019.
     \49\ Kokodoko, Michou, ``Findings from the 2017 Native CDFI 
Survey: Industry Opportunities and Limitations,'' CICD Working Paper 
No. 2017-04, November 2017.

    The Chairman. Again, I would like to thank all of the 
witnesses for being here. We will have five minute rounds of 
questions. I am going to start with Mr. Kurtz.
    My first question is, why do tribes need separate MOUs with 
each Federal agency that offers home loan products? Examples 
would be, you have the 184 loan MOU with HUD, but then if they 
want to do a VA loan, they need a separate MOU with VA.
    Mr. Kurtz. Not to split hairs, but we don't require an MOU 
which, in our world, is a lot more technical document. We do 
have to sort of sign off on the tribes involved with the 184 
process. But I think that is a real interesting point, to look 
at how we could standardize the certification across the 
Federal Government. That is something I am happy to look into.
    The Chairman. That is something you might be able to work 
on?
    Mr. Kurtz. Absolutely.
    The Chairman. Why is the 184 Home Loan Guarantee Program so 
underutilized on the reservation?
    Mr. Kurtz. Well, the program was designed to provide 
housing opportunities for Native Americans living anywhere, not 
just on reservations or trust land. But we are going through a 
rulemaking process right now to try to reduce some of the 
regulations in the 184 program to bring them up to industry 
standards. In that process, we are looking at ways we can 
increase the amount of loans on trust lands. But we also always 
have to sort of walk a fine line here, because there are some 
areas of the Country that don't have any trust lands, such as 
Oklahoma or Alaska. So it is always a bit of a fine line about 
how we go about doing that.
    The Chairman. What are your priorities in this new post?
    Mr. Kurtz. I have three main priorities in sort of 
everything I do. I call them my three Ps, it is people, 
programs and properties. Trying to help the people, that is why 
I work in the affordable housing industry. Providing someone 
with a home is, in my mind, one of the easiest ways we can help 
people.
    Our programs, how we can reform, make our programs better 
and more streamlined, and how we can give more local control. 
As I said in my testimony, what works in Detroit, which I could 
go on about for hours about, it doesn't mean it works 
everywhere else in the Country, and how we get our programs to 
work well. And then properties, involve how do we provide 
people with decent, safe and affordable housing? I honestly 
think one of the things we are doing that encompasses all three 
is the reforms to the 184 program, as well as our competitive 
program for the Indian Housing Block Grant Program.
    The Chairman. Do you think we should have a separate Indian 
Housing Program, separate from the Public Housing Program?
    Mr. Kurtz. I do, sir. Public housing is the 800 pound 
elephant at HUD. Budget-wise, it is a massive program. We need 
to elevate the Office of Native American Programs to have the 
Assistant Secretary work fully and solely on these really 
unique and important issues that are faced by Native Americans 
across the Country.
    The Chairman. Thank you.
    Councilman Mount, how come the mortgages are higher priced 
on the reservation versus off?
    Mr. Mount. The main thing is that there are so many Federal 
impediments to getting a home loan on trust land that the 
interest goes up, it increases costs to the mortgage lenders. 
Not only that, banks also have huge misconceptions about 
lending on reservations. They are a little biased about it.
    I have one example. As a commercial loan, our tribal 
corporation, Island Mountain Development Group, they took out a 
commercial loan for a new call center. They were required to 
put 50 percent down, which was $400,000, and their interest 
rate was 16 percent.
    The Chairman. Sixteen percent, really?
    Mr. Mount. Yes. It is ridiculous. A lot of it is just 
misconception.
    The Chairman. What about a categorical exemption for 
lending on the reservation?
    Mr. Mount. Categorical exclusion?
    The Chairman. Yes.
    Mr. Mount. Oftentimes, it is really burdensome; it is 
really messy. And it is unnecessary. I also have one example 
for that, also. One of our tribal members was getting a home 
loan through the 184 process, the CEO of our corporation. He 
had to get an EPA specialist to come and say that he was not 
going to disturb any coastal land in north central Montana.
    [Laughter.]
    Mr. Mount. It is ridiculous. It is unnecessary and 
burdensome.
    The Chairman. Director LaCounte, you talked about TAAMS. 
You are getting that expedited. That is holding up some of 
these loan applications. You are going to take care of that?
    Mr. LaCounte. I am taking care of that, absolutely.
    The Chairman. You have to keep working on that. They have 
to have a streamlined process, so that is not holding up 
things.
    Mr. LaCounte. We have definitely made some major changes.
    The Chairman. You talked about it a little bit but just so 
you are staying on it. Of course, the key is at the end of all 
the things you talked about, we have streamlined the process 
and they are getting the approvals.
    Mr. LaCounte. The portal I spoke about will allow the 
tribes, HUD, anybody to get to the data without having to 
actually get into the system and go through the background 
checks and the training that is required.
    The Chairman. You went through it pretty well, but just so 
you are watching to make sure that results in the expedited 
approvals.
    Mr. LaCounte. I will do that.
    The Chairman. Because I know guys like Senator Tester are 
amazing with technology and computer systems, but guys like me 
have a little more trouble. I just want to make sure once you 
have done all that computer work, it actually gets the 
applications through the process expeditiously.
    Ms. Kunesh, how do we get some of those innovative programs 
to be used, so that people know about them out there in Indian 
Country and use them? What do we do?
    Ms. Kunesh. The Native CDFIs are everywhere and we have 
seen this in the Honorable Governor Zuni's testimony. Native 
CDFIs, I think, are really filling a void of lending in Indian 
Country. They are considered closest to the constituents. They 
know their communities, they are preparing people to be 
homeowners, not just your financial education but an 
understanding of the responsibilities of maintaining a home. 
They are originating loans; they are actually creating loan 
products that serve and meet the community needs.
    I support Native CDFIs stepping into this role and through 
the 502 program, for example, at USDA. I worked at USDA and I 
saw the billions of dollars that go out into community support 
and community building but bypassing reservations. So using 
Native CDFIs to be the re-lenders to support that lending.
    That could work for HUD, perhaps that could work for VA. 
But they are ready, willing, and a well-trained workforce. Not 
only that, but they are working with Fannie Mae, for example, 
to create a secondary market. A 30-year mortgage is a 
substantial investment not just for the borrower but a huge 
commitment for the lender. So we need a secondary market to 
sell these loans and replenish the capital in Indian Country.
    They need more capital. We did a survey of Native CDFIs a 
few years ago. The very conservative estimate at that point was 
about $48 million of unmet lending need that their constituents 
were needing. We think it is probably triple that number. So, 
more capital, more support and using them to deliver the 
programs is important.
    The Chairman. When you talk about selling those loans, are 
you talking about guaranteed or are you talking about non-
guaranteed loans?
    Ms. Kunesh. These are non-guaranteed loans. These are 
conventional loans.
    The Chairman. So that is more challenging, who could be the 
broker to sell those unguaranteed loans. How about on 
guaranteed?
    Ms. Kunesh. On guaranteed, those are, of course, the 
Federal Government guarantees those loans.
    The Chairman. But unguaranteed, give me a for instance.
    Ms. Kunesh. A conventional loan, a 30-year mortgage, Native 
CDFI, there is a wonderful example out of Maine, it is the Four 
Directions. They have a 30-year mortgage, and stacking those, 
two, three, four, ten mortgages, add up to a lot of money. They 
need to replenish not only their capital but they need to sell 
those loans, get them off their portfolio. They are being 
trained by Fannie Mae to be able to sell those loans, to be 
certified to sell those loans to Fannie Mae. That relieves them 
of the obligation.
    They may take on some servicing needs on the back end, too, 
so they are also able to create an income revenue.
    The Chairman. Thank you. Vice Chairman Udall.
    Senator Udall. Thank you, Mr. Chairman.
    Governor Zuni, the Tiwa Lending Service partners with your 
Pueblo's housing authority and other Isleta government offices 
to make the dream of homeownership a reality for tribal members 
in and around the community. It has been incredibly successful.
    You testified after only eight years in operation, Tiwa has 
a mortgage portfolio totaling $7.4 million and a zero percent 
default rate. That is truly incredible.
    As a Native CDFI, how does Tiwa accommodate the unique 
factors such as poor and no credit having a chilling effect on 
traditional mortgage lending in Indian Country?
    Mr. Zuni. That is because they had to be certified, they 
had to go to the classes, and they are really devoted. The 
people who go to Tiwa Lending, of course, they have to pass 
certain things. But because of the process, it is a shorter 
process.
    Right now I think we have 78 members in that group. They 
are really enjoying that program. They design their own homes, 
they get their own contractors, and appropriation is done quite 
quickly through the Tiwa Lending. That is why a lot of our 
tribal members now, and I am hoping other tribal members 
throughout the Nation, can go to that process. It is a very, 
very nice program for each tribe to have.
    Senator Udall. How would Isleta Pueblo's residents finance 
their home loans without Tiwa?
    Mr. Zuni. They would have to go to the HUD Program. There 
is not a mortgage company that would associate with our 
sovereign Nation. It is hard for them to go to a bank in the 
city areas to get a program because of our trust land. So it is 
very difficult for anybody to go outside unless it is a mobile 
home, which they can take away, but not a permanent home.
    Senator Udall. Director LaCounte, we just heard Governor 
Zuni describe the unique role that Tiwa Lending Services has in 
promoting and enhancing Isleta Pueblo's tribal economy, 
particularly as it relates to homeownership. And Ms. Kunesh 
testified that Native CDFIs are ``critical sources of capital 
as traditional lenders retreat from tribal economy.''
    So why has the Administration proposed to completely 
eliminate funding for the Native CDFI Program for the past 
three fiscal years?
    Mr. LaCounte. My understanding is that they believe there 
are other Federal agencies that are much more equipped to 
handle housing than the Bureau of Indian Affairs. That is my 
understanding, Senator.
    Senator Udall. But there is no doubt this is a crucial, 
crucial program. Can you commit to advocating to ensure that 
this vital funding is not on the chopping block in future 
fiscal cycles?
    Mr. LaCounte. I can commit to attempting to do that.
    Senator Udall. Good. That is what we want you to be working 
at.
    Ms. Kunesh, I was alarmed to see in the chart on page five 
of your written testimony which seems to indicate that the 
number of Section 184 loans that HUD guarantees on fee and 
trust lands has been in decline since 2016. Is that right?
    Ms. Kunesh. Yes, sir.
    Senator Udall. Can you explain how CICD arrived at this 
conclusion?
    Ms. Kunesh. We obtained data from HUD. We had data up 
through I think 2015, 2016, and then I think on Friday, we got 
additional data and were able to put together the graph. We see 
a noticeable dip in the volume of lending since 2016.
    Senator Udall. Mr. Kurtz, the CICD's chart, based on HUD's 
own data, appears to contradict your testimony that the HUD 
Section 184 program is a continuing success. Can you explain 
the drop in Section 184 lending since 2016?
    Mr. Kurtz. Since 2016, we have actually seen a 50 percent 
increase in the amount of lending in trust land. So we are 
seeing an increase after that little drop.
    Senator Udall. Since then. But it is accurate what they are 
saying here about what happened?
    Mr. Kurtz. Yes, in 2016, there was a decline, but we are 
seeing that increase. We hope that our regulations we are 
currently working on will further that increase in trust land.
    Senator Udall. So, lenders aren't leaving the market then? 
That is what we are really worried about with those kinds of 
numbers.
    Mr. Kurtz. I am sorry?
    Senator Udall. Are lenders leaving the market?
    Mr. Kurtz. I can't say for certain. I don't believe so. But 
coming from the City of Detroit, we also saw a lot of 
underserved lending in areas. It is a problem that all of us 
need to work together to try to limit its effects.
    Senator Udall. Mr. Kurtz, the Center for Indian Country 
Development examined loans that were made to tribal members for 
manufactured mobile homes, and found these loans are not only 
more prevalent among Native Americans living on trust land but 
also more costly than loans for conventional brick and mortar 
homes. A primary reason for this trend appears to be that 
mobile home loans simply take less time than a typical mortgage 
for homes built on trust lands, even though mobile homes 
depreciate in value quickly and are not as durable as 
conventional brick and mortar-built homes.
    In light of this finding, is HUD exercising oversight into 
the current use of manufactured housing in Indian Country?
    Mr. Kurtz. We do have oversight, in the sense that we need 
to ensure that manufactured housing property, that the property 
meets certain standards that are statutorily set, as well as 
any additional standards that the tribal leaders can place on 
the property. Because of the sovereignty, the tribes can place 
additional regulations, if you will, on what a property can 
look like in the 184 program.
    Senator Udall. Are you concerned with the CICD's findings 
that loans for manufactured housing come with high-priced 
financing and that this financing may be subject to captive 
financing?
    Mr. Kurtz. I was unaware of that issue, but we will 
definitely look into it.
    Senator Udall. Thank you.
    How does HUD work with lenders and borrowers to ensure that 
the borrowers receive the best possible rate for their home 
loan, and that they are not taken advantage of by the lender?
    Mr. Kurtz. We have dedicated staff that does monitoring to 
ensure that the program is working effectively. If there are 
issues, we try to address them.
    Senator Udall. Thank you, Mr. Chairman.
    The Chairman. Senator Tester.
    Senator Tester. Thank you, Mr. Chairman and Ranking Member 
Udall.
    First things first, it is good to see Tony Walters, former 
ace, crack staffer of the Indian Affairs Committee in the 
audience. It is good to have you here. He is known amongst my 
crew as the urban Magic Johnson of the hardwood.
    [Laughter.]
    Senator Tester. At any rate, Mr. Kurtz, you talked about 
Section 184 reforms, how it is going to give more local 
control. I do not want to put words in your mouth but that is 
what I heard, right?
    Mr. Kurtz. Yes.
    Senator Tester. So tell me, Nate Mount just talked about 
the fact that there is climate change, but I do not know that 
it is quite to the extent of having coastal waters in Montana 
anytime soon.
    But can you tell me how it is going to empower Native 
Americans, give them more local control so they will not have 
to jump through those kinds of silly hoops?
    Mr. Kurtz. We are looking at ways across the department to 
address some of the environmental issues that are faced by the 
programs, the environmental regulations faced by the programs.
    Senator Tester. You are part of HUD. What he talked about 
was EPA. Are you going to be able to impact that kind of stuff? 
It looks to me like somebody needs to make sure they have a 
job.
    Mr. Kurtz. It is kind of ridiculous, what we are hearing 
today.
    Senator Tester. Not kind of, it is.
    Mr. Kurtz. I am happy to look into it.
    Senator Tester. I would just hope that when you do your--
look, there are reasons for certain levels of regulations 
because of taxpayer dollars and all that, but the truth is that 
you have to stay grounded. Hopefully you will do that. I really 
do think if we can empower local tribes and hold them 
accountable, I think we will get a better result.
    Mr. Kurtz. I couldn't agree with you more, sir. I was a 
career civil servant for six years at HUD, and had the unique 
opportunity to write some rules and regulations that I had to 
implement when I was in the City of Detroit. They made a lot 
more sense when I was sitting here than they did in Detroit.
    Senator Tester. Do you work, does HUD work, or do you know 
if HUD works with many tribal CDFIs?
    Mr. Kurtz. We do. CDFIs can be lenders in the 184 program.
    Senator Tester. How prevalent is that?
    Mr. Kurtz. There are a handful. I could not tell you the 
exact number. I would have to get back to you on that.
    Senator Tester. Do you look for opportunities with tribal 
CDFIs?
    Mr. Kurtz. I don't believe we actively do, but it would 
make sense. It is something to look into.
    Senator Tester. Do you think you could do that?
    Mr. Kurtz. We definitely could look into it.
    Senator Tester. Once again, I think there is an opportunity 
to really get to a problem. Nate talked about it. Did you say 
75 to 85 percent unemployment in your neck of the woods? If you 
drove up there, you would say, am I in the inner city of 
Chicago, because the housing us really tough.
    Nate, Ft. Belknap I think became the first Montana tribe to 
submit a tribal leasing regulation for BIA approval. Is that 
correct?
    Mr. Mount. Yes.
    Senator Tester. When did you do that?
    Mr. Mount. We did it in September of this year.
    Senator Tester. So it has been a month?
    Mr. Mount. Yes.
    Senator Tester. Have you heard anything back from BIA?
    Mr. Mount. This morning we spoke with one of the 
solicitors, Mr. Dave Moran. He assured us that the process will 
be streamlined, but we are really concerned because we do have 
a backlog.
    Senator Tester. Did he tell you when he was going to get 
back with a response saying yea or nay?
    Mr. Mount. He didn't give us an exact date, no. He said it 
would be within the 120-day timeframe, but there is a backlog 
there.
    Senator Tester. Darryl, you knew this was coming. What can 
you add to this conversation about getting this approved, which 
will enable Ft. Belknap to execute and approve individual 
rental leases?
    Mr. LaCounte. What I have witnessed and seen since I got to 
D.C., Senator, is that although I am not an advocate of 
centralizing any programs, I am centralizing the HEARTH Act 
approvals. Because as he requested in his testimony, not 
knowing that I was doing that, I am looking for that same 
person, that HEARTH czar that knows the system.
    I will also add that the solicitor's office has committed 
to me in the past two weeks that they will add another 
solicitor besides Mr. Moran, whom he just mentioned. We are 
definitely addressing it.
    Senator Tester. So I got it. In order to have a good 
centralized system, you have to have continuity of employment. 
I don't need to tell you about BIA's lack of continuity in 
employment. I don't know how many people you have worked with, 
Nate, but it is probably more than five, maybe more than I have 
fingers, actually.
    That is a real problem and a real frustration. Can I get 
some sort of commitment from you, Darryl, you will see that 
they get their approval ASAP?
    Mr. LaCounte. Certainly.
    Senator Tester. That is good.
    Mr. LaCounte. We are going to address the hurdles that are 
there.
    Senator Tester. I have one more and then I am going to turn 
it over. You talked about the Enterprise Data Management System 
and how this is going to bring TAAMS and other fragmented 
databases into one. How close are you to having that to 
reality? I think it is a great idea and I applaud the effort. I 
think the Chairman said the same thing. How close is it to 
reality?
    Mr. LaCounte. It is within a year.
    Senator Tester. Within a year?
    Mr. LaCounte. Yes.
    Senator Tester. So when we have this hearing next year, it 
will be done and people like HUD, the staff they want, and the 
local tribes can get access to that database?
    Mr. LaCounte. The portal itself should be within a month, 
the portal to get to the TAAMS data. But the bigger database 
that incorporates other systems is not ready.
    Senator Tester. They will have access to TAAMS within a 
month?
    Mr. LaCounte. Access to the data in TAAMS.
    Senator Tester. In TAAMS?
    Mr. LaCounte. In TAAMS.
    Senator Tester. That is cool.
    Mr. LaCounte. Let me rephrase.
    Senator Tester. They will get back to me if they do not 
have access.
    Mr. LaCounte. I had better give myself two months.
    [laughter.]
    Senator Tester. Okay, you have 60 days. That sounds good.
    Thank you very much. I appreciate all your testimony. Tell 
Neel Kashkari hello.
    The Chairman. Senator Schatz.

                STATEMENT OF HON. BRIAN SCHATZ, 
                    U.S. SENATOR FROM HAWAII

    Senator Schatz. Thank you, Mr. Chairman. Thank you to all 
the testifiers.
    Governor, thank you for being here. I am going to start 
with you. Talk to me a little bit about the process of becoming 
a CDFI. How long did it take, how hard was it, how much 
organizational capacity, manpower, person power did you need?
    Mr. Zuni. They started that in 2009. We finally got it 
approved in 2013 if I remember correctly. It was about a three 
to four year process.
    Senator Schatz. I assume you are talking to other tribal 
leaders. Is that similar in terms of how long it takes to 
accomplish?
    Mr. Zuni. Yes, to get the funding and everything done and 
CDFI certification.
    Senator Schatz. I do not want to lose this opportunity for 
you to tell us how we can help these individuals from the 
Executive Branch to expedite this process because we have 60-
odd Native CDFIs, 3 in Hawaii, but we have 500-plus tribes and 
Native organizations. If this ends up being the solution 
because the private lenders are skittish about being in this 
market, then we need to do a lot better than 60. We really need 
to scale this up and make it workable. Because you are a well-
organized tribe, well led, you are able to kind of plow through 
the bureaucratic morass.
    My question is, how can we make it quicker and how can we 
ask these people to make it quicker?
    Mr. Zuni. Of course the help through you, to expedite it by 
changing the policies or whatever you can, and working with the 
BIA and HUD to eliminate some of these obstacles that we face.
    Senator Schatz. Mr. Kurtz, what do we need to do about 
this? I don't believe most of this is required by statute. I 
just think this is a regulatory thicket that has sort of 
emerged over many, many years. And in your defense, CDFI, when 
we developed the statutes, including those that govern the 
agencies that you are in charge of, we didn't anticipate this 
solution to kind of emerge. But now that it has, what do we do 
about making a CDFI like a 18-month process or a 12-month 
process and not a labyrinth that has to be navigated?
    Mr. Kurtz. The CDFIs are managed at the Treasury Department 
so I am not really able to speak to that issue.
    Senator Schatz. Is there anyone who can speak to this 
issue?
    [No audible response.]
    Senator Schatz. Let me do it this way, Mr. Kurtz. This is 
the problem. Somebody comes to the Federal Government and says, 
your housing, so help me do housing. Then you say, well, I do 
this portion of housing and you have to go talk to this other 
agency. And you have to talk to another part of the agency that 
I am in charge of, and on and on. Especially when you are in 
the development business, you have to deal with a bunch of 
stuff on the private sector side, county approvals and 
everything else, then they end up sort of stuck not even 
knowing who they are supposed to talk to first.
    Mr. Kurtz, can you help us by reducing to writing a 
flowchart on how all of this is supposed to work? I am going to 
ask you to do it. You can do it with BIA or whomever.
    But it seems to me that we should not be satisfied with 
``that is Treasury.'' I get that is Treasury. I understand how 
the government works. But the question becomes how do we make 
this manageable for someone whose full-time job is not to 
become a CDFI. You just got just passed a note. Is it useful 
information to all of us?
    Mr. Kurtz. I hope so. We are happy to increase the 
participation of CDFIs in the 184 program. We would love to do 
that. The creation of CDFI, I am happy to talk to the Treasury 
Department to have a better understanding about how that works 
and see if there are ways we can assist in increasing the CDFIs 
in tribal lands.
    Senator Schatz. Governor, was there a document, say a one-
page document that says here is your punchlist, who you have to 
talk to and in what order?
    Mr. Zuni. No. It took quite a while to get it through.
    Senator Schatz. Can we work together between our Federal 
agencies and develop a one-page punchlist of here is what you 
need to do to become a CDFI?
    Mr. Kurtz. Absolutely. I would have to talk to Treasury 
about that.
    Senator Schatz. The other question I have, and I didn't 
quite get the answer following up on Vice Chairman Udall's 
question, are private lenders leaving the market?
    Mr. Kurtz. I think we are seeing generally there have been 
less 184 loans over the last few years. But as a proportion, we 
are seeing an increase in the trust land loans taking place.
    Senator Schatz. Okay. Can we get some fidelity on that 
data, how it all breaks down?
    Mr. Kurtz. Sure.
    Senator Schatz. I think the other question is, if there are 
major shifts in what is happening in the lending market, not 
just the sort of raw data on, it used to be 40 percent private 
lenders and now it is 32 percent, but why? Also, whether we 
should be concerned because if the needs are being met, I don't 
care whether it is a CDFI or some other way to get the capital 
into the community. But the question I have is what exactly is 
happening with private lending? Is it problematical enough to 
rise to the level of public policy, or is it just sort of the 
vagaries of the market?
    Can you get back to us on both what the data shows and then 
what, if anything, we need to do about it?
    Mr. Kurtz. Absolutely.
    Senator Schatz. Thank you.
    The Chairman. Why did Wells Fargo pull out of the 184 
program? They were one of the larger participants.
    Mr. Kurtz. I would have to get back to you on that, sir, on 
the details.
    The Chairman. Senator Daines.

                STATEMENT OF HON. STEVE DAINES, 
                   U.S. SENATOR FROM MONTANA

    Senator Daines. Thank you, Mr. Chairman.
    It is an honor to have Council Member Nate Mount with us 
here today. It is always nice to have another Montanan. Welcome 
to Washington. It is great to see a friendly face, another 
Montana face here in Washington.
    I read your testimony and I have heard firsthand about Ft. 
Belknap's struggles with housing. I applaud the direction the 
tribe is taking, to think about how we can move to greater 
homeownership. It is an important step forward and you have my 
full support.
    I have been active in leading the digitization of land 
records, which I know can speed up the loan process but, as we 
all know, there is a whole lot more that we can do.
    Council Member Mount, thank you for coming here today to 
speak about the housing issues facing Indian Country and for 
your efforts in providing a most fundamental need. That is 
hope.
    My first question is for you. Could you detail the issues, 
some of the problems you face, and how we can and how we need 
to be more helpful to assist homeownership for Ft. Belknap and 
also for other Montana tribes?
    Mr. Mount. Yes, thank you, Senator Daines.
    The biggest problem that I highlight in my testimony is the 
TSR process. That was one of the bigger problems. Solving that 
would include your providing oversight, Indian Affairs 
providing oversight. I know this isn't the Appropriations 
Committee, but you can provide oversight and also promote the 
appropriations. We need that. We need to be able to digitize 
our records so that we can have accurate information for 
potential homeownership.
    The other main issue was not really an issue but it was the 
proposition of a priority deployment mechanism. I don't know if 
you recall that in my testimony. It would basically allow the 
tribes to designate housing areas, notify the HUD Secretary and 
then thereafter BIA, the Bureau, would get the TSRs done within 
a 90-day process period.
    Senator Daines. You brought up the 90-day process, three 
months. I have a question for Director LaCounte.
    These housing difficulties are well known by tribes across 
Montana. We just heard from Council Member Mount from Ft. 
Belknap who spoke about the struggles they face, some of the 
inefficiencies in working with the BIA.
    He talked about the challenges. My question for you is, how 
is BIA making this easier for tribes like Ft. Belknap and 
others in Montana to access needed resources for homeownership? 
Because at the end of the day, we are in the customer service 
business. That is a customer. We are responsible to provide 
customer service.
    So if we think about the tribe as a customer, and you are 
in the business of providing customer service in the BIA, how 
can we help?
    Mr. LaCounte. First off, a TSR is a title status report. To 
hear 90 days, there is no 90-day timeframe. I ran that Land 
Titles and Records Office. I gave them three days to put a 
title status report out. I think HUD and others have confused 
the tribes with that issue. I think it is oftentimes the lease 
itself. It is not the title status report.
    Better communication, we can do that. But this is our 
priority, and it was my priority when I ran the Land Titles and 
Records Office in Billings, Montana. I am surprised to hear the 
testimony I am hearing today. I am going to get on the phone 
when I get out of here and say what the heck happened. Because 
when I left it was running quite well.
    Senator Daines. Well, any help you can provide, if you have 
a stove piped organization, whether it is HUD or BIA, we need 
help. The last thing is a customer, Ft. Belknap being a 
customer, they do not want to hear, well, it is an internal 
problem here with the bureaucracy. So your leadership to help 
sort that out, they do not need to hear excuses, but need to 
see results on this, would be most appreciated.
    Mr. LaCounte. Right. I am going to look into that one. I 
take that one personally.
    Senator Daines. Thank you.
    If we can take this from three months to three days, I 
think Council Member Mount might even buy you a dinner 
somewhere.
    Mr. LaCounte. I can't take it.
    [Laughter.]
    Senator Daines. Just checking on the ethics there. Good 
work.
    I have one last question. Ft. Belknap established the 
Island Mountain Development Group as the economic arm for the 
tribe. Island Mountain has done some admirable things to bring 
economic opportunity to the tribe and the surrounding areas and 
create jobs. It is a great story.
    They have had experience, they being Island Mountain, with 
difficulties with Indian housing loans. They know this process 
can take over two years to complete. I came from the private 
sector, where the Federal Government could probably take a few 
lessons from, where efficiency and accountability is demanded 
and expected. In the private sector, housing loans typically 
are three months to complete. We are seeing two years in some 
cases here in Indian Country.
    Director LaCounte, the Federal Government takes two years 
to complete the home loan process. The private sector, three 
months. What actionable steps can be taken to align the 
outcomes with the Federal process here with what we see in the 
private sector? How do we take it from two years to 90 days?
    I am not talking about the first issue, where we need to go 
from 90 days to three days. I am talking about the whole home 
loan process taking up to two years. You can help us on that 
one too.
    Mr. LaCounte. I will do what I can. What I am hearing here 
today, is, he said it politely. I will be more direct and to 
the point. There are a whole lot of lending institutions that 
don't want to loan money on reservations or to Indian people. 
They stall, delay. They do not provide us what we need and 
sometimes they just go away.
    I have a great example on Ft. Belknap. The former president 
of the Ft. Belknap Indian Community, the last one, not 
President Werk but President Azure, went to USAA, who proudly 
serves veterans, at least that is what their TV ads tell us. 
President Azure is retired military with a pension. He had 
called me, I called him a friend. He called me a couple years 
ago and said, would you be a reference for me. I am having a 
difficult time getting a loan from USAA, who supports veterans.
    Well, he is the President of the Ft. Belknap Indian 
Community, he is a veteran on a pension and they wanted nothing 
to do with him. He never got a loan from them. I am proud to 
say he is now my superintendent there, and hopefully he will 
try to get a loan again. That is the reality we live with.
    I will do anything I can to reduce that process, but there 
are a whole lot of people who do not want to loan money out 
there. I will say that on the record.
    Senator Daines. Thank you for your candor. If we just keep 
circling the airport and not talk about what is really going 
on, we are not going to land the plane. We need to get to the 
bottom of this because what the tribe is doing in Ft. Belknap 
is moving tribal members through to homeownership. I think that 
is a critical part of continuing to move people up through the 
American dream and into a path to prosperity.
    It starts many times with homeownership. As Milton Friedman 
once said, and I told the tribe this last time they were in my 
office, Milton Friedman once said, nobody washes a rental car. 
Home ownership is very important. Thank you.
    The Chairman. Senator Smith.

                 STATEMENT OF HON. TINA SMITH, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Smith. Thank you, Mr. Chair and Vice Chair Udall.
    I want to thank all of you for being here. I really very 
much appreciate it, for your testimony and your work to figure 
out what we can do to remove barriers to homeownership amongst 
Native communities.
    I would like to especially welcome Patrice Kunesh for being 
here today to share the great work that is being done at the 
Center for Indian Country Development at the Minneapolis Fed. 
It is wonderful to see you, and also the sister of my friend, 
Mary Kunesh Podein, who is a Minnesota State legislator doing 
amazing work with colleagues in Minnesota on missing and 
murdered indigenous women, which is something many of us on 
this Committee have been working on as well.
    Thank you so much for being here. We are so lucky to have 
you as a resource in Minnesota.
    My office has been doing a series of meetings and listening 
sessions all over Minnesota on the question of shortages of 
housing across the board. We have had two meetings specifically 
focused on the issues on Native-specific challenges with 
housing and security and homeownership. Everywhere I go, people 
tell me the same thing, which is what we all know as humans, if 
you don't have a safe, affordable place to live, nothing else 
in your life works. It is just really foundational.
    A lot of the conversations that I have had with tribal 
leaders touch on this issue we have been talking about today 
around how we can make use of the HUD Section 184 program, 
especially on trust lands. This program is meant to encourage 
homeownership on tribal lands, but we just know it is not 
working as well for families living on trust land.
    Here is an example. The Minnesota Chippewa Tribe Finance 
Corporation is a lender in my State and has made over $10 
million in HUD 184 loans since 2006. But they have been 
hesitant to use the program for properties that are on trust 
land because they face such long delays in getting the 
certificates of guarantee, which is what we have been talking 
about.
    They say if these delays were not such an issue, they could 
make 30 percent more loans than they already do. Let me just 
ask you, Mr. LaCounte, what do you think is causing these 
delays?
    Mr. LaCounte. Oftentimes, I would guess they are looking at 
leasehold mortgages. Oftentimes, you have to carve out a small 
piece of an existing tract to identify the boundaries that are 
being held under this leasehold.
    Senator Smith. Kind of the complexity of trying to 
establish?
    Mr. LaCounte. You are basically establishing a tract within 
a tract which is going to require a survey. In your fine State, 
you can only survey certain months of the year. I would guess 
that is the majority of the holdup, because we recently opened 
a title office specific to the Midwest region which is centered 
out of Minneapolis. That title office is in Ashland, Wisconsin. 
That is all they do is serve that region. My guess it is 
probably that.
    Senator Smith. It is really around kind of the complexity 
of it.
    Mr. LaCounte. Correct.
    Senator Smith. Ms. Kunesh, what would be your perspective 
on this? I would love to know what your research has told us 
about what is causing these delays, and what we could do about 
it.
    Ms. Kunesh. What we have heard from the field, both from 
the lenders and from BIA, is that there are about 83 touch 
points for every single TSR. It involves multiple program 
offices from the Bureau of Indian Affairs.
    We have included a graph of the BIA TSR process, but it is 
actually more complex than that in that it is decentralized 
into area regional offices. There is a lot of variation between 
area offices, and there is actually variation within area 
offices.
    So we believe there needs to be centralization and 
standardization. We heard Mr. LaCounte talk about streamlining 
the HEARTH Act. I think there needs to be a lending housing 
czar as well.
    Going back to an earlier question, I think the HEARTH Act 
really is a good model, as well as one-stop mortgage. The 
ability to have one mortgage form, one process across all the 
agencies, I think really could support Mr. LaCounte in his 
work.
    Senator Smith. This would make a big difference in terms of 
helping solve this overall problem of homeownership if we are 
able to fix this.
    Ms. Kunesh. I definitely think so. We talked a lot about 
184. But again, we have 502 from RD and we have the Veterans 
Affairs Native American Direct. If we had a one-stop mortgage 
process within the Federal Government that we could support the 
BIA with its new technology, I think we would get more lenders 
to the market, I think we would see much more activity on 
reservation lands, and creating more homeownership, yes.
    Senator Smith. Would you say we are losing lenders?
    Ms. Kunesh. I have heard directly from lenders and from 
folks in the field that lenders are retreating from the 184 
program because of the administrative hurdles and processes. It 
is something that I really do not know that we can appreciate, 
that if we don't get a second certified TSR within a certain 
period of time, those lenders are penalized. Sometimes they 
have to buy back those loans. So they are hesitant to get 
involved in a program that is uncertain, maybe unstable, and 
they don't know that is going to support them.
    Senator Smith. Thank you. I know I am out of time but if my 
colleague will allow me just a moment more?
    This is a problem we obviously need to work on and to fix. 
I appreciate your comments very much. Meanwhile, I have been 
working with my colleague, Senator Rounds from South Dakota, on 
a bill that would allow lenders to take advantage of this HUD 
guarantee and make more loans on trust land. What the bill 
would do is, it would allow HUD to issue the certificate of 
guarantee before BIA issues the final title status report. 
While this is causing a big delay that is creating a lot of 
problems for people, we could just allow for HUD to issue the 
certificate ahead of time.
    Then what would happen is that lenders would temporarily 
take on the risk of borrower default, just until the final 
title status report is issued. In Minnesota, lenders like the 
Minnesota Chippewa Tribe Finance Corporation agreed that this 
would make it a lot easier for them to use the HUD 184 program 
on trust land, and it seems to me, reduce one hurdle that is in 
the way while we are trying to solve the fundamental problem 
here.
    I just wanted to mention that to my colleagues. I would 
love to have you take a look at this proposal. Maybe now that I 
am out of time, I can follow up with the rest of you and see 
whether, Mr. LaCounte in particular and Mr. Kurtz, how you 
think we might make this work.
    Thank you.
    The Chairman. Senator Cortez Masto.

           STATEMENT OF HON. CATHERINE CORTEZ MASTO, 
                    U.S. SENATOR FROM NEVADA

    Senator Cortez Masto. Thank you. Thank you all for being 
here.
    Let me follow up on what Senator Smith has talked about. In 
Nevada, our number one issue is housing as well. I have been 
throughout the State to our urban and rural areas and our 
tribal communities talking about housing. Council Member Mount, 
I think you said, is the number one issue you are seeing is 
housing as well.
    Like my colleague from Minnesota, we are trying to address 
this issue and what we can do at the Federal level to make it 
pencil out. So we are building more housing and affordable 
housing.
    Let me talk about one area, though, which is manufactured 
housing. I am curious. First of all, I am going to open this 
up. Let me ask just the panel in general who are willing to 
speak to this, the quality of manufactured housing, is it 
different today than what it was of past? I have heard concerns 
about the quality of manufactured housing is not worth 
investing in, or taking out that loan, and bringing it into our 
communities. But I also know that it has changed over the 
years. There is an opportunity now to really find some good 
quality manufactured housing that can come into our communities 
and address our housing concerns.
    Can somebody address the quality issue? Is there a quality 
issue with manufactured housing? Ms. Kunesh?
    Ms. Kunesh. If I may, Senator, we have studied manufactured 
housing in Indian Country. There are very high standards for 
manufactured or modular, factory-built homes. So I don't 
believe it is an issue of quality.
    We do have some very old units in Indian Country. I think 
those are much fewer now. But the opportunity to create 
homeownership through modular homes is actually quite exciting. 
And it is not a quality issue. What we find oftentimes it is 
access to the market. We have found in our research, through 
HMDA research that of all Native American applications for home 
loans, 70 percent of those loans are for manufactured housing.
    We have a graph in our written testimony that shows both 
the application as well as the denial rates. Seventy percent of 
those applications also are denied. We find that it is a 
captive market. Only two lenders represent the vast majority, 
they are also are manufacturers of homes. So in terms of the 
high price of loans on reservation, we see that manufactured 
housing accounts for 35 percent of that high interest rate. It 
is quite substantial.
    Senator Cortez Masto. Thank you, because you are leading 
right into my next question. I think there is an opportunity 
for manufactured housing. I thought the report you put 
together, you just identified it, has me concerned. Not only is 
it a captive market, but I am concerned about steering, quite 
frankly. What I have seen is, there was an article in the 
Seattle Times in 2015 that reported that a Clayton Homes 
salesperson told a Navajo woman shopping for a manufactured 
home that Vanderbilt was the only lender that finances on her 
tribal land. That was not true.
    I do have a concern that what we are seeing more of is this 
type of predatory opportunities occurring on tribal land. The 
article that I was referring to is part of a series of articles 
on predatory manufactured housing in the Seattle Times from 
2015 to 2016. They found that Native Americans were targeted by 
steering practices by manufactured homes sales people. That was 
before the CFPB, which is the Consumer Financial Protection 
Bureau, banned the practice. However, Congress reversed the 
prohibition when it passed S. 2155.
    That is my concern, is that now we are going to go back to 
the days of steering and more of this happening in our 
communities. I think it is incumbent upon all of us to really 
highlight what is going on and demand that the prohibition is 
put in place, because we are seeing what is happening.
    So I guess for purposes of Mr. LaCounte and Mr. Kurtz, do 
you have any concerns? Is your data telling you that what you 
are seeing, or any type of steering or activity when it comes 
to manufactured homes in our tribal communities?
    Mr. Kurtz. I have not seen anything about steering with 
manufactured home loans. But I will say to the quality issue, 
however, you can almost get better built than stick built with 
manufactured homes. We actually had an expo last year about 
innovative housing methods on the Mall. I believe we are going 
to have it again this year. We will be sure you get an invite 
to seeing some of these innovative manufactured housing 
processes.
    Senator Cortez Masto. There is an opportunity here.
    Mr. Kurtz. Yes.
    Senator Cortez Masto. Mr. LaCounte, do you see any type of 
steering? Are you concerned? Is this on your radar at all?
    Mr. LaCounte. My concern would be that there are so few 
lenders out there that in certain cases, you would only have 
access to one for any given land base. That would be my concern 
more so than anything. Like I said earlier, there are a lot of 
people who are very reluctant to loan money in Indian Country 
to Indian people on trust lands, on restricted lands.
    Senator Cortez Masto. Ms. Kunesh, what are you seeing? Are 
you seeing that? Is there any concern about steering or any 
type of activity like that, taking advantage?
    Ms. Kunesh. I think the data show that there is some 
concern, definitely. We recently published a paper, and my 
colleague, Richard Todd, really looked at race and location. We 
looked at manufactured housing specifically.
    But to the question of who is lending, we are finding that 
Native CDFIs are actually starting to look at the manufactured 
housing market as well, really most importantly, to give their 
constituents, their borrowers, an option. Sadly, it is just not 
well known.
    If someone is really direly needing a home and there is a 
manufactured home available, it sounds very enticing. They will 
go the quick route rather than the longer route. So I do think 
perhaps Native CDFIs also have a very important role in this 
market.
    Senator Cortez Masto. I have one final follow up.
    Ms. Kunesh, you talked about HMDA data.
    Ms. Kunesh. Yes.
    Senator Cortez Masto. Because that was really important for 
you to gather the information you did in your report.
    Ms. Kunesh. Yes.
    Senator Cortez Masto. I have concerns that really, the 
Dodd-Frank Wall Street Reform and Consumer Protection Act 
actually required that lenders report 22 additional data 
points. But that has since changed, again going back to the 
legislation that I just talked about. That is no longer the 
case.
    Ms. Kunesh. Right.
    Senator Cortez Masto. Without access to that information, 
is that having a negative impact on the information you can 
gather to determine what is happening, whether the steering is 
going on, whether there are predatory practices, or whether 
there is discrimination? I am curious. Or do you have access to 
that data?
    Ms. Kunesh. We do have access to HMDA. However, it seems 
that the current HMDA data captures only about 80 percent of 
mortgages in rural areas. Nevada is the most rural State in the 
Nation. So we don't know exactly what is going on, for example, 
in these large territories, these large regions.
    But it can get even lower than 60 percent or even 30 
percent when we talk about Indian Country. Indian Country is 
largely invisible in the data. We are often called Asterisk 
Nation because we don't appear to merit a note in terms of 
mortgage lending or in terms of demographics. We know a lot 
about disparities, but we don't know the real contextual 
details.
    So HMDA is very, very important, I would say vitally 
important, to really understanding who is lending, where they 
are lending, who is not lending, and then to dig down deep to 
why they are not lending.
    Senator Cortez Masto. Thank you. Let me say that is why I 
introduced the Home Loan Quality Transparency Act. I think we 
need to ensure that that HMDA data, all of that data, is made 
available, so that we can identify areas to potentially prevent 
any type of predatory lending or discrimination. But I identify 
areas that we need to focus on when it comes to housing needs 
across this Country, including in our rural and tribal 
communities.
    Thank you.
    The Chairman. Mr. Kurtz, what are the lending institutions 
that are lending in Indian Country like with the 184 program? 
Both Wells Fargo and BofA no longer are doing it. Who is?
    Mr. Kurtz. Smaller banks, but I will have to say that we 
have sort of a number of institutions that are interested in 
participating in the 184 program. We hope that the new 
regulations that we are in the process of working on will 
expedite and allow them to join the program.
    The Chairman. Director LaCounte, Section 3 of the Helping 
Expedite and Advance Responsible Tribal Ownership Act of 2012, 
the HEARTH Act, requires the BIA to conduct a study regarding 
the history and experience of Indian tribes that have chosen to 
assume responsibilities for operating the Indian Land Title and 
Records Office functions from the BIA. What is the status of 
the report? When can we expect it?
    Mr. LaCounte. I do not know. I will get some direction 
there. I will get back to the Committee.
    The Chairman. Okay. Thank you.
    Vice Chairman.
    Senator Udall. Thank you, Mr. Chairman.
    Mr. Kurtz, New Mexico is home to 19 pueblos. Traditional 
pueblo homes are adobe and can be over 100 years old. They 
often do not have running water or plumbing. But families 
continue to use these residences for ceremonial feast day 
gatherings or for other cultural purposes. So it is not unusual 
that many pueblo families have an additional primary place of 
residence that can accommodate 21st century living on the 
reservation.
    Native CDFIs, like Tiwa, understand this unique New Mexican 
reality. I would like to know what HUD is doing to work with 
the pueblos on this issue. What is HUD doing to ensure that the 
Section 184 program works for pueblo homeowners who want to own 
and occupy a modern home on their reservation while continuing 
to own and maintain their traditional pueblo residences?
    Mr. LaCounte. First of all, I saw some of these homes just 
a few weeks ago in your Pueblo. They are really fascinating.
    Senator Udall. In Isleta.
    Mr. LaCounte. Yes, in Isleta.
    We do have the Indian Housing Block Grant Program as well 
as the Indian Community Development Block Grant Program that 
can provide funds to rehab these homes. But there are some 
statutory requirements about the 184 program in what the homes 
need to have, like running water and electricity.
    Senator Udall. You will work with us on that, to make sure 
that works for these situations?
    Mr. LaCounte. I would be happy to get back to you.
    Senator Udall. Governor Zuni, this is a serious issue, is 
it not?
    Mr. Zuni. Yes, it is because like I stated one time some 
people aren't qualified to have two loans through the HUD 
Program. Traditionally, if you do have a home, a new housing 
development, and they are appointed for a position, then they 
don't qualify for a traditional home. It is very hard on them.
    The one thing that I stated, we don't want to lose our 
traditions and our customs. We have to maintain them as much as 
we can.
    Senator Udall. Thank you.
    Mr. Kurtz, the Native American Housing Assistance and Self 
Determination Act, or NAHASDA, is a critically important 
program for addressing the housing needs of Indian Country, 
which for many tribal communities is substantial. When compared 
with the national average, tribal households are three times 
more likely to live in an overcrowded house, and eleven times 
more likely to live in a house that has inadequate plumbing.
    NAHASDA's authorization expired in 2013. Unfortunately, we 
have been unable to reauthorize this Federal law because some 
members object to including Native Hawaiians, for misguided 
reasons, although Native Hawaiians are already included in 
NAHASDA.
    I have introduced legislation and amendments to reauthorize 
NAHASDA so tribes can have budget certainty and clarity that 
the Federal Government is upholding its trust and treaty 
responsibilities to provide safe and suitable housing for 
tribes. But my efforts have failed largely due to the 
aforementioned Native Hawaiian issue.
    Now, I would like to get the Administration's position on 
this issue. Do you agree that NAHASDA should be reauthorized to 
include all Native communities that currently benefit from its 
Federal housing programs?
    Mr. Kurtz. We would support the reauthorization of NAHASDA 
in whatever form we receive it from Congress.
    Senator Udall. But my question is a little more specific. 
You accept all of the folks that are in NAHASDA now and all the 
tribes that are in NAHASDA now?
    Mr. Kurtz. We support the reauthorization of NAHASDA.
    Senator Udall. Okay. Thank you very much.
    Thanks, Mr. Chairman. Thanks to all the Senators who came 
today and participated.
    The Chairman. With that, I want to again thank the 
witnesses for their testimony. The hearing record will be open 
for two weeks.
    With that, again, thank you and we are adjourned.
    [Whereupon, at 4:21 p.m., the Committee was adjourned.]

                            A P P E N D I X

Prepared Statement of Terry Brockie, Member, Gros Ventre Tribe of Fort 
Belknap Indian Community (FBIC); CEO, Island Mountain Development Group 
                                 (IMDG)
    My name is Terry Brockie. I am an enrolled member of the Gros 
Ventre Tribe of the Fort Belknap Indian Community (FBIC) in north-
central Montana, and I am the Chief Executive Officer of Island 
Mountain Development Group, the economic development arm of FBIC. I 
first want to commend the intent and initiative of the Senate Committee 
on Indian Affairs to address the lack of home ownership that exists by 
Tribal Members.
    I would likely be considered affluent as compared to the overall 
Tribal membership, yet I too am only two generations removed from 
poverty. I myself obtained my own home financing through the HUD-184 
program, and it was a terrible experience.
    I submit this testimony in the hope that other Tribal members 
across Indian Country can utilize this important program for Tribes and 
not experience my frustration and significant delays.
The Fort Belknap Indian Community (FBIC)
    The Fort Belknap Indian Reservation is homeland to the Gros Ventre 
(Aaniiih) and the Assiniboine (Nakoda) Tribes. The Fort Belknap Indian 
Reservation is geographically isolated in Montana, located forty miles 
south of the Canadian border and twenty miles north of the Missouri 
River. The Fort Belknap Indian Reservation encompasses an area 
consisting of 675,147 acres. The main industry is agriculture, 
consisting of small cattle ranches, raising alfalfa hay for feed and 
larger dry land farms. Fort Belknap has a tribal membership of 8,000 
enrolled members, with annual median income of less than $12,000.
Problems With Accessing Housing & Financing In Montana
In Montana, Native Americans Have The Most Significant Housing Crisis
    A 2013 report sponsored by the National American Indian Housing 
Council found that 40 percent of on-reservation housing in the United 
States is considered substandard, compared with 6 percent of all U.S. 
housing outside Indian Country.
    Nearly one-third of reservation homes are overcrowded. A 2017 
report by the YMCA Missoula titled Montana Racial Equity Report 
(https://ywcaofmissoula.org/wp-content/uploads/2017-Montana-Racial-
Equity-Report-Full.pdf) elaborated specifically on Montana:

        Housing Discrimination in Montana:

   In 2003, the U.S. Department of Housing and Urban 
        Development (HUD) conducted a study in Montana, Minnesota, and 
        New Mexico on housing discrimination. HUD found that Native 
        Americans are discriminated against more often than any other 
        ethnic minority in renting housing.

   In Montana, Native American renters experienced consistent 
        adverse treatment comparable to White renters 28.6 percent of 
        the time.

   While the HUD investigation was conducted in 2003, this 
        issue of rental discrimination has not gone away. In 2014, the 
        Montana Human Rights Commission received fifty complaints of 
        housing discrimination against Native Americans on the basis of 
        race. Other complaints of racial discrimination included 37 
        from African Americans and none from White Americans.

        Lack of Access to Private Credit/Mortgages Off-Reservation in 
        Montana:

   In Montana, American Indians are 8-10 percent more likely to 
        have a mortgage application denied than non-American Indians 
        with the same or similar credit, and in general, minority 
        applicants are more likely to have loan applications denied 
        than White applicants.

Problems With Accessing Housing & Financing On Ft. Belknap
Historical Housing Issues on Ft. Belknap
    The norm on my reservation is a non-existent housing market. On my 
reservation, new home ownership has been almost non-existent (almost no 
new homes in 25 years) due to a lack of access to capital on Trust 
Lands, among other issues. Most forms of historical home ownership on 
our reservation have been in the form of HUD mutual-help and tax-credit 
ownership. If for some reason and in rare circumstances, an individual 
Tribal member has collateral, they may be eligible for a conventional 
mortgage. I know of one individual, who is married to an enrolled 
Tribal member, that utilized a substantial herd of cattle as collateral 
to obtain credit for their home.
    Because of the lack of a housing market, our tribal membership has 
a lack of knowledge about a conventional home mortgage process (e.g., 
the importance of credit building, credit score, debt-to-income ratio, 
etc.). In fact, the Tribal membership has been conditioned to only 
utilize a designated Tribal housing entity, thus creating a dependence 
on federal housing programs and funds.
    Diversification in the scope of financial products and delivery of 
those products is necessary to the autonomy for Tribes to utilize the 
home mortgage process through CDFIs, etc.
    It is important to allow Tribal membership to build credit, equity, 
and have a home that appreciates rather than depreciates in value. 
Because of the non-existent home market and ignorance about the home 
mortgage process, perceptions are often skewed as to what the overall 
value of home ownership brings for the financial health to the 
individual, family, and community. The idea of a 30-year home mortgage, 
fixed interest rate, and the six-figure price often associated with the 
purchase of a home is often intimidating to a Tribal member that may be 
one generation removed from poverty.
Shifting Income Demographics & Increased Demand for Middle Class 
        Housing
    During this past generation, there have been many changes that 
include growth in tribal economies (like Ft. Belknap the past 7 years) 
and a new variance in borrower demographics within reservations. As 
such, I strongly feel that policy makers should reward tribal members 
seeking genuine independent homeownership, outside of the federal 
programs that foster a more dependent mindset. Tribal members need 
options like all Americans.
    Our tribal nation has historically struggled with 80 percent 
unemployment. IMDG now employs almost 200 full-time employees, and we 
are growing. We recently had two job openings and had approximately 40-
80 job applicants for each opening. In the southern part of the 
reservation where our headquarters are located, we have reduced public 
assistance by 48 percent.
    As our employees thrive and grow, they enter a new middle class for 
our community and are ready for home ownership. Yet we have no housing 
inventory to offer them. In order to buy a home, most have to live and 
commute 60 or more miles away from our reservation. In addition, for 
the handful of employees we would like to recruit from other locations, 
the lack of housing is a significant deterrent to working for us.
My Personal Experience with HUD 184 Program--23 Times Slower Than 
        Private Sector
    I am only aware of two other Tribal members, besides myself, on the 
Fort Belknap Indian Reservation who have completed the private loan 
process to secure a home. I began the Section 184 process on July 2nd, 
2014 and signed the final document (to the best of my recollection) on 
May 10th, 2016. The process took me 23 months to secure my home through 
the HUD Section 184 Home Buyer Program and live on my reservation.
Broken TSR Process
    In my experience, the certified Title Status Report (TSR) process 
is dysfunctional and remains the BIGGEST problem in the entire home 
application process. For the Tribal lease that I had approved through 
my Tribal Council, it took over 12 months to secure a certified TSR 
from the BIA for my home application. After much work and clarification 
of the lease and home loan process had occurred, the local BIA then 
submitted my home ownership application to the Regional BIA office for 
title review and recording.
    The single biggest impediment to the successful use and 
implementation of the HUD 184 program is the slow process for BIA/
Tribal/HUD approval of the paperwork and approval requirements for 
trust lands. Specifically, the Title Status Report (TSR) process takes 
too long to be practically useful. The BIA Rocky Mountain Region is a 
substantial impediment in this home approval chain. We are uncertain if 
it is understaffing, underfunding or lack of experience, but any 
process that takes approximately 23x longer than a regular private 
marketplace transaction is clearly broken.
    These unwarranted delays are particularly costly in regions like 
ours where the winters are harsh and the building seasons are very 
short. Thus, quick timing in coordination with the tight building 
seasons is essential to creating private housing development on the 
reservation.
    Many provisions in the HUD regulations put deadlines and 
requirements on the borrower in order to reduce the risk on HUD. 
However, almost nothing in the regulations put any requirements on HUD 
or DOI or the Tribe to ensure the process is quick and efficient for 
the borrower, thus reducing the borrower's and builders' risks.
Additional Government Bureaucracy in a Private Sector Timeline
    In addition to the TSR process, there were many other delays in the 
governmental processes. Most of my home loan application documents 
required a Tribal chairman's signature as the authorized signer on 
behalf of a Tribe. I am not sure if this is a CFR, HUD, or is something 
Tribes have the autonomy to change. Perhaps this could be addressed 
through the Tribe itself, but nevertheless it was often hard to track 
down our chairman due to his availability and accountability to 8,000 
tribal members. I had one step in my home loan process that sat on the 
Director of Realty's desk for over 2 months. I had to constantly check 
on the status of their review of my application.
    I was told that I needed EPA forms filled out that required a 
designation and environmental review if my home was located next to a 
wetland or coastal plain (there are none at Ft. Belknap). Just finding 
the proper Tribal official that could certify (which may be non-
existent for some Tribes) and sign on the form created another 
bureaucratic exploration within the Tribal Government. There are many 
other examples, such as the coastal management form, that the potential 
homeowner needs to search out the proper individual or program as it 
relates to forms or proper signatures for the forms. This was a costly 
and time-consuming process when you are working full-time and have to 
take personal time off, often to have it wasted because an individual 
was not there, no one is certified to review, or the Tribe is unsure 
who an individual should be directed to.
    With respect to HUD, my application finally was submitted to the 
regional HUD office in Denver at the end of the fiscal year and I was 
told that they had placed a freeze on approval of individual home loan 
packages in order to perform fiscal year end auditing. They said it 
would take two weeks. It actually took five to six weeks. In addition 
to the BIA bureaucratic process that took many months, this additional 
delay meant that it would be another 8 months until my home mortgage 
was completed.
HUD Underwriting Rigidity
    We recently visited with the Assistant Secretary for Policy 
Development and Research at HUD and several members of ONAP, and we 
questioned these representatives on how often underwriting guidelines 
are reviewed considering changing markets and what data is used to 
determine policy changes balanced with wise risk management. We were 
told that the policies have not been updated since the inception of the 
HUD 184 program in 1992, and there is no transparency in data used for 
consideration. What was originally considered flexible underwriting is 
now considered rigid underwriting due to the vast changes in markets 
and housing applications since 1992. This rigidity limits eligibility 
with outdated, unsupported restrictions. Tribal members deemed 
ineligible due to these restrictions may easily qualify with 
alternative programs offered off of the reservation. The limiting 
factor is the location of the home--thereby discouraging growth on 
trust lands in tribal communities. Loans offered through other federal 
entities undergo regular reconsideration supported by current data. The 
HUD 184 program underwriting, policies, and processes need significant 
updating to remain an effective source of financing, and to increase 
the impact of the program's original intent.
Chronically Underfunded and Under-Resourced
    In my opinion, tribal departments (especially in the Plains and 
Rocky Mountain Regions) are chronically underfunded, under-resourced, 
and do not have updated leasing practices--all contributing to 
inefficiencies in the home loan process. Additional funding to enhance 
Tribal governments for residential housing would be beneficial.
Lack of Appropriate Home Appraisal Process
    In addition, with regard to the home appraisal process, the 
appraiser could not find a single home on my reservation that could be 
utilized as a comparable home to give value on reservation. This shows 
the genuine lack of knowledge about the tribal housing market and 
struggle appraisers have in even looking for reservation based 
comparable homes.
Contrast with Private Sector--23 Times Slower
    In contrast, prior to the purchase of my current home on my 
reservation, I was going to purchase a home through a conventional home 
mortgage process off-reservation. That whole process would have taken 
no more 30-90 days from the beginning of the application process to 
actual home ownership with my family. In three weeks, I was pre-
approved by a financial institution, met with a realtor, searched for a 
home, selected a home after the negotiation of price, and scheduled the 
home inspection process. At the time, I was informed it would have been 
another 2 to 3 weeks to be in the home.
    Many individuals who begin the Section 184 Home Buyer Program 
understandably lose patience in the process due to the substantial 
bureaucracy and inefficiency of the program, and so do the mortgage 
providers. Despite qualifying, having all my paperwork completed 
correctly, and my housing all lined up, it took 23 months to complete 
my mortgage through the HUD 184 process.
    Consequently, and to no one's surprise, there is also a direct 
correlation to the reduction in the banks that are willing to provide a 
Section 184 loan package due to these delays. Mortgage lenders told me 
inasmuch, it is not economically viable for them to participate in 
lending under HUD 184 because of the federal government's delays.
    One mortgage lender shared with me that on average they generally 
close their mortgages with one (1) month.
    Which means it took the CEO of our economic development corporation 
23 times longer to obtain a HUD-184 home mortgage on trust land on the 
Ft. Belknap reservation than in took an average consumer anywhere else 
in the United States. Twenty-three (23) times longer.
Potential Solutions
    In addition to having been thinking about these reforms ourselves 
for a very long time, we have been meeting with several mortgage 
providers for their insights and input. Almost twenty years ago, in the 
2000s, there were nearly 30 banks and lenders participating in the HUD 
184 program, we understand that today that is now in the single digits. 
When we met with mortgage providers, their recommendations for reform 
matched with ours below and those included in Ft. Belknap Councilman 
Mount's oral and written testimony.
TSR Process: Give Tribal Control & Digitization
    Perhaps most importantly, federal resources must be made available 
to update and digitization land records on the reservation. We 
appreciate the recent language in the Interior appropriations bill 
regarding digitization, but there needs to be follow up oversight from 
the Senate Committee on Indian Affairs.

         ''The Committee also recognizes increased digitization of 
        Indian land records would increase efficiency within Trust-Real 
        Estate Services. Within the amounts provided, the Committee 
        encourages Trust-Real Estate Services to implement additional 
        digitization of Indian land records to promote Tribal economic 
        development opportunities in Indian Country, including the Fort 
        Belknap Indian Community.''

        Report No. 116-123 to accompany S. 2580 at p. 57.

    Another solution would allow for the Tribes to have more control 
over the certified TSR process or for any and all parties involved to 
be able to work with the BIA in a shared data platform. A good example 
would be for Tribal designated entities to secure access to the BIA's 
TAAMS system efficiently to obtain any and all available information on 
the property.
    Off of the reservation, a title search is performed and reported in 
a preliminary title report, and once the loan is perfected, a final 
title policy recognizing the new mortgage lien(s) is issued within 90 
days to support the standard mortgage cycle. Currently, HUD requires 
the Certified TSR--somewhat equivalent of the final title policy--prior 
to a Section 184 loan guarantee. The borrower themselves have no 
control over the lack of efficiency and timeliness; yet the borrower is 
inadvertently punished when their mortgage documents have expired prior 
to loan guarantee.
Congressionally Mandated Streamlining
    In my experience, there are way too many entities involved in the 
Section 184 process: individual home buyer, Tribal departments, agency 
and regional BIA, EPA, HUD, and lending institutions. The overall 
process needs to be streamlined to give Tribes and tribal designated 
entities more control and more accountability to the individual 
homebuyers.
    My tribal council recently passed its version of the Hearth Act for 
Residential Leasing purposes only. When it is approved by the BIA, I 
believe this will help reduce the multi-layered bureaucratic process to 
become more manageable to individual homebuyers. However, even this BIA 
approval process is months behind.
    In my experience, there is too much disconnect and blame between 
the various participating agencies: BIA, HUD, and Tribes. A more 
simplified, sequential process needs to be created that clearly defines 
who does what and when, with strict timelines and clear guidelines in 
place with instruments to hold entities accountable. I feel this is 
absolutely essential to enable potential homeowners on reservations to 
have an expedited home buying experience, like a conventional home 
mortgage process off-reservation.
    A federal, top-down mandate is needed to direct all participating 
federal entities to be consistent across all state and regional levels 
and to utilize a simplified Section 184 program and other services that 
are applicable in Indian Country.
    A few additional recommendations include:

   Use HUD 184 ``Collected Fees'' to hire more regional HUD and 
        BIA loan staff

   Have the private banking sector review, edit and streamline 
        the HUD 184 and TSR paperwork process

   Adopt the ``Priority Deployment Mechanism'' as outlined by 
        Councilman Mount in his oral and written testimony

Conclusion
    The federal government's inefficiencies significantly hinder 
individual tribal member homeownership on reservations and on trust 
lands and must be addressed by Congress. The existing multi-layered 
bureaucratic process encourages an environment in direct contrast to 
federal fair housing mandates, and in effect, creates a system of 
unfair housing practices for tribal members on trust lands. Tribal 
members have no choice but to follow these unclear procedures and have 
no remedies for costly delays--and, quite often, simply do not obtain a 
home of their own. The lack of consistency and accountability nullifies 
the original intent and initiative in offering these programs.
                                 ______
                                 
   Prepared Statement of the Center for Indian Country Development--
                National Native Homeownership Coalition
                     detailed policy considerations
    Improve the Title Status Report processes for lending on trust 
lands--The U.S. Department of the Interior through the Assistant 
Secretary of Indian Affairs and the Director of the Bureau of Indian 
Affairs should establish a standard process for all offices (national, 
regional, and area offices) to provide timely TSRs on trust lands with 
clear and concise instructions to lenders and tribes. In addition, 
definite processes should be established to ensure that the Second 
Certified TSRs are provided to lenders within 30 days of an initial 
request. DOI should actively communicate the standard process to 
lenders and external business partners. BIA should implement a 
transparent tracking system for the TSR process and providing an 
escalation process for lenders when TSR standards are unmet, such as a 
hotline number.

         Improved TSR processes will generate additional lender 
        interest in Indian Country and greatly improve the application 
        process for borrowers on trust land.

    Require BIA to examine tribal leasing regulation approval process 
and approval Provide technical assistance to support tribes in adopting 
HEARTH Act regulations--Only 40 tribes have adopted some form of HEARTH 
Act leasing regulations, while 26 tribal applications for residential 
leasing are pending in the BIA. This low number appears to indicate a 
problem with tribal adoption and implementation of the HEARTH Act. The 
backlog also is concerning because the BIA's recent approval record is 
only two or three tribal regulations per year. The BIA should perform 
an assessment to understand why so few tribes are implementing the 
HEARTH Act.
    In addition, funding is needed for technical assistance to support 
tribal residential leasing programs, including establishing a tribal 
land recording system and digitization of land records. Recent 
appropriations prioritizing digitization efforts for the Fort Belknap 
Indian Community in Montana could present a model process for 
supporting other tribes' assumption of land and leasing 
responsibilities.

         Technical assistance could increase tribal uptake of the 
        HEARTH Act leasing regulations, which could facilitate economic 
        development and homeownership opportunities on trust land.

    Deploy Native Community Development Institutions as re-lending 
intermediaries for all federal home loan programs to increase the 
supply of credit in Indian Country--Congress should permanently 
authorize the USDA Rural Development, HUD, and the VA to deploy Native 
CDFIs as re-lenders of those mortgage programs in Indian Country (other 
Native serving financial institutions as well). All of these agencies 
have limited staff resources to reach Native borrowers on tribal lands. 
Native CDFIs have direct and extensive experience operating on tribal 
lands and they intimately know their communities. In addition, they 
provide extensive financial and homebuyer education to their clients. 
Native CDFIs in South Dakota are demonstrating the value of the pilot 
program by connecting eligible borrowers with the 502 direct loan 
program, supporting the application process, and servicing the loans.

         Native CDFIs enhance Rural Development's reach into Indian 
        Country, and likewise could similarly extend the reach of the 
        VA NADL and further support the HUD Section 184 loan guarantee 
        program on national scale.

    Clarify the foreclosure process and support tribal strategies for 
risk mitigation involving federal mortgage products in Indian Country--
Despite standard provisions in Tribal Leasing Agreements that prescribe 
tribal courts as the court of competent jurisdiction for purposes of 
judicial recourse, a misperception among federal agencies and lenders 
about options for handling delinquent loans associated with leasehold 
mortgages on trust land has unfairly deprived American Indians and 
Alaska Natives of critical capital. Language is needed to clarify that 
the Department of Justice is authorized to pursue foreclosures through 
tribal courts pursuant to the mortgage agreements between tribes and 
federal agencies. To the extent federal agencies lack knowledge about 
tribal court systems, they should be permitted to contract with 
qualified attorneys to pursue foreclosure actions in tribal courts; 
currently this is not an option with the HUD 184 Loan Guarantee 
Program. In addition, federal agencies should recognize and support 
tribal risk mitigation strategies that alleviate the tensions around 
jurisdiction and streamline the foreclosure and eviction process.

         Providing lenders with more certainty about their rights to 
        recourse and remedies will increase the supply of credit for 
        transactions involving trust land.

    Improve data quality and access to information on loans in Indian 
Country--Policy makers and program managers need access to current and 
accurate data to assess the performance of their programs and services. 
However, high quality, detailed data are not readily available to the 
public, and most available data are outdated. Access to complete data 
in a timely manner permits more engagement and better decisionmaking 
around allocation of scarce resources.
    The following are a few specific areas to address:

   HMDA data should identify whether a loan occurred on or off 
        reservation lands and whether the loan occurred on trust land 
        or fee land in either case.

   The loans should indicate the year the tribe opted into the 
        184 program and the year the off-reservation lands were 
        designated by the tribe.

   HMDA loan records should specifically identify Section 184 
        loans, and direct loans from government agencies such as the VA 
        and USDA should be reported to HMDA.

         Access to lending data will help identify effective strategies 
        for supporting AIAN borrowers.

    Encourage investment in Indian Country through Community 
Reinvestment Act--The CRA requires depository institutions to meet the 
credit needs of all segments of their service areas, especially 
distressed and underserved census tracts (low- and moderate-income 
communities). Currently, a lender's service area is defined by its 
physical offices and branches. American Indian reservations rarely have 
branches and offices located nearby. Encouraging CRA-related activity 
on trust lands requires a multi-faceted approach, such as:

   Deem services to low- and moderate-income reservation 
        residents as serving high-need areas regardless of whether 
        locations are part of a lender's service area.

   Place a higher CRA value on lending activity to this 
        population without limitations, which would give these lands 
        additional value for a large lender.

         Greater access to capital and credit for Native CDFIs would 
        allow them to expand their successful programs and serve the 
        consumer needs of Native communities.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                           Patrice H. Kunesh
    Question 1. What can Congress do to alleviate burdens to on-
reservation mortgage lending and reverse the downward trend?
    Answer. Congress already has created powerful tools to support on-
reservation mortgage lending, such as the Department of Housing and 
Urban Development (HUD) 184 Loan Guarantee program, the Veterans 
Affairs (VA) Native American Direct Loan program, and the U.S. 
Department of Agriculture Rural Housing Service 502 direct and 
guaranteed loan programs. Congress also has enacted the Helping 
Expedite and Advance Responsible Tribal Homeownership (HEARTH) Act to 
facilitate tribally directed land-use development. These programs, 
however, lack a standard mortgage process and all mortgages on trust 
lands must be approved by the Department of the Interior's Bureau of 
Indian Affairs (BIA), whose unique land titles and records system 
differs from the industry's processing and recording standards. Thus, 
despite access to substantial public capital and the potential for 
significant private lending, these institutional challenges discourage 
lenders from lending to Native borrowers who reside on their 
reservation homelands.
    What is needed is a coherent and consistent process that lenders, 
developers, and borrowers can rely upon. This means:

        1.  Creating a unified mortgage process for federal housing 
        programs, including a uniform mortgage application much like 
        the previous ``one-stop'' mortgage program, along with a 
        standard cross-agency Memorandum of Agreement that recognizes 
        tribal laws and delineates available remedies.

        2.  Normalizing the land title processes within the BIA and 
        conforming the title recording system (the Trust Asset and 
        Accounting Management System, or TAAMS) to industry standards 
        (accessibility, accuracy, and accountability).

        3.  Establishing a standard process for all BIA offices 
        (national, regional, and area offices) to issue timely Title 
        Status Reports (TSRs) on trust lands with clear instructions 
        and accessible support to lenders and tribes. In addition, 
        definite processes should be established to ensure that the 
        Second Certified TSRs are provided to lenders within 30 days of 
        an initial request.

        4.  Implementing a transparent tracking system for the BIA's 
        TSR process and providing an escalation process for lenders, 
        such as a hotline number, when TSR standards are unmet.

        5.  Providing funds for technical support to tribes for HEARTH 
        Act programs, including digitization of tribal land records. 
        Recent appropriations prioritizing digitization efforts for the 
        Fort Belknap Indian Community in Montana could present a model 
        process for supporting other tribes' assumption of land and 
        leasing responsibilities.

        6.  Requiring Indian Housing Authorities and Tribally 
        Designated Housing Entities to be included in HUD's housing 
        counseling program. Currently, the program's regulation, 24 CFR 
        214.103(a), expressly applies to private or public nonprofit 
        organizations and units of local, county, or state governments, 
        which has been interpreted to exclude tribes from participating 
        in this very meaningful program.

    In addition, reauthorization of the Native American Housing 
Assistance and Self-Determination Act (NAHASDA) would allow tribes to 
build new housing stock, preserve existing housing units, and leverage 
their NAHASDA dollars for bigger projects. Congress also could allow 
tribes to use their NAHASDA funds for middle-income households that 
earn up to 120 percent of area median income (AMI) to reach a broader 
pool of potential home buyers. This more accurately reflects the higher 
costs of housing in rural Indian Country communities.
    There are additional ways Congress can incentivize lending to 
Native borrowers on reservation lands and increase the pool of private 
lenders in the HUD 184 program. These include:

        1.  Authorizing Native community development financial 
        institutions (CDFIs) (and other Native American financial 
        institutions) as lender intermediaries and servicers of federal 
        home finance programs; and

        2.  Monitoring agency progress to ensure these institutional 
        reforms are implemented. Congress and this Committee should 
        regularly monitor agency progress and create a national Native 
        homeownership scorecard. That scorecard would annually report 
        the number of mortgage loans issued to Native borrowers on 
        trust and restricted lands, track the BIA's TSR processing 
        timeframes by regional office, and track the approval of tribal 
        leasing regulations under the HEARTH Act. This reporting 
        mechanism would reflect an important accountability 
        consideration, improve the delivery of federal programs and 
        services, and help capture the social and economic impact of 
        increased housing and homeownership on reservation communities.

    Question 2. What can the BIA and tribes do to address these issues?
    Answer. Both the BIA and tribes have distinctive responsibilities 
in addressing these issues. In fulfilling the federal government's 
trust responsibility to Native tribes and people, the BIA is a vital 
resource to tribes in almost every aspect of economic and community 
development, including creating an on-reservation housing market to 
meet the demand for more affordable housing stock. Likewise, in 
exercising sovereign authority over their lands, tribes are responsible 
for creating conditions conducive to reservation investment and 
community development. However, the Government Accountability Office 
(GAO) has recently found that severe underfunding of federal trust 
obligations has ``impeded the efficient deployment of federal programs 
and services specifically intended to benefit tribes and Native 
peoples, which in turn has discouraged private investment in Indian 
Country.'' \1\
---------------------------------------------------------------------------
    \1\ Funding these federal trust obligations is addressed in a 
recent report from the GAO, Resource Constraints and Management 
Weaknesses Can Limit Federal Program Delivery to Tribes, GAO-20- 270T. 
Nov 19, 2019. Accessible at https://www.gao.gov/products/GAO-20-270T. 
This report adds to the GAO's report published earlier this year, 
Improving Federal Management of Programs that Serve Tribes and Their 
Members, Substantial Efforts Needed to Achieve Greater Progress on 
High-Risk Areas, GAO-19-157SP. Mar 6, 2019. Accessible at https://
www.gao.gov/products/GAO-19-157sp.
---------------------------------------------------------------------------
    As noted above, I recommend that the BIA use its authority to 
establish and implement a coherent and consistent process that lenders, 
developers, and borrowers can rely upon. In addition to these 
recommendations, BIA should examine its HEARTH Act tribal leasing 
regulation review process and provide technical assistance to support 
tribes in adopting tribal regulations. Only 40 tribes have adopted some 
form of HEARTH Act leasing regulations, while 26 tribal applications 
for residential leasing are pending in the BIA. The backlog is 
concerning because the BIA's recent approval record is only two or 
three tribal leasing regulations per year. The BIA should perform an 
assessment to understand why so few tribes are implementing the HEARTH 
Act. Overall, the BIA should improve its data quality and provide 
broader access to information on loans in Indian Country in a timely 
manner.
    In addition, the BIA should do the following:

        1.  Normalize the land title processes within the BIA and 
        conform the title recording system, TAAMS, to industry 
        standards (accessibility, accuracy, and accountability).

        2.  Establish a standard process for all BIA offices (national, 
        regional, and area offices) to issue timely Title Status 
        Reports (TSRs) on trust lands with clear instructions and 
        accessible support to lenders and tribes. In addition, definite 
        processes should be established to ensure that the Second 
        Certified TSRs are provided to lenders within 30 days of an 
        initial request.

        3.  Implement a transparent tracking system for the BIA's TSR 
        process and provide an escalation process, such as a hotline 
        number, for lenders when TSR standards are unmet.

    Tribes also have an important role in creating conditions conducive 
to residential lending and exercising an expansive governance role in 
promoting investment within their territories. Tribes have sovereign 
authority over their lands, but they do not have control over the 
federal processes to put their lands to good and productive use. 
Nevertheless, one of the most demonstrable ways tribes exercise 
sovereignty is through their judicial systems. This includes ensuring 
the enforceability of contracts through laws that establish rights, 
remedies, and recourse options in tribal courts, and establishing a 
secured transactions law along with a lien-filing system.
    Tribes that have succeeded in expanding homeownership opportunities 
for tribal citizens have pursued self-governance over residential 
leasing by:

        1. Adopting HEARTH Act regulations,

        2. Assuming BIA Realty and Land Titles and Records Office 
        functions through 638 contracts or compacts, and

        3. Promoting community-wide financial education and home buyer 
        readiness. As importantly, tribes should actively pursue 
        relationships with private lenders and help them better 
        understand the unique qualities of Indian Country and support 
        their engagement in lending on trust land. \2\

    \2\ Jorgensen, Miriam and Hope Nation Consulting, LLC. Mortgage 
Lending on South Dakota's Indian Trust Land: Findings from a Survey of 
Lenders. South Dakota Native Homeownership Coalition. October 2019.
---------------------------------------------------------------------------
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                           Patrice H. Kunesh
    Question 1. What impact would the reforms that you outlined in your 
testimony have on the number of additional units built?
    Answer. We believe that our proposed reforms could have a 
significant increase on the number of affordable housing units 
throughout Indian Country. The number of additional housing units 
actually achieved (built and preserved), however, will depend on the 
collective commitment to closing the housing gap for Native Americans 
from federal, state, and tribal governments, as well as private lenders 
and other stakeholders in Indian Country. Investments in housing 
directly impact investments in other key areas, such as education and 
business.

    Question 2.How long will it take to clear this backlog?
    Answer. In 2017, HUD estimated that Indian Country needed 68,000 
additional units to alleviate dire overcrowding conditions. We believe 
that number is on the lower bound of what is required to meet the full 
spectrum of housing needs and strong demand for homeownership. In 
addition, the Native population is young and a fast-growing 
demographic, such that housing needs are increasing as well.
    The Center for Indian Country Development (CICD) at the Federal 
Reserve Bank of Minneapolis has not researched how long it will take to 
clear the backlog and close the housing gap in Indian Country, nor is 
it familiar with studies specifically addressing this question. 
However, Congress could request such a study to better understand the 
resources and time required to address the housing need. For example, a 
goal of building 50,000 units and preserving 5,000 more units across 
Indian Country within five years would require coordinated federal 
mortgage programs, streamlined processes, and engaged lenders. A 
central federal Indian Country housing hub could orchestrate the 
implementation of such a plan, harmonize federal home loan programs, 
and support the diverse geographies of Indian Country.

    Question 3. How can we improve on the current structure for HUD 184 
loan guarantees on tribal trust lands?
    Answer. As HUD currently is updating its regulations, it should 
consider several recommendations from Indian Country. These 
improvements include: establishing processes compatible with other 
public and private home finance products and consistent with industry 
standards (including technology compatibility); creating a streamlined 
process for participating lenders that absolutely ensures the issuance 
of Certificates of Guarantee in a timely manner; permitting Native 
CDFIs to deliver and service HUD loans; and amending the HUD Housing 
Counseling regulation, 24 CFR 214.103(a), to include tribes and 
Tribally Designated Housing Entities (TDHE) as entities eligible to 
participate in HUD housing counseling programs. In addition, the 184 
program should be expanded to offer interim financing for new home 
construction.

    Question 4. What impact does having to hold mortgage loans at the 
primary lender pending Ginnie Mae approval have on the ability of that 
lender to issue more mortgage loans?
    Answer. A functioning, reliable secondary market is necessary to 
meet the growing housing needs in Indian Country. Holding mortgages as 
the primary lender limits the amount of capital available to lend and 
impedes the lender's ability to meet the borrowing needs of the 
community. In addition, holding a mortgage pending Ginnie Mae approval 
creates additional risk and increases the cost of lending in Indian 
Country. For example, if the BIA fails to issue the final (second) 
certified TSR, or if HUD is late in issuing its Certificate of 
Guarantee, Ginnie Mae reclassifies the loan as ``defective'' and the 
lender must take the loan back. This process creates more uncertainty, 
greater risks, and increased costs that effectively can--despite the 
federal guarantee--discourage lenders from participating in the program 
and cut off capital to Indian Country.

    Question 5. Can you also discuss what steps the private sector 
could take to improve the ability to make and close mortgage loans on 
trust lands?
    First, the private lending sector must be able to understand the 
lending system in Indian Country and rely on the rights and remedies 
delineated in the mortgage documents. To support this goal, the 
mortgage process for Native borrowers on trust lands must be 
normalized, using standard forms and consistent processes across 
federal home loan programs. Lenders also should actively foster 
relationships with tribal governments, tribal housing authorities, and 
developers--engaged lenders are more informed, more supportive, and 
more successful. This insight comes from a recent South Dakota Native 
Homeownership Coalition survey of lenders who offer mortgages on trust 
lands in South Dakota, including CDFI loan funds. \3\ Lenders indicated 
general awareness of the HUD 184 program, yet cite borrower credit 
history as a barrier to lending on trust land. Some lenders pointed to 
the lack of affordable housing as their reason for low engagement. In 
addition, some financial institutions were unaware of the remedies 
available in the event of delinquency and foreclosure of a HUD 184 
loan. One bank offered that ``instead of complaining, we need to step 
in and try to understand and work towards understanding.''
---------------------------------------------------------------------------
    \3\ Mortgage Lending on South Dakota's Indian Trust Land: Findings 
from a Survey of Lenders. South Dakota Native Homeownership Coalition. 
October 2019.
---------------------------------------------------------------------------
    In addition, the secondary market for mortgage loans is critical to 
bringing private capital to reservations. Thus, technical and financial 
support to Native-serving financial institutions in becoming direct 
Fannie Mae mortgage lenders is needed in order help Indian Country 
reach the secondary market.

    Question 6. What policies would you recommend to incentivize the 
building of affordable rental housing?
    Answer. As with homeownership and commercial development, 
incentivizing affordable rental development on trust land requires 
normalizing lending processes on trust lands and coordination among 
federal programs. The need to incentivize affordable rental 
construction, however, is not only an Indian Country problem. In the 
area of Low Income Housing Tax Credits (LIHTCs), recent CICD research 
\4\ shows that Indian Country (Figure 1) is part of a national trend of 
decreased LIHTC construction since the 2008 financial crisis (Figure 
2).
---------------------------------------------------------------------------
    \4\ Whaley, Kenneth. ``Low Income Housing Tax Credits and 
Affordable Rentals in Indian Country.'' CICD Working Paper 2019-07. 
Forthcoming, December 2019.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Affordable rental programs must be matched to the community's 
needs. Many rental projects in Indian Country are single-family 
developments that are in need of substantial updates to make them safe 
and habitable. Thus, LIHTC developments that build desirable, multi-
use, quality homes could factor into a bold plan to meet Indian 
Country's housing needs and long-term community vision of 
homeownership. Furthermore, to realize Indian Country's full potential, 
one option would be to streamline LIHTC requirements to make lease-to-
purchase programs more accessible and successful. Where possible, these 
projects should be supported with wraparound services for tenants, 
---------------------------------------------------------------------------
including financial and homeownership education.

    Question 7. Would you agree that affordable rental housing is 
important for overall economic growth, part of the necessary 
infrastructure for the 21st century, and a good way to create jobs in 
Indian Country?
    Answer. Yes. In Indian Country and elsewhere, housing is 
inextricably entwined with community health and well-being. Much of 
Indian Country remains in persistent poverty, which means affordable 
rental housing will be needed for the foreseeable future. Indeed, 
because Indian Country's housing needs span all income levels, 
affordable rental housing is a necessary complement to homeownership. 
Moreover, affordable rental housing can offer the opportunity to build 
savings and prepare for future homeownership, especially when LIHTC 
units are converted to owned units.
    Figure 3 shows a map of LIHTC housing in Tribal Statistical Areas 
(TSAs). Many large reservations have relatively few LIHTC projects. Of 
the 41,000 LIHTC projects reported in 2017, 1.5 percent were in TSAs 
and 2.8 percent were in statistical areas neighboring TSAs. Of those in 
tribal areas, 45 percent were in Oklahoma. We suspect that the 
substantial LIHTC development in Oklahoma is due to the status of the 
land (prevalence of fee or restricted fee land), as well as population 
density compared to more rural reservations.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                 ______
                                 
Response to Written Questions Submitted by Hon. Catherine Cortez Masto 
                          to Patrice H. Kunesh
    Question 1. Will the expanded Home Mortgage Disclosure Act (HMDA) 
data required by Dodd-Frank factor into future reports?
    Answer. The Center for Indian Country Development (CICD) plans to 
continue its research on HMDA data as it relates to mortgage lending to 
Native borrowers. We already have begun reviewing the recently released 
2018 HMDA data. We believe continued collection of the new HMDA 
demographic variables is valuable to understanding the real lending 
landscape in Indian Country and the rest of the U.S.

    Question 2. What future directions will the CICD explore in 
mortgage financing for Native Americans?
    Answer. The CICD is engaged in an array of research projects 
focused on lending systems, credit scores, and Native American 
financing institutions. We plan to go further with our HMDA analysis 
using the expanded 2018 HMDA data. For example, in previous HMDA 
reports, the lack of credit score information seriously impeded our 
understanding of the links among creditworthiness, lending, and costs. 
The expanded HMDA 2018 data no longer censor the nonhigh- priced 
interest rates (rates less than 1.5 points above the Average Prime 
Offer Rate), which will provide a better picture of the overall lending 
situation in Indian Country. We now plan to examine how HMDA's credit 
risk data impact our findings on the higher price of mortgage finance.

    Question 3. What policy recommendations for the manufactured-
housing market should we consider to lower the cost of mortgages for 
home buyers, especially Native Americans?
    Answer. Native American borrowers on trust lands tend to prefer 
manufactured homes (likely a reflection of the land status) and are 
highly vulnerable to high-priced loans for manufactured homes. The 
pricing of manufactured-home loans varies widely depending on the 
region of the country, location on or off reservation trust lands, and 
the availability of diverse financing sources. However, as noted in our 
testimony, Native borrowers pay considerably more for home loans 
located on reservation trust lands.
    The manufactured-housing industry is a highly concentrated market 
of manufacturers and lenders. This close relationship requires 
significant institutional changes beyond our purview. However, we 
understand the value and importance of educating Native communities 
about these concerns and have included a chapter on manufactured 
housing in the CICD's Tribal Leaders Handbook on Homeownership. Such 
information should be more broadly shared and addressed with tribal 
housing authorities and specifically included in HUD housing counseling 
programming. Another way to reduce the cost of manufactured homes is to 
make sure they are included as eligible types of housing in all federal 
home loan programs, which could offer lower interest rates for those 
loans.
    It also is important to recognize that the high price of home loans 
to Native borrowers could be reduced overall by normalizing the 
mortgage process on trust lands.

    Question 4. Could you elaborate on why many Native American 
families are unable to access HUD's Section 184 loan guarantee?
    Answer. The historical data indicate that Native American families 
have widely used the HUD Section 184 home loan guarantee program, 
particularly since 2004. The program has made it possible for thousands 
of Native people across the country to become homeowners. It also has 
been instrumental in building wealth and assets in Indian Country, 
including personal financial management (financial education and credit 
building). Thus, the HUD 184 loan guarantee program has been critically 
important for Indian Country economic and community development.
    However, the extent to which HUD 184 mortgages are used by Native 
borrowers mostly on fee land and generally off-reservation indicates a 
structural issue rather than a financial impediment. See Figure 4. 
Normalizing trust land lending in the BIA and establishing a 
cooperative BIA-HUD interagency relationship would shore up the loss of 
lenders from the program and encourage more private lender 
participation. It also would ensure that all federal housing programs 
can reach the populations and places they are designed to serve.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Standard mortgage forms and efficient processes would go a long way 
to curb the exit of private lenders from the HUD 184 program, as would 
modernizing HUD's digital mortgage infrastructure (which is 
incompatible with some private lending systems). Moreover, to reach 
more Native borrowers on trust lands, HUD should authorize and train 
Native CDFIs as Section 184 lenders. Tribes can do their part by taking 
a more active role in ensuring that tribal legal and judicial systems 
fully support mortgage lending within their jurisdictions, and building 
relationships directly with lenders would be helpful. \5\
---------------------------------------------------------------------------
    \5\ See footnote 3.
---------------------------------------------------------------------------
    Question 5. Why are Native American and Alaska Native-reservation 
loans notably less likely to be Federal Housing Administration (FHA)-
insured, VA-guaranteed, or Rural Housing Service-guaranteed than other 
loans?
    Answer. We are not able to respond fully to the likelihood of 
reservation-based mortgage lending being outside a federally insured or 
guaranteed program. For Native borrowers, however, accessibility is not 
impeded by any legal or financial factor. Thus, potential impediments 
may be structural issues within the programs. Normalizing trust land 
lending in the BIA would encourage the increase of private lender 
participation in these federal programs.

    Question 6. Fannie Mae and Freddie Mac have a duty to serve 
manufactured-home buyers and rural communities. What involvement have 
Fannie Mae and Freddie Mac had in providing affordable financing for 
Native American communities?
    Answer. Indian Country also is included in Fannie Mae and Freddie 
Mac's Duty to Serve initiatives. Since its inception, representatives 
from both Fannie Mae and Freddie Mac have been members of the CICD's 
National Native Homeownership Coalition. Collectively, our coalition 
has supported problem-solving and institution-building conversations 
with tribes and other organizations working in Indian Country on home 
buyer education, mortgage lending systems, and access to secondary 
markets.
    For example, Fannie Mae currently is working with two Native CDFIs 
so that they can become Fannie Mae direct mortgage lenders, while also 
working to connect other Native American financial institutions with 
the secondary market. Fannie Mae also has extended its lending 
relationship with four tribal nations, and an three more formal 
relationships are pending approval of tribal governments. In addition, 
Fannie Mae has established loan service agreements with four Native 
lenders. These agreements recognize the value of supporting the success 
of homeownership at the local level and are essential to well-
functioning housing markets in Indian Country. Freddie Mac has 
supported the South Dakota Native Homeownership Coalition's research 
and report on Mortgage Lending on South Dakota's Indian Trust Land: 
Findings from a Survey of Lenders.

    Question 7. The Federal Home Loan Bank (FHLB) also has an 
affordable housing mission. What investments in Native American 
homeownership has the FHLB made? Is there a regional Bank that is a 
leader in serving Native American home buyers and reservation 
communities?
    Answer. The FHLB of Des Moines (FHLB-DM) has been quite engaged in 
this area and it would be ideal for all FHLBs with a trust land 
footprint to develop a similar program. The FHLB-DM's Native American 
Homeownership Initiative is a readily accessible source of down payment 
assistance to Native borrowers and the FHLB-DM has continued to 
increase the amount of funds available to this program. In November 
2017, the FHLB-DM issued a $5 million grant to enhance the role of 
Native CDFIs--proven vehicles for bringing capital and financial 
education to Native communities--in mortgage lending and preparing home 
buyers.
    The FHLB of Chicago also provides some down payment assistance for 
trust and restricted lands, and it purchases HUD 184 loans, functioning 
as a secondary market for the Oneida Nation's Bay Bank in Green Bay, 
Wisconsin.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                          Hon. Andy Werk, Jr.
    Question 1. What is the biggest obstacle to homeownership and 
affordable housing?
    Answer. Unfortunately, the Fort Belknap Indian Community is in an 
affordable housing crisis with multiple major obstacles to 
homeownership and affordable housing for our Tribal citizens. For 
example, our homeland unemployment rate has averaged 70 percent, the 
median household income is low at $12,000 per year, and we have 
overcrowded homes with an average of 13-18 residents per single home. 
Additionally, our current housing wait list has more than 150 families 
waiting for any housing opportunity and the average wait-time for that 
list is 3.4 years.
    The Fort Belknap Indian Community also has limited infrastructure 
available to support homeownership and affordable housing. Even with 
the older and limited housing units that serve the Reservation (see 
response to question 3, below), existing infrastructure appears to be 
at capacity in the few developed areas in the Community. Further, 
significant environmental issues (e.g., old trash dumpsite) must be 
addressed before any development can be pursued and the limited 
existing housing is not maintained well due to limited funding for 
tribal environmental oversight.
    In addition to the conditions on the ground, a substantial 
impediment to the successful use and implementation of federal housing 
programs (like the HUD Section 184 program) as well as any private 
investment in Indian housing, is the unnecessarily slow and unduly 
burdensome process for BIA/Tribal/HUD approval of submitted paperwork 
and approval requirements for a home loan on trust lands (as just one 
example., almost 2 years for the CEO of our economic development 
corporation, a highly educated and sophisticated borrower). Without 
going into too much detail, other obstacles include underfunded and 
under-resourced Tribal departments, lack of an appropriate home 
appraisal process, rigid HUD underwriting, impractical title status 
report process, and an overall multi-layered bureaucratic process that 
takes way too long without necessary accountability.

    Question 2. How would you recommend that we address that obstacle?
    Answer. The Community's housing crisis requires urgent, sustained 
attention and action at the federal and tribal levels. In addition to 
making federal housing funding (in today's dollars and at current 
construction costs) available to our local entities, we need to enhance 
tribal capacity to address the substandard housing and infrastructure 
conditions in our Community by encouraging greater self-management of 
Indian housing programs and by encouraging private sector financing to 
complement limited federal funding and programs. Our Community, through 
the Fort Belknap Tribal Housing Authority and Tribally-authorized 
community entities, has created a local task force to assess, address, 
and implement housing solutions across tribal departments and federal 
agencies.
    With respect to the tribal level, the tribal departments need a 
central office to share residential housing information. An increase in 
capacity, both training and human resources, will be necessary to 
coordinate all relevant information including maps, land, title, 
encumbrances, environmental reviews, cultural surveys, and access and 
communication between all applicable information technology systems, 
federal and tribal. In particular, access to TAAMS and the more 
comprehensive data portal referred to by BIA Director LaCounte in his 
testimony will be essential for the Tribal departments (and private 
sector companies interesting in tribal housing) to facilitate access to 
residential housing information that exists in the multiple information 
systems.
    Our suggestions for the federal level contain much more detail in 
Councilman Mount's submitted written testimony (as well as a written 
statement by Mr. Brockie, CEO of the Community's tribally owned 
economic development entity) to the U.S. Senate Committee on Indian 
Affairs. In sum, we are currently pursuing HEARTH Act approval by the 
U.S. Department of the Interior for an alternative leasing program to 
augment existing federal housing resources. However, we need immediate 
deployment of federal agency resources to match our current task force 
resources to eliminate the major obstacles to homeownership and 
affordable housing in the following ways: digitization of land 
documents at the local and regional level; tribal access to BIA 
technology information systems that deal with land issues (e.g., new 
BIA data portal and TAAMS); expedited and more efficient HUD Section 
184 loan guarantee process; a more efficient process for BIA's delivery 
of title status reports; and an overall expedited environmental review 
process for tribal housing.
    In our view, congressional oversight is necessary to hold federal 
agencies accountable to help the tribal entities create and maintain a 
more simplified, sequential process that clearly defines who is 
responsible for what and when, with strict timelines and clear 
guidelines in place. This is essential to enable potential homebuyers 
on Indian reservations to have a fair and expedited opportunity to buy 
a home or have affordable housing, just like a conventional home 
mortgage or rental process off-reservation. An overall streamlined 
process can enable tribes and tribally-authorized entities more control 
and more accountability to the potential individual Indian homebuyers.
    In our most recent survey of Fort Belknap employees, they said 
housing is the number one priority to make their lives better. And we 
know that access to stable, quality, accessible, affordable homes is 
the cornerstone to help kids do better in school, to enable workers 
find and keeps jobs, to begin to address homelessness and housing 
poverty, and to create a pathway out of poverty that reduces the long-
terms costs to our Community for providing social services and criminal 
justice. With an increase in resources at the federal and Tribal 
levels, we firmly believe that we can be successful in making gains in 
addressing affordable housing and homeownership issues.

    Question 3. What role does rental housing play in addressing the 
affordable housing crisis?
    Answer. Other than much older low-income HUD rental units, rental 
housing is almost non-existent on the Fort Belknap Indian Reservation. 
Our community has persisted despite minimal rental options since 1995--
the last units built with HUD funding. Specifically, as to the Fort 
Belknap Indian Community, a handful of low-income rental units were 
originally built in 1970 and these original housing units were followed 
by a few additional units annually until 1995. Even with the units 
built, over time we have discovered that these older units suffer from 
poor insulation, structural deficiencies, and significant mold 
problems.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Catherine Cortez Masto 
                         to Hon. Andy Werk, Jr.
    Question 1. How prevalent is manufactured housing in your 
community? How do homeowners finance their manufactured home purchase?
    Answer. Manufactured housing is relatively uncommon at Fort 
Belknap. While affordable, it is often not a good fit for the harsh 
winter weather conditions we experience on the Hi-Line, with freezing 
temperatures the majority of the year and significant snow 
accumulation. Additionally, the leasing challenges that drove the 
Tribe's decision to implement its HEARTH Residential Leasing Act also 
inhibit there being any place to put manufactured housing in the first 
place. And for the single-digit number of residential leases processed 
by the Fort Belknap BIA and Tribal Land, manufactured housing is just 
as difficult to finance as stick-built homes. Our Tribal members 
typically do not have access to conventional mortgages for manufactured 
homes, just as with stick-built homes.

    Question 2. What policy recommendations for the manufactured 
housing market should we consider to lower the cost of mortgage for 
homebuyers, especially Native Americans?
    Answer. In our view, the recommendations are the same as between 
manufactured housing and stick-built homes. We are encouraged by HUD's 
Section 184 reforms, which we understand generally include reducing 
paperwork burdens, increasing staff and eliminating unnecessary and 
duplicative environmental reviews--all of which serve to decrease the 
time burdens currently discouraging conventional mortgage lenders from 
lending on reservations. More competition would lower costs. 
Analogizing to football--where you have coaches, players and fans 
broadly fielding and supporting the team, we do not perceive the need 
for more coaches (mortgage lender education programs) or fans (those 
people without a vested interest but often making opinions about tribes 
or mortgage lenders despite a lack of experience in Indian Country), we 
need more players--mortgage lenders for whom it makes business sense to 
make loans to Native Americans living on reservations because they can 
timely complete their underwriting and security requirements (most 
particularly receiving BIA Title Status Reports) and be able to rely on 
having predictably repaid, enforceable mortgages in Indian Country just 
as they do off-reservation.

    Question 3. The Federal Home Loan Bank also has an affordable 
housing mission. What investments in Native American homeownership has 
the Federal Home Loan Banks made? Is there a regional Bank that is a 
leader in serving Native American homebuyers and reservation 
communities?
    Answer. Fort Belknap has no positive experience with these programs 
or any leadership by regional banks. We are in a mortgage desert. We 
are trying to solve that problem for ourselves, with our economic 
development arm, Island Mountain Development Group, preparing a Tribal 
mortgage code, investor education modules, and internal mortgage 
offerings for Tribal members that Island Mountain could in turn bundle 
and sell in the secondary market to the likes of Fannie and Freddie. We 
are working to both provide internal solutions and increase Tribal 
members' access to conventional mortgages by encouraging regulatory 
reforms and developing Tribal infrastructure to support mortgage 
lending.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                          Hon. R. Hunter Kurtz
HUD Section 184 Loan Guarantee Program
    Question 1. Congress established HUD's Section 184 Loan Guarantee 
Program to help Tribal members obtain homes on Tribal trust lands. 
However, according to multiple reports, only a small fraction of loans 
guaranteed by the Section 184 Program in recent years have been for 
home on trust lands. What steps is HUD taking to increase the 
utilization of the Section 184 Program for homes on trust lands?
    Answer. HUD is currently developing a proposed rule to modernize 
and strengthen the Section 184 Loan Guarantee program. To help develop 
this proposed rule, HUD conducted 18 consultation sessions with Indian 
tribes across the country and solicited substantial feedback from all 
participants. Ultimately, HUD believes the proposed rule changes will 
increase utilization of Section 184 on trust lands.
    In addition to the on-going rulemaking process, HUD continues to 
collaborate with the Bureau of Indian Affairs (BIA) on improving the 
BIA approval process for Section 184 loans on trust land. For instance, 
as discussed during the hearing, HUD is working with the BIA to gain 
access to the Trust Asset and Accounting Management System (TAAMS). 
This will help provide HUD with visibility into loans that are pending 
approval before the BIA and improve HUD's internal loan approval 
process.
    Between 2017 and 2019, the number of Section 184 loan guarantees on 
trust land grew by 49 percent. HUD guaranteed a total of 179 loans on 
trust land in 2017, 249 loans on trust land in 2018, and 267 loans on 
trust land in 2019. HUD will work to continue this positive trend in 
the future.

    Question 2. How does HUD work with lenders and borrowers 
participating in the Section 184 Program to ensure that borrowers 
receive the best possible rate for their home loans and are not taken 
advantage of by the lender?
    Answer. HUD takes its oversight and monitoring responsibility for 
the Section 184 loan program very seriously. Lenders interested in 
participating as a Section 184 lender complete a detailed application 
and are thoroughly vetted to ensure they have the necessary licensing, 
experience, and expertise to provide quality service to Native American 
borrowers. In addition, lenders attend training on mortgaging tribal 
trust land loans as well as train any new loan originators. Existing 
approved lenders are monitored to ensure adherence to their quality 
control plan and compliance with the Section 184 loan processing 
guidelines. We expect to address these issues in the proposed rule.
Manufactured Home Loans
    Question 3. The Center for Indian Country Development examined 
loans that were made to Tribal members for manufactured homes and found 
that these loans are not only more prevalent among Native Americans 
living on trust land, but also more costly than loans for conventional 
stick-built homes. You testified that HUD is exercising oversight into 
the current use of manufactured housing in Indian Country. What is the 
scope of HUD's oversight in this regard?
    Answer. Various HUD offices play a critical oversight role. The HUD 
Office of Manufactured Housing Programs issues and enforces national 
standards for the design, construction, installation, and performance 
of manufactured homes, in order to ensure their safety, quality, and 
affordability.
    Additionally, under the Section 184 program, approved lenders are 
also required to follow stringent requirements when it comes to issuing 
loans for manufactured homes that HUD will guarantee under the program. 
For example, manufactured homes must be built after June 15, 1976, 
cannot be moved from their original foundation, must be de-titled, and 
the lender must provide HUD with a certification and engineer's report 
that the foundation complies with the HUD requirements and is of 
sufficient size and strength to support the unit, and more. These 
requirements ensure that a borrower is acquiring a home that is 
structurally sound and properly placed on a foundation.

    Question 4. Do these oversight efforts include looking into 
predatory lending practices targeting Native borrowers seeking 
financing for manufactured homes?
    Answer. HUD is committed to ensuring that no family falls victim to 
predatory lending practices, including Native American borrowers 
seeking financing for manufactured homes. The Section 184 lender 
approval process and program underwriting guidelines are both designed 
to ensure that the program only guarantees loans made by reputable 
lenders. Additionally, HUD monitors lenders to ensure that program 
requirements are complied with and to guard against fraud and 
misrepresentation. If HUD discovers that a lender has engaged in 
predatory or other prohibited lending practices, HUD would collaborate 
with the Consumer Financial Protection Bureau to ensure appropriate 
action is taken.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Catherine Cortez Masto 
                        to Hon. R. Hunter Kurtz
    Question 1. What policy recommendations for the manufactured 
housing market should we consider to lower the cost of mortgage for 
homebuyers, especially Native Americans?
    Answer. There are two primary methods of financing manufactured 
homes: the financing of manufactured homes as chattel (home only) and 
the financing of manufactured homes titled as real estate (home and 
land).
    Loans secured as chattel generally carry higher interest rates due 
to the higher risk of such collateral and the more limited secondary 
market, regardless of where such homes are located.
    One way to help lower borrowing costs is to promote real property 
loans, and the ownership of fee simple land and leasehold mortgages on 
trust land. Another way to address this issue is to expand a secondary 
market for these kinds of chattel loans. HUD, however, has not explored 
the latter proposal.

    Question 2. Could you elaborate on why many Native American 
families are unable to access HUD's Section 184 loan guarantee?
    Answer. The Section 184 program remains the primary source of 
mortgage financing for Native American families. Annually, HUD 
guarantees thousands of loans to expand sustainable homeownership in 
Indian Country. However, major barriers remain--particularly when it 
comes to lending on trust land. In its 2017 Native American Housing 
Needs Study, HUD conducted a comprehensive analysis of mortgage lending 
on tribal land. The study found that there were various major barriers 
to lending on trust land, including the following:

        1.  The trust status of the land means the land cannot be 
        alienated or easily be used as collateral.

        2.  Bureau of Indian Affairs (BIA) processing can be expensive, 
        complex, and time-consuming.

        3.  Tribes must issue leases to tribal members who want to 
        become borrowers so that they can mortgage their leasehold 
        interests.

        4.  BIA and lenders must take various steps to allow NEPA 
        reviews to be completed, which can take time.

        5.  Typical challenges of lending in very remote areas (e.g. 
        weak private housing markets).

    Additionally, for Section 184 lending to occur on trust land, a 
Tribe must also have the necessary legal ordinances. This includes an 
acceptable lease, foreclosure and eviction procedures, and priority of 
lien.
    Tribes that are successfully utilizing Section 184 have developed 
in-house experts that: provide homebuyer education and credit 
counseling; are adept at navigating the lease and mortgage recording 
process; and have developed relationships with lenders to ensure that 
obstacles are addressed immediately so that the loan closes without 
delay. HUD is documenting these best practices through a series of 
national webinars that are posted on its webpage.

    Question 3. Why are Native American and Alaska Native--reservation 
loans notably less likely to be FHA insured, VA-guaranteed, or Rural 
Housing Service-guaranteed than other loans?
    Answer. HUD works with its partner agencies to ensure that 
borrowers access the loan product that is most beneficial to them. HUD 
also engages in interagency collaborative efforts designed to address 
barriers to mortgaging tribal trust land, streamline lease and title 
status report recording processes, educate lenders, and address 
duplicative environmental issues. HUD remains committed to these 
partnerships to ensure that Native families have a choice in the 
mortgage products that work best for them.
    Prior to the inception of the Section 184 program, FHA insured 
mortgages on trust land under the Section 248 program. Since the 
authorization of the Section 184 program in the early 1990s, the 
Section 184 program has served as the primary source of mortgage loans 
in Indian Country and has generally been regarded as a more effective 
program than the predecessor Section 248 program, which is now largely 
inactive. This is because the Section 184 program is more tailored to 
meet the unique needs of Native American homebuyers. Under the Section 
184 program, and unlike the Section 248 program, Indian tribes and 
Native American families have a dedicated Office of Loan Guarantee 
within the Office of Native American Programs to provide training and 
technical assistance, assist Tribes with developing required legal 
ordinances, and process loan guarantees to allow families to achieve 
homeownership.
    HUD defers to the U.S. Department of Veterans Affairs (VA) and the 
U.S. Department of Agriculture (USDA) on questions related to the 
volume of guaranteed loans under their programs. HUD regards these 
agencies as major partners in the work of expanding homeownership in 
Indian Country. In furtherance of this common goal, HUD has 
collaborated with VA and USDA on various interagency initiatives, 
including the development of a model residential lease of tribal land 
that is acceptable to all agencies under their respective direct and 
guaranteed loan programs.

    Question 4. How has HUD moved to ensure against losses in cases 
involving fraud, misrepresentation and other predatory practices in 
Native communities?
    Answer. HUD's planned proposed rulemaking to update the Section 184 
regulations would significantly strengthen the program by adding 
additional accountability and protecting borrowers and taxpayer 
dollars.
    The regulatory changes we expect to be making will make the program 
more sustainable for years to come. However, it is important to note 
the program today is healthy and is on a good trajectory.

    Question 5. How has HUD sought the advice and consultation of 
Native communities in its efforts to both broaden access to home 
mortgage credit and curb predatory lending practices?
    Answer. HUD reaffirms its government-to-government relationship 
with Tribal governments and regularly engages in tribal consultation to 
ensure HUD policies and programs reflect the views of, and address the 
needs of, Tribal communities.
    For instance, HUD engaged in extensive tribal consultation when 
developing the Section 184 draft proposed rule. Beginning in February 
2018, HUD held 15 inperson regional and national sessions and three 
national teleconference consultation sessions. HUD began consulting 
with Tribes before the Department began drafting the regulation. Tribes 
were also given a copy of the proposed regulations to review and 
comment on before HUD began the process of readying the draft 
regulations for Departmental clearance and public comment.
    During these consultation sessions, some Tribes expressed to the 
Department the need to expand access to lenders--specifically, many 
lenders do not have a local presence in remote Tribal communities, and 
Tribes indicated that this makes it more difficult for tribal members 
to obtain a mortgage loan. HUD took this feedback into consideration 
when developing the draft proposed rule. HUD will continue to solicit 
tribal feedback as this rulemaking process proceeds and looks forward 
to that input as it works to improve this vital program for Indian 
Country.

    Question 6. Fannie Mae and Freddie Mac have a duty-to-serve 
manufactured homebuyers and rural communities. What involvement have 
Fannie Mae and Freddie Mac had on providing affordable financing for 
Native American communities?
    Answer. HUD defers to Fannie Mae and Freddie Mac on questions 
relating to their work in Indian Country.

    Question 7. The Federal Home Loan Bank also has an affordable 
housing mission. What investments in Native American homeownership has 
the Federal Home Loan Bank made? Is there a regional Bank that is a 
leader in serving Native homebuyers and reservation communities?
    Answer. HUD defers to the Federal Home Loan Bank system on 
questions relating to work in Indian Country. However, the Department 
recognizes that funding from the Federal Home Loan Banks are often 
leveraged with HUD's Title VI Loan Guarantee program and other 
financing for affordable housing development in Tribal communities.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                          Hon. R. Hunter Kurtz
Community Development Financial Institutions
    When the Community Development Financial Institutions (CDFI) Fund 
was created, CDFI's had limited access to private capital. Over the 
past two decades, the CDFI Industry has matured and extends credit and 
provide financial services to underserved communities. Despite this 
record of success, the President's Budget proposes to eliminate funding 
for Community Development Financial Institutions (CDFI) Fund 
discretionary grant and direct loan programs.
    Nearly $8.7 million has been awarded to Washington state Native 
awardees. CDFI investments have also generated $12 in private capital 
for every dollar in CDFI grants. CDFI's are an important resource to 
provide economic development in underserved communities and provides 
assistance that is leveraged 12 times over.
    Question 1. What programs does HUD or the Bureau of Indian Affairs 
have that provide the same or greater level of support for economic 
development in these communities?

    Answer. HUD's Office of Native American Programs (ONAP) administers 
multiple programs that help foster economic development in Tribal 
communities.
    Under the Indian Housing Block Grant (IHBG) program, ONAP provides 
approximately $650 million annually in formula grants to Indian tribes 
and Tribally Designated Housing Entities (TDHEs) to support affordable 
housing primarily for low-income families. Tribes and TDHEs rely on 
this critical source of funding to construct new housing units, 
maintain their existing housing stock, rehabilitate homes to extend 
their useful life, provide rental assistance to Tribal members, support 
the elderly and disabled, prevent homelessness amongst Veterans, and 
support self-sufficiency initiatives targeting youths. Tribes determine 
their housing priorities based on their local needs, and then direct 
the use of these funds to meet those needs consistent with principles 
of self-determination and self-governance.
    Whether a Tribe or TDHE is using its annual funding to construct 
new housing units, rehabilitate and maintain existing housing units, or 
develop on-site utilities and housing-related infrastructure, these 
funds serve as a catalyst both for current and future economic 
development in Tribal communities. Tribes often employ Tribal members 
to help do the construction and rehabilitation work funded under the 
IHBG program. Some Tribes have developed strong force account crews 
that not only work to meet the needs of their community, but also have 
partnered with other Tribes to serve as contractors to help construct 
new homes and provide critical training to their host Tribe's 
workforce. This model ensures that these important IHBG dollars are 
recycled back into local tribal economies many times over. Beyond 
directly supporting the employment of Tribal members working on 
construction and other housing-related projects, these funds also 
support countless ancillary businesses that provide materials and 
services needed to carry out the affordable housing projects.
    HUD's Title VI Loan Guarantee program is also an important catalyst 
of economic development in Indian Country. Under the program, a Tribe 
or TDHE can pledge a portion of its IHBG formula funding as collateral 
to secure private financing to carry out affordable housing and 
housing-related community development projects. Like the IHBG program, 
the Title VI Loan Guarantee program leverages both federal and non-
federal sources of funding to help finance and carry out large-scale 
projects in Tribal communities. Since its inception, the program has 
been used to guarantee approximately $250 million of private capital to 
fund affordable housing and community development projects.
    Finally, under the Indian Community Development Block Grant 
(ICDBG), ONAP provides over $60 million annually for competitive grants 
to Indian tribes to carry out a wide range of economic development, 
community development, and housing activities. Tribes have used these 
funds to help develop infrastructure (e.g. water and sewer projects, 
broadband, roads, and other utilities) in their communities to support 
economic development. Tribes have also used this funding to build 
public facilities, support small local businesses, provide public 
services, and rehabilitate homes for low- and moderate-income Tribal 
members. Like the IHBG program, when carrying out these activities, it 
is common for Tribes to use these funds to employ force account crews 
made up of local Tribal members and young people learning a trade or 
skill.
    HUD recognizes that CDFIs have played an important role in bringing 
new capital to tribal and underserved populations. Currently, there are 
a total of 11 CDFIs, including six Native CDFIs, that have been 
approved as lenders under the Section 184 Indian Home Loan Guarantee 
program and that have extended mortgage credit to Native American 
borrowers. Some of these CDFIs offer Section 184 guaranteed loans in 
multiple states. HUD will also continue to work on ways to encourage 
CDFIs to participate in its programs and looks forward to collaborating 
with its partners at the CDFI Fund, Native CDFI groups, and others.
Indian Housing Block Grants
    There are several federal programs that provide housing assistance 
to Native Americans, including the Indian Housing Block Grant program. 
These block grants can be leveraged to develop affordable rental 
housing and promote homeownership for low-income Native American 
households. Indian Housing Block Grants can also be combined with other 
funding sources like LIHTC to increase the supply of affordable 
housing.
    Tribes in Washington state and across the country desperately need 
more affordable housing. For example, the Spokane and Nooksack 
reservation in my state have vacancy rates of zero percent.
    Unfortunately, the President's Budget for Fiscal Year 2020 cuts 
funding by $44 million (6.5 percent cut) for Indian Housing Block 
Grants.
    The Senate Appropriations Subcommittee on Transportation, Housing 
and Urban Development and Related Agencies provide a $220 million 
increase for Indian housing, including an increase of $48 million for 
formula grants, $100 million for competitive grants, and $65 million 
for Indian Community Development Block grants.

    Question 2. How would the Administration's budget proposals impact 
Tribes' capacity to develop affordable housing and promote 
homeownership?
    Answer. Under the President's budget request, Indian Housing Block 
Grants (IHBG) would be funded at $600 million in Fiscal Year 2020. At 
this level, HUD can run the IHBG allocation formula and allocate 
funding to all Indian tribes and TDHEs while avoiding anomalous 
allocations. The program has been at level funding since its inception.
    HUD published a Notice of Funding Availability in 2019 and competed 
approximately $200 million in additional IHBG competitive funding. 
Tribes and TDHEs proposing to carry out construction, rehabilitation, 
and infrastructure projects will receive priority. HUD expects to 
announce awards soon. These grants will help address the severe 
shortage of affordable housing and severe overcrowding by facilitating 
housing construction and rehabilitation across Indian Country. 
Moreover, both the Senate and House Fiscal Year 2020 appropriations 
bills propose a third $100 million pot of IHBG competitive funding, 
meaning HUD expects to administer another IHBG competition shortly 
after the Fiscal Year 2020 Appropriations Act is enacted.
    In addition to these resources, HUD works to promote the Title VI 
Loan Guarantee program--partly because the program leverages non-
federal funds and, in turn, allows limited taxpayer dollars to go much 
further. HUD also provides technical assistance to Indian tribes and 
TDHEs and shares best practices to help them build capacity to find 
creative ways to finance complex projects and promote homeownership.
    These resources will all help Indian tribes and TDHEs as they work 
to meet the needs of their communities.

    Question 3. How would you improve this block grant program?
    Answer. According to a 2010 study conducted by the Government 
Accountability Office, Indian tribes generally view the IHBG program as 
effective. Congress has enacted statutory amendments to the Native 
American Housing Assistance and Self-Determination Act of 1996 
(NAHASDA) multiple times over the years. Additionally, HUD has engaged 
in four separate rounds of negotiated rulemaking to improve and 
strengthen program requirements and the allocation formula used to 
distribute funding to all Indian tribes and TDHEs across the country. 
Nevertheless, HUD recognizes there are statutory and regulatory 
barriers that remain and should be addressed by Congress, HUD, and its 
federal partners.
    The Department supports the reauthorization of NAHASDA. As Congress 
considers the reauthorization of the Act, which expired in 2013, HUD 
supports statutory changes that make Indian tribes and TDHEs eligible 
for Housing Counseling grants, strengthen HUD's oversight authority to 
ensure Tribes and TDHEs spend their annual block grants in a timely 
manner, and expand HUD's authority to address the unlawful expenditure 
of grant funds effectively. Additionally, HUD supports changes to the 
Section 184 program's authorizing statute. Specifically, changes that 
would authorize HUD to require lenders to indemnify the Department for 
losses caused by Section 184 loans involving fraud or misrepresentation 
by the lender. The Department also supports changes to allow the 
termination of lenders that are bad actors and that engage in fraud and 
misrepresentation under the Section 184 program. HUD looks forward to 
working with the Senate Committee on Indian Affairs on any legislation 
designed to improve the IHBG program.

    Question 4. If enacted, how will these additional resources help 
address the affordable housing crisis for Native Americans?
    Answer. The IHBG formula is dispersed to Indian tribes and TDHEs 
using an allocation formula that provides funds based on need as well 
as funding to operate and maintain Formula Current Assisted Stock 
previously developed under the U.S. Housing Act of 1937. Any additional 
IHBG funding would be disbursed to Indian tribes and TDHEs as part of 
their annual formula grants. A Tribe would then determine how best to 
utilize the additional funds, which can support construction of new 
housing, rehabilitation of housing, downpayment assistance, 
infrastructure, rental assistance, and housing services.
    If enacted, the IHBG competitive funding would likely be used 
primarily to fund construction, rehabilitation, and infrastructure 
projects to support additional housing in tribal communities. As a 
result of the first round of IHBG competitive grants, HUD anticipates 
that approximately 1,200 new units will be built across Indian Country. 
During this first ever round of the competition, HUD received over 190 
applications from Indian tribes and TDHEs. As discussed above, HUD 
anticipates additional IHBG Competitive funding to be enacted in FY2020 
and will administer a competition that will fund strong projects and 
result in the construction of additional new housing units in tribal 
communities.
    If enacted, the ICDBG funding would be awarded competitively and 
fund a wide variety of community development, economic development, and 
housing projects. Eligible uses of these funds include acquisition of 
property, rehabilitation of housing, installation of safe drinking 
water and wastewater disposal systems, construction of Head Start and 
other childcare facilities and of health clinics, removal of lead-based 
paint and mold, and improvement of public services and facilities. $4 
million would be set aside to address imminent threats to health and 
safety.
                                 ______
                                 
 Response to Written Questions Submitted by Senators Cantwell, Cortez 
                   Masto, and Udall to Hon. Max Zuni
                             housing supply
    Question 1. What Is the biggest obstacle to homeownership and 
affordable housing?
Lack of Financial Institutions
    There are no banks on the lsleta Pueblo Reservation. There are also 
no credit unions (Policy Map, 2019). This means there are no 
opportunities to bank for lsleta Pueblo members on Pueblo land. Tribal 
members must travel off the Reservation to reach a bank. When Tribal 
members do travel offReservation. For our consumer loans, our borrowers 
often have low credit scores. TLS tracks this data. In FY15, 16, 17, 
and 18 respectively, the average credit score for a consumer loan 
client was 536, 547, 569, and 584. If FY19, the average credit score of 
our consumer loan borrowers has been 531. These Tribal members are not 
afforded the opportunity to step onto the first rung of the ladder by 
off-Reservation banks due to low credit scores stemming from lack of 
access to capital. We are the only financial institution that exists 
for the sole purpose of serving Pueblo members and in its short 
history, Tiwa has closed more home loans than Section 184, VA, and USDA 
loans combined. helping them to realize their asset-building goals. 
Importantly, we are based on ls1eta Pueblo lands.
Housing
    On lsleta Pueblo Reservation, the vacancy rate (the percentage of 
houses available for rent or purchase) is 0 percent. This is a result 
of the extreme lack of housing available on lsleta Pueblo lands. This 
lack of supply means there are zero homes available for Pueblo members 
unless homes are newly built. Since FY15, 50 percent of our home loans 
have been new construction loans. In other words, we provide the 
financing for the construction of the home, and for the purchase of the 
home. We create housing where there is none.
Lack of Housing
    Secondary data shows a tack of housing available for lsleta Pueblo 
families. This homeowner vacancy rate--which quantifies the percentage 
of homeowner inventory ready for sale--accurately demonstrates the lack 
of housing available. This rate is 0 percent for lsleta Pueblo. Since 
FY12, 75 percent of our home loans (40 loans) have been new 
construction loans. This means we have created 40 new homes for Tribal 
members to move into. We fund the construction of new homes to create 
homes for Tribal members to move into.
Lack of Access to Education
    A final indicator of economic distress is the lack of education 
provided to Pueblo members. Educational attainment rates reflect this 
reality. ln the United States, 39.9 percent of the population over 25 
has high school as their highest level of education. In New Mexico the 
same statistic is 41.4 percent. On the lsleta Pueblo Reservation, the 
rate is 53.1 percent (ACS, 2017 5-Year Estimates). The percentage of 
the population with a bachelor's degree or higher is 30.9 percent for 
the U.S., 26.9 percent for NM, and 8.8 percent for lsleta Reservation. 
There is a general educational attainment discrepancy for those on-
Reservation compared to those off-Reservation.
A. Tiwa borrowers. many who are low income. are unable to receive 
        federal funds to rehabilitate homes on flood plains.

   A large part of lsleta's residential areas are in flood 
        plains.

   HUD Indian Housing Block Grant (IHBG) and Indian Community 
        Development Block Grant (ICDBG) funds may be used as down 
        payment assistance. Low income families are eligible for IHBG 
        and ICDBG funding.

   The Federal Flood Disaster Protection Act of 1973 \1\ (the 
        ``Act'') prohibits the use of federal funds, including IHBG and 
        ICDBG, on floodplains unless a community or tribe participates 
        in the National Flood Insurance Program (NFIP) and purchases 
        flood insurance.

    \1\ 42 U.S.C. 41Q6(a).
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   Flood insurance is expensive. The inability of low income 
        borrowers to use federal funds as down payment assistance for 
        the rehabilitation of homes on floodplains, many which are in 
        substandard and dilapidated condition, makes it prohibitive to 
        qualify for a loan.

   Further, flood mapping in lsleta was done without detailed 
        studies to determine Base Flood Elevations (BFEs), which are 
        necessary to obtain certified elevations for insurance. 
        Obtaining flood insurance will require a borrower to engage a 
        surveyor to conduct detailed studies to determine BFEs.

   A community (including a tribe) that participates in the 
        NFIP is required to adopt flood standards on floodplains as 
        established by the NFIP and enforce these standards. Adopting 
        an approved NFIP flood ordinance is a burdensome and costly 
        process that requires a tribe to hire a certified flood plain 
        manager, develop and enforce flood standards, require certified 
        elevations when building or rehabilitating on floodplains, and 
        maintain tribal records on all new home construction and 
        rehabilitation.

   Few tribes participate in the NFIP likely due to the 
        administrative, technical, and financial burdens imposed by the 
        NFIP.

   States are exempt from the Act's requirement that a 
        community join the NFIP before using federal funds on 
        floodplains. The state exemption applies to federal affordable 
        housing funds provided to states, including HOME funds and CDBG 
        funds

   A provision in the Native American Housing Assistance and 
        Self-Determination Act of 1996 (NAHASDA) Reauthorization Bill 
        giving tribes the same exemption already enjoyed by states, 
        would allow tribes to use IHBG and other federal affordable 
        housing funds on floodplains utilizing a tribe's mitigation 
        plan, without requiring a tribe to join the NFIP. This would 
        allow tribes and their Tribally Designated Housing Entities to 
        provide down payment assistance funds to low income borrowers 
        for home construction or rehabilitation.

   We ask for your support of the NAHASDA Reauthorization bill 
        and an exempt proviison for tribes in the bill.

B. Federal land laws and policies applicable to tribal trust lands.

   Federal land laws applicable to trust lands, found at 25 USC 
        81 and the BIA leasing regulations (25 CFR 162) require BIA 
        approval of residential leases and mortgages. The BIA lease and 
        mortgage approval and recording process is lengthy and 
        cumbersome. Tiwa has waited 12 months for a Title Status Report 
        (TSR), 12 months for BIA approval of a lease or mortgage, and 
        24 plus months before receiving the recorded lease and mortgage 
        from BIA.

   The time it takes to close a loan on Indian trust lands 
        deters many lenders.

   While HEARTH shortens the timelines by allowing tribes to 
        enact leasing laws and approve specific types of land leases, 
        including residential leases, without further approval by BIA, 
        it's an expensive law for tribes to implement due to a tribe 
        taking on BIA's role of reviewing and enforcing leases and 
        mortgages, preparing surveys, and conducting environmental 
        reviews.

   lsleta enacted its leasing law in 2018. BIA approved the law 
        in April 2019.

   lsleta is in the process of planning the implementation of 
        this law, which will require identifying funding to hire a 
        leasing officer and contract with surveyors and environmental 
        review firms to conduct environmental reviews.

   Once implemented, Tiwa anticipates that the time for closing 
        on leasehold mortgages will be cut by more than half. The 
        ability to bypass the lengthy BIA review and approval process 
        will allow Tiwa and other lenders to close on mortgages within 
        weeks versus months.

   HEARTH doesn't address the TSR process which must still be 
        conducted by BIA. While some tribes have taken on recording as 
        a function, it is an expensive endeavor and one which requires 
        an expensive database compatible with the BIA titling system.

   While we have discussed the ability of the BIA titling 
        system to become privatized, we realize that this is a 
        discussion that must involve BIA.

   We ask for your support In helping tribes find a solution to 
        this issue.

    Question 2. How would you recommend that we address that obstacle?
    Answer. Funding Available to Tiwa:

   Tiwa receives financial support from the NACA Program, the 
        Pueblo of lsleta, and loans from other non-profits. The NACA 
        Funds are vital to Tiwa's economic development initiatives, but 
        insufficient for all Native CDFls competing for the funds. As 
        of 2018, there were 73 certified Native CDFIs, with many other 
        working towards becoming certified. Thirty-Eight Native CDFIs, 
        including Tiwa, benefited from the $15.3 million in grants in 
        FY 2018.

   It recently borrowed money from Oweesta, another Native 
        CDFI, Investors, Tamalpais Trust, and Kalliopeia Foundation.

   Capital also comes from the revenue from the loan 
        portfolios.

   Selling our loans on the secondary market to Fannie Mae 
        would be an option to help Tiwa increase additional Capital, 
        this is impossible because of FEMA, we need your help to find a 
        solution to this.

   Tiwa's primary challenge is lack of funding to meet the 
        lending needs of its community, and consistently seeks funds.

   Increased funding for the NACA Program is vital to economic 
        growth on Indian reservations.

   We ask for your support of the NAHASDA Reauthorization bill 
        and an exempt proviison for tribes in the bill.

    Question 3. What role does rental housing play in addressing the 
affordable housing?
    Answer. On lsleta Pueblo Reservation, the vacancy rate (the 
percentage of houses available for rent or purchase) is 0 percent. This 
is a result of the extreme lack of housing available on lsleta Pueblo 
lands. This lack of supply means there are zero homes available for 
Pueblo members unless homes are newly built. Since FY15, 50 percent of 
our home loans have been new construction loans. In other words, we 
provide the financing for the construction of the home, and for the 
purchase of the home. We create housing where there is none.
                 approval of tribal leasing regulations
    Question 4. Please describe the Pueblo's experience implementing 
the Act and any challenges to implementation that you suggest could be 
addressed by either the Department of the Interior or Congress.
    Answer.

   Environmental Review Procedures have been a challenge. 
        lsleta is in the process of planning the implementation of this 
        law, which will require identifying funding to hire a leasing 
        officer and contract with surveyors and environmental review 
        firms to conduct environmental reviews.

   Once implemented, Tiwa anticipates that the time for closing 
        on leasehold mortgages will be cut by more than half. The 
        ability to bypass the lengthy BIA review and approval process 
        will allow Tiwa and other lenders to close on mortgages within 
        weeks versus months.

   HEARTH doesn't address the Title Status Reports and 
        Environmental Review process which must still be conducted by 
        BIA. While some tribes have taken on recording as a function, 
        it is an expensive endeavor and one which requires an expensive 
        database compatible with the BIA titling system and hiring 
        firms are costly to conduct Environmental reviews under CFR 
        Part 58 (HUD regulations.).

   While we have discussed the ability of the BIA titling 
        system to become privatized, we realize that this is a 
        discussion that must involve BIA.

                             native cdfis.

    Question 5. As a Native Community Development Financial 
Institution, please describe how Tiwa addresses lending risk factors, 
such as poor or no credit history, that traditional mortgage lenders In 
Indian Country are typically unable to accommodate.
    Answer. Native CDFls are unique lenders:
    Tiwa, like other Native CDFls, is unique in the following features:

   All its lending products have flexible underwriting 
        criteria. Applicants are not required to have credit history.

   Home loans, have a maximum loan to value ratio of 100 
        percent.

   Mortgage loans do not require a down payment.

   Home loans have low interest rates equal to the 30-year 
        Treasury bond rate (2.12 percent as of October 3, 2019) plus 
        1.375.

   Closing costs and origination fees can be financed in the 
        loan amount.

   Tiwa provides homeownership and financial education and 
        small business workshops, changing the lives of future 
        generations and the economic picture in lsleta. Here is a story 
        of one such family:

   Carrie (not her real name), a member of the lsleta Pueblo, 
        improved her credit score by 87 points in less than two years 
        with the help ofTiwa. As a teen parent, Carrie didn't realize 
        the impact that her credit score could have on her life and her 
        ability to access credit. Now, as a mother of five children and 
        the only working member of her household, she sought a loan 
        from Tiwa for extra help during the holidays and was provided 
        with the credit counseling and education that would allow her 
        to create a positive payment history and rebuild her credit. 
        Not only did Carrie learn how to take action to positively 
        impact her score, she has started educating her children on the 
        importance of credit scores. Without the loan and counseling 
        from Tiwa, Carrie says she wouldn't be where she is today.

   Tiwa requires all borrowers to either take a financial 
        education class or one-on-one counseling provided by Tiwa. 
        These classes are held annually and twice a day for 1 + hours. 
        The classes consist of 4 weeks of Budegting, Savings, Relating 
        with money with your spouse or accountable partner,and dumping 
        debt. Fifth week on reviewing your credit report and 
        collections. Six week of Mortgages, Foreclosures, review of 
        Debt to income and Loan to value ratios. Seven and Eighth week 
        of reviewing 401Ks, Roth IRA's and Mutual funds. Nineth, Tenth, 
        and Eleven week is review on being a smart consumer.

   Tiwa collaborates with the lsleta Pueblo Housing Authority 
        and Pueblo of lsleta departments, such as the Social Services 
        Department, the Library, the Elderly Center, and the 
        Scholarship Office, to market its financial products and 
        development services.

   Tiwa markets its products and services in the lsleta Pueblo 
        newsletter and posts its publications at public places in 
        lsleta.

   Tiwa has a website, www.tiwalending.org. where it posts its 
        products and upcoming homeownership financial education 
        workshops.

   Tiwa works closely with its borrowers to ensure they remain 
        successful borrowers. For example, Tiwa contacts delinquent 
        borrowers by telephone to find out their situation and work 
        with them to resolve the delinquency while the delinquency is 
        still manageable. In a pre-foreclosure situation, Tiwa worked 
        closely with the family and the Pueblo of lsleta to identify a 
        family member who could assume the loan. Most recently, Tiwa is 
        working with the family of a deceased borrower to identify a 
        qualified family member who can assume the loan.

    Question 6. What amount of NACA Program funding per fiscal year 
would Tiwa consider sufficient to meet Its needs.
    Tiwa's primary challenge is lack of funding to meet the lending 
needs of its community. and consistently seeks funds. Tiwa would like 
to receive at least $1,000,000.00 from the FA NACA program, this would 
allow Tiwa to provide at least 8 more homes to existing and new 
homeowners. Since 2009 historically Tiwa Lending Services has closed 
$7,091,717 with an average loan amount of $118,195.28. Tiwa has a 
waiting list currently and can not keep up with the demand for funds. 
nwa can't advertise funds due to the money being committed before they 
have the funds. Tiwa is working with USDA rural, RCAC, and 184 lenders 
to help with the Capital. Tiwa is now looking into building a 
partnership with the Federal Reserve Bank. The barriers still are there 
especially with FEMA and BIA.

    Question 7. How prevalent Is manufactured housing in your 
community? How do homeowners finance their manufactured home purchase?
    Answer. Refer to answer under question numbered 5.

    Question 8. What policy recommendations for the manufactured 
housing market should we consider to lower the cost of mortgage for 
homebuyers, especially Native Americans?
    Answer. Lower the down payment for all borrowers. Loan to Value 
needs to be addressed. No other recommendations at this time.

    Question 9.. The Federal Home Loan Bank also has an affordable 
housing mission. What investments In Native American homeownership has 
the Federal Home Loan Bank made? Is there a regional Bank that is a 
leader in serving Native American homebuyers and reservation 
communities?
    Answer. Tiwa Lending Services is exploring these partnerships.
    Thank you.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                            Darryl Lacounte
Approval of Tribal Leasing Regulations
    Question 1. Congress passed the Helping Expedite and Advance Tribal 
Homeownership (HEARTH) Act of 2012 to enhance Tribes' self-governance 
over Tribal lands and promote the efficient leasing of those lands for 
housing and business purposes. To exercise the enhanced authority 
provided by the HEARTH Act, Tribes must first adopt leasing regulations 
and submit them for approval to the BIA. According to the BIA's 
website, 45 Tribal leasing regulations have been approved by the BIA's 
Office of Trust Services since 2013. We understand that only three of 
the 45 regulations were approved in 2019, and that 26 applications are 
still awaiting action. What steps are the BIA taking to address this 
backlog?
    Answer. BIA is directing additional resources to the program and 
working to centralize the leasing regulation review process. First, the 
BIA is working to fill the HEARTH Act coordinator position vacancy. 
Once the vacancy is filled, the leasing regulation review process will 
be streamlined from BIA field offices to the central office 
responsibility to address pending reviews and move them forward for a 
decision.
Expediting Title Status Reports
    Question 2. You indicated in your hearing testimony that the BIA is 
currently developing the Enterprise Land and Resource Data Warehouse to 
integrate its various business subsystems, including the Trust Asset 
and Account Management System (TAAMS), into one platform.
    How do you expect this change to streamline the BIA's process of 
issuing Title Status Reports (TSR)? Will it address the reported delays 
in issuance?
    Answer. The BIA Enterprise Land and Resource Data Warehouse will 
allow lenders to check on the status of their mortgage applications and 
to contact the BIA, improving communication. The TSRs are one of the 
items required in the mortgage application process. The portal will 
provide transparency in the issuance process by showing when a TSR 
request is made and when the certified TSR is received from Land Titles 
and Records Office.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                            Darryl Lacounte
Community Development Financial Institutions
    Question 1. When the Community Development Financial Institutions 
(CDFI) Fund was created, CDFis had limited access to private capital. 
Over the past two decades, the CDFI industry has matured and extends 
credit and provide financial services to underserved communities. 
Despite this record of success, the President's Budget proposes to 
eliminate funding for Community Development Financial Institutions 
(CDFI) Fund discretionary grant and direct loan programs.
    Nearly $8.7 million has been awarded to Washington state Native 
awardees. CDFI investments have also generated $12 in private capital 
for every dollar in CDFI grants. CDFis are an important resource to 
provide economic development in underserved communities and provides 
assistance that is leveraged 12 times over.
    What programs does HUD or the Bureau of Indian Affairs have that 
provide the same or greater level of support for economic development 
in these communities?
    Answer. In 2018, Assistant Secretary--Indian Affairs Tara Sweeney 
hosted the first ever Indian Affairs-Native CDFI Network roundtable at 
the Department of the Interior. The Department continues to collaborate 
with the Native CDFI Network on innovative ways to provide capital 
access for Native CDFis and to attract the right types of investments 
into Indian Country.
    Additionally, the Office of the Assistant Secretary--Indian Affairs 
provides technical assistance and funding that supports economic 
development for American Indian tribes, communities, and individuals. 
The Office of Indian Energy and Economic Development (IEED) provides 
funding opportunities including:

   The Native American Business Development Institute (NABDI) 
        grant program, within the IEED Division of Economic 
        Development--NABDI is designed to help Tribes retain qualified, 
        impartial, third party consultants to conduct feasibility 
        studies on economic development proposals, ideas, and 
        technologies.

   The Tribal Energy Development Capacity (TEDC) grant program, 
        within the IEED Division of Energy and Mineral Development 
        (DEMD)--TEDC helps Tribes assess, develop, and secure the 
        organizational and technical capacity needed to manage energy 
        resources on Indian land and properly account for resulting 
        energy production and revenues.

   The Energy and Mineral Development Program (EMDP) within the 
        IEED DEMD--The EMDP provides funding for the assessment and 
        marketing of tribal energy and mineral resources.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Catherine Cortez Masto 
                           to Darryl Lacounte
    Question 1. Does the BIA get involved in financing manufactured 
housing? How do homeowners finance their manufactured home purchase?
    Answer. The BIA reviews all mortgage applications for compliance 
with statutes, policies, and regulations.

    Question 2. What policy recommendations for the manufactured 
housing market should we consider to lower the cost of mortgage for 
home buyers, especially Native Americans?
    Answer. Whether the cost of a mortgage may be lowered is within the 
lender's discretion.

    Question 3. The Federal Home Loan Bank also has an affordable 
housing mission. What investments in Native American homeownership has 
the Federal Home Loan Banks made? Is there a regional Bank that is a 
leader in serving Native American homebuyers and reservation 
communities?
    Answer. We are not aware of a regional bank that is considered a 
leader in serving Native American homebuyers. However, nationwide 
lenders most utilized for Native American home buyers include 1st 
Tribal Lending and Bank2, particularly for HUD Section 184 home loans.