[Senate Hearing 117-657]
[From the U.S. Government Publishing Office]


   
   
   
   
   
   
   
   
   
 
                                                        S. Hrg. 117-657


HOUSING FOR NATIVE AMERICANS: REVIEW OF FEDERAL PROGRAMS, BARRIERS, AND 
                             OPPORTUNITIES

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

                                HEARING

                               before the

                            SUBCOMMITTEE ON
           HOUSING, TRANSPORTATION, AND COMMUNITY DEVELOPMENT

                                 of the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                                   ON

     EXAMINING HOUSING INSECURITY IN NATIVE COMMUNITIES AND THEIR 
            EXPERIENCES WITH FEDERAL INDIAN HOUSING PROGRAMS

                               __________

                              MAY 27, 2021

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs


                Available at: https: //www.govinfo.gov / 
                             _________
                              
                 U.S. GOVERNMENT PUBLISHING OFFICE
                 
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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                     SHERROD BROWN, Ohio, Chairman

JACK REED, Rhode Island              PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey          RICHARD C. SHELBY, Alabama
JON TESTER, Montana                  MIKE CRAPO, Idaho
MARK R. WARNER, Virginia             TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts      MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland           THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada       JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota                BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona              CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia                  JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia             KEVIN CRAMER, North Dakota
                                     STEVE DAINES, Montana

                     Laura Swanson, Staff Director

                 Brad Grantz, Republican Staff Director

                      Cameron Ricker, Chief Clerk

                      Shelvin Simmons, IT Director

                    Charles J. Moffat, Hearing Clerk

                                 ______

   Subcommittee on Housing, Transportation, and Community Development

                      TINA SMITH, Minnesota, Chair

          MIKE ROUNDS, South Dakota, Ranking Republican Member

JACK REED, Rhode Island              RICHARD C. SHELBY, Alabama
ROBERT MENENDEZ, New Jersey          MIKE CRAPO, Idaho
JON TESTER, Montana                  BILL HAGERTY, Tennessee
CATHERINE CORTEZ MASTO, Nevada       CYNTHIA LUMMIS, Wyoming
CHRIS VAN HOLLEN, Maryland           JERRY MORAN, Kansas
JON OSSOFF, Georgia                  KEVIN CRAMER, North Dakota
RAPHAEL WARNOCK, Georgia             STEVE DAINES, Montana

                Tim Everett, Subcommittee Staff Director

Caroline Hunsicker, Senior Policy Advisor for Housing, Transportation, 
                           and Native Affairs

          Andrew Rothe, Republican Subcommittee Staff Director

                                  (ii)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  

                            C O N T E N T S

                              ----------                              

                         THURSDAY, MAY 27, 2021

                                                                   Page

Opening statement of Chair Smith.................................     1

Opening statements, comments, or prepared statements of:
    Senator Rounds...............................................     3

                               WITNESSES

Dante Desiderio, Chief Executive Officer, National Congress of 
  American Indians, Washington, DC...............................     5
    Prepared statement...........................................    24
    Responses to written questions of:
        Senator Cortez Masto.....................................    45
Adrian Stevens, Acting Chairman of the Board of Directors, 
  National American Indian Housing Council; Executive Director, 
  Seneca Nation Housing Authority; and Member, Seneca Nation, 
  Irving, New York...............................................     7
    Prepared statement...........................................    29
    Responses to written questions of:
        Senator Cortez Masto.....................................    45
Alene Tchourumoff, Senior Vice President, Community Development 
  and Center for Indian Country Development, Federal Reserve Bank 
  of Minneapolis, Minneapolis, Minnesota.........................     9
    Prepared statement...........................................    35
    Responses to written questions of:
        Chair Smith..............................................    47
        Senator Cortez Masto.....................................    50
        Senator Lummis...........................................    57
Michael Goze, Chief Executive Officer, American Indian Community 
  Development Corporation (AICDC), Minneapolis, Minnesota; 
  Chairman, Board of Commissioners, Ho-Chunk Housing and 
  Community Development Agency (HHCDA), Tomah, Wisconsin; and 
  Member, Ho-Chunk Nation of Wisconsin...........................    11
    Prepared statement...........................................    41
    Responses to written questions of:
        Senator Cortez Masto.....................................    59
Eric Shepherd, Executive Director, Sisseton-Wahpeton Housing 
  Authority, Sisseton, South Dakota; and Member, Sisseton 
  Wahpeton Oyate.................................................    12
    Prepared statement...........................................    42
    Responses to written questions of:
        Senator Cortez Masto.....................................    60

                                 (iii)

 
HOUSING FOR NATIVE AMERICANS: REVIEW OF FEDERAL PROGRAMS, BARRIERS, AND 
                             OPPORTUNITIES

                              ----------                              


                         THURSDAY, MAY 27, 2021

                               U.S. Senate,
  Committee on Banking, Housing, and Urban Affairs,
    Subcommittee on Housing, Transportation, and Community 
                                               Development,
                                                    Washington, DC.
    The Subcommittee met at 10 a.m., via Webex, Hon. Tina 
Smith, Chair of the Subcommittee, presiding.

             OPENING STATEMENT OF CHAIR TINA SMITH

    Chair Smith. Today's hearing of the Subcommittee on 
Housing, Transportation, and Community Development will come to 
order. The hearing will be in virtual format.
    This is my first hearing as Chair of this Subcommittee, and 
I am so glad to be joined by Ranking Member Rounds from South 
Dakota. Senator Rounds and I have worked together on Native 
housing issues for several years, and when we started talking 
earlier this year about our shared interest in this 
Subcommittee, Native housing issues immediately came to mind as 
a topic for both of us. So I am looking forward to working with 
Senator Rounds on this Subcommittee, this Congress, as we 
examine a number of important housing, transportation, and 
community development issues.
    We are joined today by a panel of witnesses who will share 
their work to address housing insecurity in Native communities 
and their experiences with Federal Indian housing programs, and 
this topic is personal to me.
    Minnesota is home to 11 sovereign Tribal Nations and large 
indigenous populations in the Twin Cities, Duluth, and Bemidji, 
and I have had the great privilege of visiting and meeting with 
tribal leaders from Minnesota to hear firsthand what they see 
as challenges and opportunities in their communities.
    In 2019, I held a statewide listening tour on housing 
issues, and as part of that tour, we held four tribal-specific 
sessions. A constant, consistent message that I heard across 
all four listening sessions with Native leaders was the need 
for more supportive housing and culturally specific 
programming, particularly to support Native people experiencing 
homelessness.
    Current and historical trauma amongst Native Americans 
contributes to the disproportionately high prevalence of 
homelessness amongst these communities. And they told me that 
without culturally specific programming and trauma-informed 
care, this will not work.
    Native people experiencing homelessness struggle to access 
services, of course, and to maintain housing stability. It is a 
difficult challenge, and tribal leaders are using scarce 
resources to try to address the complicated challenges of 
overcrowded homes, cost-burdened renters, and low home 
ownership rates on tribal lands.
    Consider that in Minnesota 49 percent of Native households 
own their own homes compared to 76 percent of White households. 
Nationally, this home ownership disparity exists as well, with 
about 51 percent of Native households owning a home compared to 
about 73 percent of White households.
    Home ownership requires access to credit, but in 2019 
lenders in Minnesota denied almost 25 percent of Native 
American mortgage applications. By contrast, lenders denied 
only 6 percent of White applicants.
    Inequities in mortgage lending are only one factor 
contributing to disparities in home ownership. We also know 
that legal barriers to lending on trust land, the lack of 
intergenerational wealth, and underinvestment in Federal Indian 
housing programs is also an issue.
    In this hearing, we have a platform to elevate the voices 
of those struggling with housing insecurity and those working 
to combat it in communities from Fond du Lac, Minnesota, to the 
Pine Ridge Reservation in South Dakota, to Montana, Nevada, and 
all over the country.
    The last time the Banking, Housing, and Urban Affairs 
Committee held a hearing dedicated to these issues was during 
the 112th Congress when fewer than half of the Members of this 
Subcommittee were even Members of the Senate. I am hopeful that 
today presents an opportunity for this Committee to rededicate 
ourselves to meeting the treaty and moral obligations of our 
Nation when it comes to ensuring that Native Americans have 
access to safe, affordable, and stable housing.
    We have a once-in-a-generation moment to address the deep 
systemic barriers to housing in Indian country, and I hope that 
you all will join me in this effort. Together, we can help 
Native families across the country secure, safe, stable, and 
affordable housing, and we can finally give tribes the 
resources that they need, resources they are already owed, so 
that we can find solutions that work in the community. It is on 
us to prove to Tribal Nations that the Federal Government is 
ready to live up to its commitments and to play a role in 
reducing homelessness, providing housing assistance, and 
reducing disparities in home ownership.
    Before I turn to Senator Rounds, I would just like to say a 
brief word about how I view the work of this Subcommittee. 
Housing and transportation issues we know touch the lives of 
every single American. If you do not have a safe, affordable 
place to live, nothing else in your life works. It is nearly 
impossible to focus on your education, your job, or your family 
if you do not have a good, stable place to live. And if you 
cannot get where you need to go safely, affordably, and 
reliably, it is pretty hard for anything else in your life to 
work either.
    Right now, too many families are struggling to find 
affordable housing and to get access to transportation, 
especially families of color and Native people. This has 
happened for a range of reasons: the history of unfair and 
inequitable Federal housing policies, lack of funding and a 
lack of understanding, sometimes just a lack of attention. So I 
intend to use this Subcommittee to examine these issues and to 
do all that we can to make sure that housing and transit 
policies work for all families. I cannot wait to roll up my 
sleeves and to get to work, and I look forward to hearing from 
our witnesses today and from the Members of this Subcommittee.
    And now I will turn to Senator Rounds for his opening 
statement.

            OPENING STATEMENT OF SENATOR MIKE ROUNDS

    Senator Rounds. Thank you, Madam Chair, and thank you to 
our witnesses for taking the time to attend today's hearing. I 
look forward to hearing from all of you.
    Let me just begin, though, by thanking the Chair. Senator 
Smith and I are not only working on housing issues, we are 
working on a number of our rural areas, and sometimes that is 
not something that we talk about with regard to items that make 
news and the headlines or anything. But there are a lot of us 
that try to work across the lines back and forth, and in the 
Senate it requires bipartisan support for any type of activity 
to move forward. Senator Smith and I are working on ag issues; 
we are working on water development issues, rural economic 
issues. And as the Chairwoman has said, this is an area that we 
both agree is a place where we really can make a difference in 
our home States and for rural parts of our country.
    Today this Committee will examine an issue of great 
importance to me and to so many in my home State of South 
Dakota and one that this Committee has not held a hearing on in 
nearly 10 years. That issue is providing safe, affordable, and 
stable housing for Native American communities throughout the 
United States. I hope this is one of multiple opportunities 
that we will have to address this matter this Congress and work 
together across the aisle on solutions to the policy challenges 
in this area.
    This issue not only impacts the lives of thousands of South 
Dakotans, but also millions more of our tribal members across 
the United States. In South Dakota, we have nine federally 
recognized tribes, each of which faces various and unique 
tribal housing concerns. One of these tribes is represented 
here today, and I would like to introduce Mr. Eric Sheperd from 
the Sisseton Wahpeton Oyate in South Dakota. Eric, thank you 
for being with us today. You might want to just wave at 
everybody, Eric.
    Recent data shows that housing conditions for Native 
American households are substantially worse than U.S. 
households. In fact, Native Americans have some of the greatest 
housing needs in the United States. That is according to the 
National Low Income Housing Coalition, the reasons for this 
being they face overcrowding, high poverty rates, lack of 
plumbing, inadequate heating, and other severe infrastructure 
issues. And that is if they are even able to access housing 
options at all. This is a serious problem, and now is the time 
to fix it.
    In addition, there are other fundamental challenges that 
make home ownership more difficult for Native Americans. The 
complicated legal nature of Tribal Trust Land can make it 
exponentially more difficult to lend and borrow on land in 
Indian country. While legislation that Senator Smith and I 
partnered on in the past has resulted in a number of 
complications, but there is clearly more work to do.
    The FDIC also reports that Native American and Alaskan 
Native American individuals are unbanked at triple the average 
of other Americans. Not having access to financial services 
makes owning and even renting a home all that much more 
difficult.
    I hope today's hearing will also shed light into how 
housing challenges are exacerbated by other legal and economic 
issues.
    Even before the COVID-19 pandemic, Native American housing 
programs already in existence have failed to adequately serve 
the needs of our poorest tribal communities, especially in more 
rural areas across the country. It is my hope that Congress can 
also make progress this year on reauthorization of the Native 
American Housing Assistance and Self-Determination Act, or 
NAHASDA, and I look forward to hearing our witnesses' thoughts 
on reauthorizations, reforms, and alternative funding options 
for Native housing in light of the recent pandemic.
    These past few months, the COVID-19 pandemic has pushed 
more Native Americans living on reservations to seek home 
ownership, but longstanding barriers continue to prevent this. 
That is why I partnered together once again with Senator Smith 
on two pieces of legislation, including the Native American 
Housing Affordability Act and legislation reforming the Native 
American Direct Lending Program, both of which I am looking 
forward to discussing today.
    For years, Congress and tribal leaders have worked to 
address these Native American housing issues. There has been a 
range of different approaches and challenges, and we seem to 
have fallen short along the way. While these issues are complex 
and compounded when put into rural settings, there is no excuse 
for the situation which so many of our tribal members face 
every single day just by being or wanting to be at home. It is 
time that we make a concerted effort of stakeholders and in 
consultation with our tribal members to develop solutions that 
meet the needs of our States' growing tribal communities.
    Again, we welcome all of you here today and look forward to 
hearing your testimony about this very important issue, and I 
thank you for attending and participating.
    Thank you, Madam Chair.
    Chair Smith. Thank you so much, Senator Rounds.
    I am now going to introduce our witnesses. I will introduce 
all five witnesses and then turn to each of you to make your 
opening statements.
    We have with us today Dante Desiderio, the chief executive 
officer of the National Congress of American Indians; Adrian 
Stevens, the acting board chair of the National American Indian 
Housing Council, and also the executive director of the Seneca 
Nation Housing Authority and a member of the Seneca Nation; 
Alene Tchourumoff, the Senior Vice President for Community 
Development and the Center for Indian Country Development at 
the Monetary policy Federal Reserve Bank; Michael Goze, the 
chief executive officers of the American Indian Community 
Development Corporation in Minneapolis, Minnesota, and also the 
chair of the Board of Commissioners at the Ho-Chunk Housing and 
Community Development Agency, and a member of the Ho-Chunk 
Nation. Greetings to my fellow Minnesotans. And, also, Eric 
Sheperd, the executive director of the Sisseton-Wahpeton 
Housing Authority in Sisseton, South Dakota. Eric is also a 
member of the Sisseton Wahpeton Oyate community.
    Welcome, and I thank all of your for your willingness to 
speak with us today, and I look forward to hearing from each of 
you. Before you begin your opening statements, just a few 
reminders. Once you start speaking, there will be a slight 
delay before you are displayed on the screen. To minimize 
background noise, please click the mute button until it is your 
turn to speak or ask questions.
    You should all have on your screens a box labeled ``Clock'' 
that will show you how much time you have remaining. And for 
witnesses, I ask you to please keep your opening statements to 
about 5 minutes. You will have the opportunity to have your 
full written statements submitted as part of the record.
    For all Senators, the 5-minute clock applies to your 
questions also. When you have 30 seconds remaining for your 
statements or questions, you will hear a bell ring to remind 
you that your time has almost expired, and it will ring again 
when your time has expired.
    And if there is a technology issue, we will just move to 
the next witness or Senator until that technology issue is 
resolved.
    And to simplify the speaking order, Senator Rounds and I 
have agreed to go by seniority in this hearing.
    I will now turn to Mr. Desiderio for your opening 
statement.

STATEMENT OF DANTE DESIDERIO, CHIEF EXECUTIVE OFFICER, NATIONAL 
                 CONGRESS OF AMERICAN INDIANS,
                         WASHINGTON, DC

    Mr. Desiderio. Thank you, Senator, and good morning, 
Chairwoman Smith and Ranking Member Rounds and Members of the 
Subcommittee on Housing, Transportation, and Community 
Development. This is quite an honor to be present in the Senate 
Banking Committee. On behalf of the National Congress of 
American Indians, as the chief executive officer, I am Dante 
Desiderio, a member of the Sappony Tribe, and we represent the 
largest and oldest organization comprised of sovereign Tribal 
Nations and their citizens.
    So Tribal Nations across the country aim to maintain 
housing infrastructure that improves their citizens' health 
outcomes, sustains their regional economies, and, importantly, 
addresses the growing population with our tribes. And I do want 
to just comment for a second on the idea, Chairwoman Smith, of 
taking a listening tour in Indian country. It is the best way 
to learn about Indian country. And, Senator Rounds, I agree 
that now is the time to fix it.
    For decades, the Federal Government has recognized that its 
trust responsibility to Tribal Nations to provide adequate 
housing has been chronically underfunded. And as a result, our 
tribal communities see overcrowded homes at a rate roughly 
eight times the national average, and over 70 percent of our 
existing housing requires extensive upgrades and repairs.
    In 2017, HUD reported that it will take approximately 
68,000 new units to alleviate overcrowding and replace those in 
grave condition. These disparities increase the vulnerability 
of American Indians and Alaska Natives to the COVID-19 and 
resulted in our communities having at times the highest 
infection, hospitalization, and death rates per capita in the 
United States.
    Today my testimony will focus on impediments and barriers 
facing Tribal Nations and tribally designated housing entities 
when attempting to build and finance housing. Then I will turn 
to recommendations that will allow for construction and 
financing of housing on tribal lands.
    First, I want to address the challenges and barriers of 
lending on trust lands and the burdensome permitting process. 
In 2019, the FDIC found that 16 percent of tribal households 
were unbanked compared to only 5 percent of the general 
population.
    The unique status of trust lands and the lack of education 
of most private lenders makes them reluctant to lend to either 
individual Natives, Tribal Nations, and tribally designated 
housing entities. Further exacerbating this issue, the BIA must 
review all trust land leases and provide verification of 
ownership, which can be delayed for months.
    Second, there is a lack of access to housing tax credits 
for multifamily housing units in Indian country. These tax 
credits are only provided to State governments, who in turn 
have the ability to offer those to Tribal Nations, but often do 
not; or if they do, it is sporadic.
    And, third, while construction costs and inflation continue 
to rise, flat Federal funding on Indian housing programs 
results in a sharp decrease in the amount of affordable housing 
units.
    Finally, while identifying barriers is helpful in 
understanding challenges, it does not always offer a pathway 
forward for creating policy solutions. So I want to offer a few 
solutions.
    One, Congress should increase the access to the Low-Income 
Housing Tax Credit Program and provide tax credits at a 
proportionate rate for tribal governments.
    Second, Congress should support finalizing the 
implementation of the most recent CRA proposed rules and 
encourage other banking oversight entities to adopt similar 
rules.
    Third, Congress should create a $50 million tribal 
allocation from the USDA 502 Direct Lending Program to get 
capital into Indian country and expand the test program that 
was done in South Dakota.
    And, last, while outside the jurisdiction of this 
Committee, Congress should reauthorize the NAHASDA and fully 
fund NAHASDA. NAHASDA would authorize two important home loan 
programs: the Title VI Loan Guarantee Program and the Section 
184 Loan Guarantee Program. And when drafting this legislation, 
the National Congress of American Indians urges Congress to 
establish an Assistant Secretary for Indian Housing at Housing 
and Urban Development that would streamline environmental 
rules, allow tribal housing programs to access IHS sanitation 
funding. And Congress should also permanently authorize tribal 
HUD Veterans Assistance Program to ensure all Native veterans 
receive the benefits they deserve.
    And just in conclusion, if Congress does not act, existing 
tribal housing will continue to deteriorate, and tribes will be 
left vulnerable, as they have been in this--as we have all seen 
during the COVID-19 pandemic.
    Thank you so much for allowing me to testify.
    Chair Smith. Thank you so much.
    And we will now turn to Mr. Stevens.

 STATEMENT OF ADRIAN STEVENS, ACTING CHAIRMAN OF THE BOARD OF 
DIRECTORS, NATIONAL AMERICAN INDIAN HOUSING COUNCIL; EXECUTIVE 
 DIRECTOR, SENECA NATION HOUSING AUTHORITY, AND MEMBER, SENECA 
                            NATION,
                        IRVING, NEW YORK

    Mr. Stevens. Good morning. My name is Adrian Stevens, and I 
am the Acting Chair of the Board of Directors of the National 
American Indian Housing Council. I am a member of the Seneca 
Nation in New York, and I currently serve as the executive 
director of the Seneca Nation Housing Authority. I appreciate 
the opportunity to testify before the Senate Banking 
Subcommittee today to discuss tribal housing. I would like to 
thank Chairwoman Smith, Ranking Member Rounds, and Committee 
Members for having this hearing. In addition to the comments I 
will make today, I have submitted a formal written statement 
for the record.
    The Committee asked us to describe the state of housing in 
Indian country. Unfortunately, the answer is that unmet housing 
needs in our tribal community are great and they are 
persistent. There is a longstanding housing shortage across 
Indian country due to years of stagnant investment. Tribal 
housing programs rely on Federal funding through NAHASDA, which 
established the Indian Housing Block Grant for tribes 25 years 
ago. Funding for NAHASDA programs has been flat for nearly 20 
years, providing tribes only two-thirds the purchasing power 
today that NAHASDA funds provided in the 1990s.
    We are asking tribes to do a lot with their housing dollars 
each year. Tribes are tasked with managing existing housing 
stock that has been developed over decades, and now it is often 
aging and needing constant repairs. Tribes also provide low-
income rental assistance, provide student housing, housing and 
supportive services for elders and veterans, housing counseling 
services for future homeowners, and we expect them to build new 
housing units each year.
    Tribes are expected to carry out all these services when 
nearly 400 of the Indian Housing Block Grant recipients receive 
less than $500,000 a year to do so and 175 tribal communities 
receive less than $100,000 a year for their housing programs.
    To be clear, NAHASDA has been successful. It has provided 
tribes dedicated and consistent funding each year, enabling 
tribal housing programs to improve their capacity and the 
ability to improve their communities. Tribal housing programs 
have never been capable to provide housing services to the 
communities as they do through NAHASDA. When we fall short, 
there is a lack of investment to spur new housing development 
in Indian country.
    In the first decade of NAHASDA, tribes were building well 
over 2,000 units a year across the country, more than had been 
built annually before NAHASDA was enacted. New construction has 
significantly decreased, however, as funding diminishes with 
inflation each year. Currently, tribes are building or 
purchasing roughly 1,000 units a year while a 2017 HUD report 
said 68,000 units are needed to address overcrowded homes and 
substandard housing in tribal communities. Unless we change how 
we invest in housing development in Indian country, tribes will 
not catch up.
    Prior to NAHASDA, tribes were piecing their housing 
programs together with various grants and funding sources. 
Despite the original promise of the block grant, tribes are 
again today piecing their housing programs together. Tribes are 
leveraging resources and programs from the U.S. Treasury, USDA, 
Veterans Affairs, nontribal HUD programs, and others. However, 
as tribes put these pieces together, they are often confronted 
with a multitude different eligibility requirements, 
environmental reviews, and program rules. As project planning 
becomes more complex due to leveraging multiple funding 
sources, tribes must weigh each project's impact to determine 
the best use of their staff's time and bandwidth.
    So what can we do? And what can Congress do? First and 
foremost, we need to reauthorize and properly fund NAHASDA 
programs. NAHASDA provides the greatest flexibility for tribes 
to meet the unique housing needs of their communities, and when 
properly funded, we see unit development across Indian country. 
We have to encourage commercial lending and investment through 
direct tax credits and incentives. Too often private banks and 
lenders avoid tribal communities because the perception is 
there that projects are too complex, or they do not provide the 
same efficient return on investment that a similar project in a 
nontribal area would provide. We have to improve administration 
of trust land and how delays in simple trust land documentation 
deter banks and Government lenders alike from prioritizing 
housing loans on trust lands. We have to demand that all 
Federal housing programs include tribal communities in both 
eligibility and implementation. The Low-Income Housing Tax 
Credit, USDA Rural Housing, Housing Trust Fund, and other 
programs all seem like ideal fits to solve tribal housing 
issues, yet those resources impact tribal communities sparingly 
across the country, if at all. We have seen promise in Federal 
and State programs that prioritize or incentivize tribal areas 
or create specific set-asides, and we see promise when a 
Federal program that is national in scope like the USDA Single 
Family Home Loan Program partners directly with tribal 
organizations or can implement their Federal programs directly 
in tribal communities.
    In that USDA pilot program in South Dakota, we have seen 
Native CDFIs issue more USDA-backed home loans in two tribal 
communities in a single year than USDA was able to provide in 
the past decade. So let us do more of that. In short, we have 
to increase investments of dollars and effort from Congress, 
from Federal agencies, from tribes, from the private sector. We 
must recognize the rural nature in many communities. The small 
size of many tribal communities, the higher costs of project 
development in tribal communities, all factored together 
diminish the economies of scale that drive housing development, 
and we have to invest anyway because it is meeting our tribal 
communities where our families continue to face greater levels 
of overcrowded and substandard homes and lack of affordable 
housing options.
    With that, I will end my statement, and I look forward to 
answering any questions you might have. Thank you again for 
your support in improving the housing opportunities for Native 
Americans, Alaska Natives, and Native Hawaiians across the 
United States.
    Chair Smith. Thank you very much.
    I will turn now to Alene Tchourumoff.

    STATEMENT OF ALENE TCHOURUMOFF, SENIOR VICE PRESIDENT, 
      COMMUNITY DEVELOPMENT AND CENTER FOR INDIAN COUNTRY 
DEVELOPMENT, FEDERAL RESERVE BANK OF MINNEAPOLIS, MINNEAPOLIS, 
                           MINNESOTA

    Ms. Tchourumoff. Thank you, Chair Smith, Ranking Member 
Rounds, and Members of the Committee, for the opportunity to 
testify today. As the senior vice president of Community 
Development and Engagement at the Federal Reserve Bank of 
Minneapolis, I oversee the work of the Center for Indian 
Country Development. The CICD supports tribes through 
actionable research and community collaboration to further 
tribal economic prosperity. The Center also leverages our 
department's broader expertise on affordable housing, labor 
markets, and early childhood development.
    I should add today that my views expressed here are not 
necessarily the views of the Federal Reserve Bank of 
Minneapolis or the Federal Reserve System.
    Our work on housing involves applied research, community 
engagement, and constant attention to the economic literature 
in the field. Our work points to the harmful effects of the 
current state of housing for Native Americans, Alaska Natives, 
and other Indigenous populations. My comments and detailed 
written testimony focus on Indian country's specific housing 
challenges and opportunities demonstrated by Indian Country's 
leaders.
    As you have already heard this morning, housing is often in 
short supply and substandard conditions in Indian Country. 
Homes are seven times more likely to be crowded and nearly four 
times more likely to lack complete plumbing. These conditions 
have been shown to harm family health and stability.
    In 2017, HUD estimated that 68,000 units would be needed 
just to address these issues, which would likely cost tens of 
billions of dollars. We focus on five factors that reinforce 
these barriers.
    First, Native nations are sovereign, but their land is held 
in trust and must have its title cleared by the U.S. 
Government. Mortgages on trust land are also leasehold 
mortgages as opposed to fee simple mortgages, and housing 
professionals and homebuyers frequently identify these 
realities as significant hurdles.
    Second, Indian country homebuyers often face an uphill 
battle when working with lenders to finance their home. Our 
economists' work shows that Native American borrowers on tribal 
lands are more likely to receive high-cost loans, leaving them 
ultimately to pay more for their homes over the life of their 
mortgage.
    Third, the tools designed to work in Indian country are 
often underutilized on trust land. This applies to Indian 
country-specific products like HUD's Section 184 program. It is 
also true of products whose features make them relevant in 
Indian country, like the USDA's Section 502 program.
    The fourth reason relates to the Federal Government's 
failure to fulfill treaty obligations. Developments in Indian 
country often pay today for the resulting historical 
underinvestment in physical infrastructure. For example, poor 
access to water or transportation raises the overall cost of 
construction.
    Fifth, Federal funding sources with different eligibility 
and process requirements complicate the preconstruction process 
in, and may not reflect the unique needs of Indian country. No 
quick fixes will radically improve things overnight, but plenty 
of innovations are showing promise for a brighter future and 
present potential avenues of involvement for Congress.
    Our research and engagement suggest four recommendations.
    First, the Federal Government should continue to expand 
financial capacity of Native community development financial 
institutions, CDFIs, and other tribal institutions. Native 
CDFIs offer community-grounded credit solutions in Indian 
Country. Our research suggests that the presence and activities 
of Native CDFIs increases the credit score of Indian Country 
residents that previously had the lowest credit scores. And the 
pilot that was just mentioned involving two native CDFIs and 
the USDA in South Dakota has shown the power of connecting 
community-based lenders and Federal lending resources.
    Second, the Federal Government can create normalized and 
complementary interagency lending processes in Indian Country. 
We recommend that Federal agencies and Government-sponsored 
enterprises work with representatives from tribal governments, 
lenders, developers, and nonprofits to find solutions and 
provide guidance for housing in Indian Country.
    Third, an improved title process on trust land would 
support housing development and tribal sovereignty. The Helping 
Expedite and Advance Responsible Tribal Home Ownership Act, 
also known as the HEARTH Act, of 2012 created a process for 
tribes to assume additional control of trust land management. 
Sufficient funding is not available through the HEARTH Act 
itself to fund the administrative capacity necessary for taking 
over trust land management from the BIA, and the cost is simply 
too high for many tribes.
    Finally, data on Native Americans and Indian Country 
programs should be improved. With some exceptions, existing 
sources are often insufficient to assess policy impacts or 
changes in the population-level well-being. Illuminating 
economic conditions in Indian Country will require 
collaboration on methodologies and new financial resources to 
obtain sufficient statistical samples.
    Congress has recently taken steps to support tribal 
sovereignty and access to important housing resources, and I 
hope our testimony today provides insight into how Federal 
policy can further support and accelerate Indian Country's 
upward momentum.
    I would like to thank you again for the opportunity to 
share insights from the CICD's work.
    Chair Smith. Thank you very much.
    I will turn now to Mr. Goze.

 STATEMENT OF MICHAEL GOZE, CHIEF EXECUTIVE OFFICER, AMERICAN 
INDIAN COMMUNITY DEVELOPMENT CORPORATION (AICDC), MINNEAPOLIS, 
 MINNESOTA; CHAIRMAN, BOARD OF COMMISSIONERS, HO-CHUNK HOUSING 
AND COMMUNITY DEVELOPMENT AGENCY (HHCDA), TOMAH, WISCONSIN; AND 
              MEMBER, HO-CHUNK NATION OF WISCONSIN

    Mr. Goze. Good morning, Madam Chair, Senator Rounds, and 
Members of the Subcommittee. It is my honor to provide 
testimony to this Committee this morning.
    In looking at the current situation regarding safe, 
standard, and affordable housing on tribal trust land or within 
rural or urban settings throughout our country, American 
Indians fall far short of the national average in the 
percentage of home ownership when compared to their White 
counterparts. There are several reasons for this disparity.
    First, access to mortgage products that meet the specific 
needs of the American Indian population. The Section 184 Indian 
Home Loan Guarantee Program is a home mortgage product 
specifically designed for American Indian and Alaska Native 
families, Alaska villages, tribes, or tribally designated 
housing entities. Congress established this program in 1992 to 
facilitate home ownership and increase access to capital in 
American Indian communities. Although this mortgage product has 
had some impact, it has not equaled the playing field. The 
number of lending institutions that offer the Section 184 loan 
product are limited to a select few. I would suggest that the 
Section 184 or a like loan product would be better served if it 
was provided through the American Indian Community Development 
Financial Institutions, CDFIs, that are a great asset to Indian 
Country both on reservations and in the urban areas. The CDFIs 
provide a myriad of services all dedicated to the financial 
success of its clients.
    The work of a CDFI in home ownership is providing homebuyer 
education, homebuyer counseling, credit repair, budgeting, 
responsibilities of home ownership, and other aspects of this 
sometimes daunting process. A large number of American Indian 
clients seeking home ownership are first-time homeowners 
looking to provide stability, enhancing the community 
stabilization making these services important to their 
individual success. I believe this relationship would benefit 
through the mortgage process. Currently their clients make 
applications for mortgages with other lending institutions. 
Sometimes these are online applications, and this can be a 
totally different experience than they have had in the past in 
working with the CDFI. To provide an opportunity for American 
Indian CDFIs to have a mortgage product like the Section 184 
will complete the process and provide a greater level of 
success. American Indian CDFIs, given the opportunity, could 
provide a better level of service and gain the knowledge and 
financial benefits of the mortgage process, making this a win-
win for both the client and the CDFI.
    Second, affordability. Income levels within the Native 
American communities have a substantial effect on the home loan 
amount available to them. With today's housing prices, the 
availability of homes are scarce in lower-price areas. Having a 
forgivable deferred loan product that will be reduced over time 
would be a great investment into the stabilization of American 
Indian families and communities. Having a safe, standard, and 
affordable home creates the foundation that promotes better 
outcomes in areas of education, health, and financial 
stability. Our homes can be the single greatest financial asset 
in one's life, making way for families to continue to thrive 
versus just survive in the current economic climate. By 
investing in our American Indian families via home ownership, 
we can create an immediate impact to the lives of our youth, 
elders, and adults. This type of investment creates immediate 
impact and also provides long-term impact in the stabilization 
of families.
    Third, a land trust model. We have used the land trust 
model in Minneapolis to make home ownership more affordable. In 
Minneapolis, we have much success in this, and reducing the 
mortgage loan amount by having land owned through a land trust, 
this provides the ability to create the buying power of the 
homeowner by having the land held outside of the mortgage. It 
provides a monthly benefit to the homeowner in a reduced 
monthly payment. In a land trust model, the appreciation is 
shared by a predetermined amount should the property be sold. 
The land trust model can also be beneficial in continued 
housing affordability for the community by the reinvestment of 
the appreciation by the land trust.
    Last, in today's times we need to use every financial 
opportunity to help American Indian families understand and 
relish in the benefits of home ownership. We need to use a 
number of initiatives to make home ownership possible. At AICDC 
we have used city, county, and State funding options, including 
grants, deferred loans, and other home ownership initiatives, 
and this has made--we look forward to our Federal partners in 
providing opportunities to increase home ownership to American 
Indian families throughout the country.
    I thank you for your attention to this matter.
    Chair Smith. Thank you very much.
    And we will now turn to Mr. Sheperd.

   STATEMENT OF ERIC SHEPHERD, EXECUTIVE DIRECTOR, SISSETON-
WAHPETON HOUSING AUTHORITY, SISSETON, SOUTH DAKOTA; AND MEMBER, 
                    SISSETON WAHPETON OYATE

    Mr. Sheperd. I would like to thank Madam Chair Smith for 
the opportunity to speak, Vice Chairman Toomey, Senator Rounds, 
and other Members of the Subcommittee, for this opportunity to 
talk about Indian housing today.
    It has been an especially hard and challenging 15 months 
for those of us on the Sisseton-Wahpeton Reservation in South 
Dakota. We were hit hard early with the COVID pandemic at home, 
and we are still working on recovery today. Housing has been at 
the forefront of the recovery efforts, providing a safe place 
for our members to shelter and recover and managing the many 
new relief programs that you in Congress have provided to us.
    A large part of our recovery effort at Sisseton-Wahpeton 
involves looking past the pandemic and into the long-term 
status of Indian housing programs, both on our reservation and 
in the United States as a whole. The perennially inadequate 
funding and other program issues that existed prior to 2020 
must now be addressed to assure the long-term sustainability of 
Indian housing for the first Americans. To put it more plainly, 
we all must understand something is wrong when the base level 
appropriation for the Native American Housing Assistance and 
Self-Determination Act, NAHASDA, has not been increased since 
the law was originally passed 25 years ago. As Congress and the 
new Biden administration focuses on helping America rebuild its 
dilapidated infrastructure and recalibrate its housing 
assistance programs, Indian Country and Indian housing must 
also be given fair consideration.
    I know the Subcommittee has a particular interest in the 
HUD Section 184 program operating in Indian Country. I can tell 
you that the 184 program has had limited impact on reservation 
lands held in trust by the United States. While a few 
individuals have been able to secure leasehold mortgages under 
the program, most of the funds go to off-reservation lands and 
urban areas where banks and lenders are more comfortable with 
providing traditional mortgages. The situation has not been 
helped with HUD's recent revision or the program regulations 
that send the program back in time before the 184 Act was 
passed in 1992--requiring underwriting provisions and fees that 
are not affordable or helpful to developing new housing on 
reservation lands.
    I would like to call the Subcommittee's attention to a 
number of other important issues that Congress should address 
regarding Indian housing programs:
    We appreciate the emergency funds received to date and need 
to receive a fair share of the new housing infrastructure funds 
as well. The CARES Act, the Consolidated Appropriations Act of 
2021, and the American Rescue Plan have all included much 
needed emergency funds to support Indian housing operations 
during the pandemic. We do appreciate that Congress has 
allocated money to alleviate the short-term effects of the 
COVID-19 pandemic. We can confirm that this money had an 
immediate and vital impact on preserving and protecting housing 
services and resources in our tribal communities. Our proposal 
is to now address the more long-term and sustainable solutions 
to improving Indian housing. The recently proposed American 
Jobs Plan includes $231 billion to improve and produce more 
housing and housing infrastructure, including a proposed amount 
of at least $50 billion to renovate and rehabilitate federally 
assisted housing. We are asking you to help ensure that, if new 
infrastructure legislation is passed, Indian housing continues 
to get its fair share of the funding. A 5-percent set-aside for 
Indian housing would be $2.5 billion. As you are aware, Federal 
programs have long neglected Indian Country's need to maintain 
and improve its aging housing stock.
    Housing needs in tribal areas remain the most severe in the 
Nation, and resources to address the problem have declined more 
rapidly than for other Federal housing programs.
    Tens of thousands of new units are needed. Thousands of 
existing units, some of which are currently boarded up because 
of lack of funding and severe methamphetamine contamination, 
are also in need of substantial rehabilitation. The simple fact 
is that $2.5 billion of additional new funding is needed if 
these conditions are going to be effectively addressed. Tribes 
and their TDHEs have the capacity to build and rehabilitate 
their housing. Most observers know and most studies show, 
including the recent ``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'', by HUD PD&R and the Urban Institute, January 2017, the 
``Report,'' that TDHEs have or, if needed, can quickly 
reacquire the capacity to build housing and other related 
infrastructure construction on this scale. TDHEs are prepared 
to quickly gear up to produce a substantial number of new 
units. This will help tribes and Alaska villages generate for 
their communities and the country postpandemic economic 
recovery--just as they did successfully 10 years ago after the 
Great Recession with American Recovery and Reinvestment Act--
ARRA--monies.
    Thank you for this time to testify.
    Chair Smith. Thank you very much to all of our panelists.
    We will now begin a round of 5-minute questions from 
Senators, and I will start actually right, I think, where Mr. 
Sheperd was leaving off, which is the unique challenge that we 
have with housing on tribal lands, which is that properties are 
far more likely to have really significant, severe physical 
defects than the rest of the United States housing stock all 
in. In fact, on tribal lands, plumbing is deficient at a rate 
five times higher than the national average, and homes on 
tribal lands lack heating at a rate of more than 100 times the 
national average.
    So let me maybe turn to Mr. Desiderio and Mr. Stevens, and 
you could just talk about why you think these physical 
challenges are so much pervasive in tribal housing. Then let us 
know, is this primarily a funding issue or are there other 
things that we need to be doing in order to address this deep 
challenge?
    Mr. Desiderio. Well, I want to go back in time a little bit 
to address this. There is this idea that, you know, tribes have 
been placed on marginal lands. They have a limited land base, 
and the housing stock has not kept up with the demand. So when 
you are looking at building on limited land base and limited 
access to water and other infrastructure, the issues that you 
are mentioning tend to be more significant. It is an issue of 
funding, and I am glad we are having this conversation around 
housing during a national conversation of what is 
infrastructure. And this is not an isolated issue, so as we are 
talking about infrastructure, we really need to talk about the 
infrastructure needs that support housing, which is what you 
are getting at in your question.
    If the housing stock is not keeping up with the demand and 
we have the highest number of family members per household, it 
stresses the existing housing stock, and then the limitations 
on funding of, you know, the water infrastructure, which has 
gone down, and then also looking at our lands are not included 
in the Water Resources Conservation Act, which provides USDA 
with that type of planning authority.
    So there are a number of issues that go into this, but 
mostly on the marginal lands and the lack of ability to address 
the larger and really expensive infrastructure issues that go 
into forming a really holistic community or holistic housing 
stock.
    Chair Smith. Thank you. So we should be thinking about this 
clearly in the context of this larger infrastructure 
conversation we are having.
    Mr. Stevens, would you like to add anything to that?
    Mr. Stevens. I think Dante hit it right on the knot there, 
really talking about the infrastructure issues and lack of 
funding. So rather than repeat what he said, he has pretty much 
stated what--answering your question. But, again, you know, the 
homes that we have on reservation are really one of the issues 
that we have, you know, in finally being able to replace the 
older homes that we do have, and I think it is having that 
availability of funding available.
    Chair Smith. Right, right.
    So let me turn to Mr. Goze. Mike, in the recovery from the 
coronavirus crisis, the community development CDFIs have played 
a really important role in providing financing to folks that 
have been overlooked by--or, you know, unable to get access to 
financing. Could you just talk to us about what we need to do 
to help CDFIs support home ownership for indigenous people and, 
you know, what you have seen that is most effective in 
accomplishing this goal from the perspective of CDFIs?
    Mr. Goze. AICDC created a community-level loan fund that 
actually is marked into the Minneapolis fund, which is the 
CDFI. It is a new CDFI. They chose not to enter into the PPP 
arena because of their size. But I see the CDFIs as being the 
most integral part of home ownership, especially in the urban 
areas and on the reservation areas, serving both in the urban 
area and working with the Ho-Chunk Community Development Agency 
in Wisconsin. I see the advantage of the CDFIs both in the 
urban are and on the reservation in rural areas. And so I 
believe by supporting them with providing more products that 
they can use to reach their clients and tribal members would be 
advantageous both in home ownership and actually all lending 
opportunities which we see the Native American being unbanked 
and not being able to access some of the financial needs that 
they might have.
    Chair Smith. Thank you. Thank you so much.
    Mr. Stevens, I am very interested in the USDA 502 loan 
pilot program in South Dakota. I expect that Senator Rounds 
will ask about that, but if he does not, I will return to that.
    Senator Rounds.
    Senator Rounds. Thank you, Madam Chair. Well, I most 
certainly appreciate the fact that we are having this hearing 
today, and there seems to be a whole series of topics here that 
our panelists have already delved into. But let me just begin 
with this, and I would like to direct this first one to Mr. 
Sheperd.
    Although it does not fall squarely within the jurisdiction 
of the Banking Committee, I hope that Congress can make 
progress this year on the reauthorization of the Native 
American Housing Assistance and Self-Determination Act, or 
NAHASDA. NAHASDA is a very broad piece of legislation, but I 
was hoping to learn more about some of the priorities your 
organizations and tribes have identified for a reauthorization 
package. And, Mr. Sheperd, I know you have an interest in this, 
and that is the reason why I will direct it to you first. What 
are some of the key priorities that the Sisseton Wahpeton Oyate 
is hoping to see when NAHASDA is reauthorized?
    Mr. Sheperd. Thank you, Senator Rounds. In several other 
contexts, when tribes need approval from an agency, Congress 
has authorized the ``deemed approved'' approach to move the 
decision point past the agency, and if the agency takes too 
long to act, we do support this kind of approach in the context 
of HUD decisionmaking under NAHASDA. NAHASDA expired in 2013 
and has not been reauthorized since, despite efforts in every 
session to do so. Obstacles to development of affordable 
housing are the lack of improvements to the low-income housing 
areas. I think it is time. You know, I think we need to change 
our mission there. We have been going 25 years now, Senator. 
You know, we have had multiple consultations with tribes coming 
to D.C., and maybe it is more than once a year. You know, we 
are getting past the pandemic now, and maybe it is time--it is 
time. Let us leave it at that. It is time to reauthorize 
NAHASDA.
    Senator Rounds. Thank you. I was thinking about this also, 
and I am going to direct my next question to Mr. Desiderio. An 
article from the Billings Gazette recently referred to Federal 
assistance for Indian Country as the ``Marshall Plan for Indian 
Country''. It pointed out the American Rescue Plan dedicated 
$36 billion to federally recognized tribes this year on top of 
$8 billion from CARES. Given the scope of challenges when it 
comes to housing, I really hope that this money is being 
directed and that you are seeing it on the ground there.
    Can you tell us more about the effectiveness of how those 
funds are being transmitted through the bureaucracy and whether 
or not it seems to be any effectiveness with regard to the 
Federal assistance during the COVID-19 when it comes to housing 
specifically?
    Mr. Desiderio. Thank you for that, Senator. So the 
experience for tribes on the discretionary funds from the CARES 
Act should be separated a little bit from the American Rescue 
Plan. The CARES Act through the Department of Treasury had 
limitations on the use of the funds. So infrastructure was 
relatively limited for tribes to be able to pursue.
    The subsequent legislation opened up housing, had housing 
vouchers, and then in this latest round, the American Rescue 
Plan, infrastructure was included, but it was not housing. So 
we are able to address some of the water issues and sanitation 
issues with the Rescue Act funding and get to some of the 
housing vouchers and housing assistance through some of the 
other legislation. So it is all incredibly helpful, and I think 
it serves as a model for putting out discretionary money, but 
the other side of that is opening the options for tribes to be 
able to address the dramatic infrastructure needs that have 
come out during this pandemic and really showcased what 
deficiency in infrastructure--what are those real impacts.
    And so the Marshall Plan idea is great, and the 
discretionary funding is great, and we are looking forward to 
addressing some of the infrastructure needs. But we are also 
looking forward to further support through infrastructure 
funding to be able to open that discretionary funding up or the 
programmatic funding up to address all of these needs. I think 
that tying hands on discretionary money may not be the best use 
for addressing our needs on the ground that we all know 
firsthand in our communities.
    Senator Rounds. Thank you. Let me just follow up, and I do 
want to follow up on Senator Smith's comments concerning the 
502 Direct Lending Program. And I know that we have got a pilot 
project working on it. I know there is more that we could do to 
help these programs function appropriately.
    To Mr. Stevens, do you have any thoughts on how to improve 
and to build on the 502 program? Have we learned anything so 
far?
    Mr. Sheperd. I really have not had any issues or really any 
type of development with the 502 program here at Seneca. Again, 
you know, looking at that, I think really the openness of the 
regulations that you need to follow to go through that program 
are limited to what we try to do here on tribal lands. You 
know, it is tough. They opened that up, but it is very low--
there is very little usage of that funding available there. It 
is limited. So I think we can open it up and look at more 
consultation on how to utilize those funds a lot easier for 
tribes to be able to provide the housing needs of our 
communities.
    Senator Rounds. OK. Well, thank you. My time has expired, 
but perhaps we can explore that a little bit more later on 
here.
    Thank you, Madam Chair.
    Chair Smith. Thank you very much.
    Senator Cortez Masto.
    Senator Cortez Masto. Thank you, Madam Chair. Thank you to 
this panel. This is a great discussion. I am very proud I get 
to represent 27 tribal communities in the State of Nevada.
    Let me start with the Federal Home Loan Bank investments. 
There are 11 Government-sponsored enterprises that we know as 
the Federal Home Loan Banks, and they are required to meet the 
affordable housing and community development needs of the 
communities of the States that they serve.
    So my question to the panel members: How many tribes to 
your knowledge have received investments from the Federal Home 
Loan Bank programs like the Community Investment Program or the 
Community Investment Cash Advance or the Affordable Housing 
Program? I am curious to know the data here. And maybe Mister--
is it ``Desiderio''?
    Mr. Desiderio. Right.
    Senator Cortez Masto. If we could start with you, are you 
familiar with any of this money from Federal Home Loan Banks 
going to any tribal communities for housing?
    Mr. Desiderio. Thank you for asking that, and just to point 
out, the Federal Home Loan Bank has reached out to get Native 
representation from Senator Smith's home State. Chief Benjamin 
from the Mille Lacs Band of Ojibwe is going to be serving on 
that board, and they have had limited outreach as well to a 
CDFI technical organization. But, in general, I do not know if 
I can answer the question on how many, but it really has been 
very limited outreach.
    If you look at the potential of the Federal Home Loan Bank, 
they have two different areas: one is on being able to 
reassure--provide liquidity to banks. There are a lot of Native 
American banks that could benefit from that. But on the other 
side of it, if you look at their plans and their limited plans, 
they are not addressing the real needs of Indian Country. Just 
meeting with the CDFI technical adviser is not enough, and it 
does not go to the understanding of tribal issues and the 
capital needs that tribes are faced with.
    Senator Rounds' bringing up the 502 program is a great 
example of the creativity of a program to be able to adjust to 
a member's income and lower the interest rate. It is also the 
ability to get direct funding for relending into communities. 
So all these things are possible, and they should serve as a 
model for the capital markets and not as a substitute. And I 
think that is really important. So the Federal Home Loan Bank 
in providing some of the priorities for the bank, their plans 
for the bank, you know, in being able to address Indian Country 
needs, it has not acted in that direction. And the other thing 
that they can do is they have a lot of grants that could go out 
to tribal communities, but they are going out to serve housing 
needs in the same way and not really using the tribal 
governments and their role in providing housing to their 
citizens.
    So $700 or $800 million in grant funding is not finding its 
way to reassure the capital markets or bring housing into 
Native communities.
    Senator Cortez Masto. Thank you. And is it fair to say the 
only reason that they recently reached out is because Senator 
Smith has been engaged, but that is just--but prior to that 
they had not reached out to you?
    Mr. Desiderio. I think it I fair to say that, yes, they 
have not been actively reaching out until recently, yes.
    Senator Cortez Masto. Yes, and that is what I am finding as 
well as I engage in my region. The reason I bring it up, 
because this is such an important issue, and so one of the 
areas that I am focused on--and just for my colleagues, in 
2019, there was a report on the low-income housing and 
community development activities of the Federal Home Loan 
Banks. There was only one reference to investment in tribes. 
Only the Des Moines Bank offered a program, a Native American 
Homeownership Initiative. I know--and this is the reason I am 
bringing it up--because we all feel the same way that we have 
got to do a better job here. So because of this I recently 
introduced legislation, S. 1684. It is the Federal Home Loans 
Banks' Mission Implementation Act, which would strengthen the 
ability of the banks to invest in communities, and my bill 
includes a 2-percent set-aside for tribes. This is an area that 
we have got a great opportunity to focus on, and I look forward 
to more conversations on this issue.
    Thank you for this great hearing.
    Chair Smith. Thank you so much, Senator Cortez Masto.
    Now, there is Senator Lummis. I will next turn to Senator 
Lummis. Welcome.
    Senator Lummis. Thank you so much, Madam Chairman and 
Senator Rounds, for holding this hearing. I am going to focus 
my questions on the economically disadvantaged Native 
Americans. In my State, that includes a substantial number of 
the members of the Eastern Shoshone and Northern Arapaho tribes 
in Wyoming on the Wind River Reservation and also, as you know, 
Senator Rounds, the Oglala Lakota at Pine Ridge. There are 
issues that relate to housing that really do affect their 
financial and personal well-being, and I want to start with 
some questions about how the census may have inaccurately 
counted, because it is so difficult, the number of Native 
Americans and how many are living in each household. You know, 
if you have a Native American household where there are 
multiple generations, there are extra workers, they are trying 
to keep everybody housed, perhaps in housing that is smaller 
than would normally be considered in the United States adequate 
for that many people, then the census comes along, and maybe 
they are reluctant to discuss how many people are living in 
their household.
    So question number one, and I think this is for Mr. 
Desiderio and Ms. Tchourumoff: Is the census an issue? And is 
it contributing to undercounts?
    Mr. Desiderio. I just want to categorically say yes to that 
question. The idea that tribal communities are consistently 
undercounted in the census is pretty significant for the amount 
of funding that goes out to tribes. The reluctance, you know, 
for tribal citizens to contribute to the census has always been 
an issue, and then this past census is going to have a severe 
impact on that because of the pandemic and because of the idea 
that a lot of tribes are in rural and remote areas, and this 
information, you know, needs face-to-face, and that has not 
been done as adequately in the last census. So, yes, it is an 
important issue, the reluctance, and the higher households, it 
is important that we get an accurate count, and I am not sure 
we are doing that at this point.
    Ms. Tchourumoff. Thank you, Senator. I would also offer--I 
would agree with what Mr. Desiderio has just said. I think 
Native Americans are at risk of being under- or miscounted, I 
think for two important reasons.
    First, the American Community Survey, which provides 
annually updated data about reservations and communities across 
the country does not include information about tribal 
enrollment, and so it can make it difficult to understand how 
housing challenges might vary across tribes and renders the ACS 
less useful for program implementation than it could otherwise 
be. And it means that the population measured in the census 
data is not actually directly comparable to population measured 
in a tribal census, for example.
    The second challenge is, as Dante was just mentioning, that 
Native Americans are vulnerable to undercounting in the 
decennial census and, obviously, by extension the ACS, and that 
is driven in part by, you know, the higher likelihood of 
renting, lack of infrastructure, potentially phones, maybe 
issues with trust in the Federal Government, access to 
broadband, things like that. So the U.S. Census Bureau 
estimates that the undercount in the 2010 census of American 
Indians and Alaska Natives was about 4.9 percent, which is 
substantially higher than Black Americans at 2.1 percent or 
Hispanics as 1.5 percent comparing across different groups of 
people. So it is a very, I think, important question.
    Senator Lummis. Thank you. And if you have some thoughts 
about concrete steps we could take to address this, I would 
love to have you submit them in writing. And that is to any of 
our witnesses.
    I have a question for Mr. Sheperd. Data is showing that 
calls to 911 around the most economically disadvantaged Native 
American areas come from Native Americans that do not have 
reliable housing. So is it reasonable to assume that we can 
reduce some of the strain on our local public safety agencies 
by improving Native American housing?
    Mr. Sheperd. Of course. That takes me back to the 
reauthorization of NAHASDA also. We also want to recommend, if 
the opportunity arises, that NAHASDA be reauthorized. Such 
formal reauthorization is long overdue. And if this should 
happen, we continue to join with most other tribes, TDHEs, and 
national and regional Native housing associations to advocate 
that the reauthorization modify the existing NAHASDA 30-percent 
rental payment rule. If the country fails now to address the 
plight of Indian housing, it would be disastrous to tribes and 
Alaska Native communities and to those hundreds of thousands of 
Native people and families who suffer so greatly with 
overcrowded and severely substandard housing.
    Senator Lummis. Yes, well, it sure was a big issue in 
Wyoming during COVID, and so we have learned a lot, all of us, 
during COVID about some of the soft underbelly of our supply 
chains, and certainly on our reservations, housing was a big 
issue. There was an incident--I will tell you about it--on the 
Wind River Reservation where an indigent Native American person 
was exhibiting symptoms of COVID, but he was in a park in a 
city, and they had to take him to the Indian Health Service in 
the back of a pickup because there were inadequate medical 
service providers, an ambulance that was subject to 
sterilization from COVID. We learned so much during COVID, and 
this is yet another area where we have got a lot of work to do.
    So, Mr. Ranking Member and Madam Chairman, I want to thank 
you once again for holding this hearing. Thank you very much to 
our witnesses. I yield back.
    Chair Smith. Thank you so much, Senator Lummis.
    I think we have time for another round of questions if 
Senator Rounds would like to ask anything more. I would like 
to, and anybody else who is here. And I know that Senator 
Tester and Senator Ossoff were trying to get back but have 
conflicts with other committees. So let me just go to my 
question. I want to follow up on this USDA Loan 502 pilot 
program that Senator Rounds mentioned and I mentioned as well.
    Alene, I am going to direct this to you. I think you 
mentioned this in your testimony. So the USDA's 502 Direct Loan 
Program offers single-family home loans to low-income rural 
households, but only about 2.6 percent of these loans go to 
Native families. So the USDA established this pilot program in 
North and South Dakota where Native CDFIs could use their 
community-based networks to deploy these USDA mortgages.
    Alene, could you talk to us about sort of what we have 
learned from this, what impact? I am looking at ways that we 
could expand this pilot nationally and would love to hear your 
thoughts on, you know, what kind of--where you think we should 
go from here with this?
    Ms. Tchourumoff. Well, thank you, Senator. I think I 
mentioned in my testimony, as well, that some of the Federal 
loan programs that are designed to provide mortgage financing 
on trust lands or just in general, and then the difficulty of 
actually providing those loans on trust land I think is present 
across multiple programs, and that same case applies in the 502 
Program.
    The pilot relending program provides a promising example of 
how CDFIs can be leveraged in communities to serve more 
customers. In that example, you could see the relending 
increasing the total number of loans. I think it was 17 loans 
in one year versus 11 loans in the prior eleven years. You can 
see the power of the network. In that instance as well, the 
CDFIs provide financial education and other borrower support to 
make the program work overall more successfully. There are 
promising examples there. However, there are broader systemic 
issues that we had talked about earlier relating to land trust, 
the use of trust land, and then borrower--lender knowledge of 
lending on trust land is, I think, another avenue outside of 
CDFIs that continues to be an area of opportunity to look for 
solutions.
    Chair Smith. Thank you. Thanks so much.
    Let me just ask--maybe I will just direct this broadly to 
the panel. As I have listened to your testimony today, you each 
raised a number of really practical and clear issues and ideas 
for where we can go from here. So let me just maybe ask each of 
you if there is anything more that you would like to say. What 
is the single most important thing that we could do in your 
mind to addressing this lack of access to affordable housing 
and good-quality housing that is such a deep challenge?
    Mr. Desiderio. If I may start, this is really interesting 
question. I think it gets to the idea that if the housing is 
becoming worse in Indian Country or more challenging, we need 
to change the way that we are doing things. So taking a 
holistic approach, the incentives are not lined up to have the 
capital markets come in. So I would love a question--I was 
tuned into the Banking hearing yesterday for the CEOs of the 
banks, and the idea that--the Community Reinvestment Act was 
passed last year, and now it is on hold. But what are those 
banks doing to serve Indian Country who are now squarely in 
their assessment area? What are their plans? And most of the 
large banks do not have plans on addressing Indian Country, and 
they have no intention of doing that because it is more 
difficult.
    So we need to align the incentives of the capital markets 
to do business in India country, and I think the Community 
Reinvestment Act, the way that that has lined up, it gives 
Indian Country as a distressed area the incentive that banks 
need to come in. They get multiples that are applied to doing 
business in Indian Country so they can meet their CRA 
qualifications sooner. They also have the ability to invest in 
the banks that have learned to deal with Indian Country. And 
they also can do equity investments and support CDFIs. And I 
think those kind of incentives when you are lining it up and 
that kind of structure is really what we need on the incentive 
side.
    The support from the Federal Government in dealing with 
this one house at a time for, you know, the USDA program is 
good to show banks the way. But when we are looking at this, 
the Title VI program shows the most promise because that 
program allows the tribe to leverage funds and develop housing 
developments instead of one house at a time. We should be 
supporting that and the other infrastructure that goes with it, 
and really supplementing that program on the Community 
Development Block Grants that we are leveraging. With 95 
percent guarantees, tribes are still having trouble getting 
banks to come in and support that, and that shows that it is 
not just the incentives; there has to be education on the 
banking side who would love to have a 95-percent guarantee, but 
there is not always the education internally with the branches 
and the banks themselves to deal with Indian Country.
    So looking at where the incentives are, looking at the role 
of the Government in doing developments, and looking at 
bringing the capital markets in is really going to be 
instrumental in solving this in a general way instead of 
looking at it one house at a time.
    Chair Smith. Right. Thank you. My time is up. I am going to 
turn back to Senator Rounds, but I appreciate that very much, 
and I look forward to following up on that conversation. I 
think it is very important.
    Senator Rounds.
    Senator Rounds. Thank you, Madam Chair. And, once again, 
thanks for holding this hearing. And just so that our witnesses 
know, we have been called to a vote, and so we are probably 
going to--and it is up to the Chairperson, but it looks like we 
have got about 7 minutes left before the vote terminates on us. 
So I will be very brief.
    I want to thank all of our witnesses for being with us 
today. I do want to just touch base on the 184 HUD loan 
program, the guarantee program. We made some changes, and 
Senator Smith and I have worked on this in the past, and more 
specifically, we partnered together on legislation called the 
``Native American Housing Affordability Act''. It was signed 
into law as part of the December omnibus. Our legislation made 
it easier for 184 borrowers on Tribal Trust Land to participate 
in the 184 program by allowing HUD to issue certificates of 
guarantee without waiting on the trailing documents from the 
BIA, provided that lenders indemnify HUD for defaults.
    I am hoping to get a better idea of how well these reforms 
have worked in the 6 months since they have become law. We may 
not have any evidence yet at all of success, but I was hoping 
that perhaps there might have been some sort of an uptick in 
lending. I just thought I would start just very briefly, Mr. 
Stevens, do you know anything about whether or not there has 
been any uptick at all based on the changes made?
    Mr. Stevens. Not yet, not that I have seen, but for us in 
New York we were limited on the amount of lending agencies that 
offered the 184 program. At one point within the last year, we 
had nobody available to us. We just got recently--because we 
had applied recently, about 3 years ago, working with a company 
that they were told that New York State refused to do 184. So 
how could we they do that? And we do have a couple companies 
that we are working with right now to do 184 in New York State. 
So it is a different issue, too, with the land issue that we 
have in New York State versus other tribal areas, too, so it is 
going to be a little tweaking that we have to do to really make 
sure that we can get that program up and running, and we are 
working with one of the lending agencies now to do that.
    Senator Rounds. OK. Thank you very much.
    Ms. Tchourumoff, I am just curious. From the Fed, have you 
heard anything, have you seen anything with regard to the 
changes that we have made?
    Ms. Tchourumoff. Senator, we have not, and that is actually 
an area that we would love to work with others on. It is just 
the availability of data on these programs so that we can 
continue to monitor and track progress of availability and 
where the loans are being used, for example.
    Senator Rounds. Great. Thank you.
    Madam Chair, I know that we are pressed for time on this, 
so I will yield back at this time. But I just want to say once 
again thanks for holding this hearing. I think we can put 
together some good programs, and I think this is something that 
all of us want to try to address and make improvements on. If 
it was easy, it would have been done a long time ago. There are 
lots of intricacies on it. There are lots of issues to go to 
Tribal Trust, the challenges that we face just in terms of the 
amount of poverty that we find to begin with. But this is 
something that I think--this is an area that truly can make a 
difference for individuals that really could use some help.
    So, Madam Chair, thanks, and I will yield back.
    Chair Smith. Thank you so much, Senator Rounds. And thank 
you so much to all of our witnesses for being a part of this 
Subcommittee hearing today and for providing your testimony.
    I want to just note that both Senator Rounds and I serve 
also on the Senate Indian Affairs Committee, and so we have an 
opportunity to work on these issues in both paces here, and I 
know we have been listening hard around issues around 
reauthorizing NAHASDA as well as the other very great and 
specific ideas that you all have offered today.
    For Senators who would wish to submit questions for the 
record, those questions are due 1 week from today, which will 
be Thursday, June 3rd. And for all of our witnesses, you have 
45 days to respond to any questions for the record.
    Thank you again, and with that, this hearing is adjourned.
    [Whereupon, at 11:16 a.m., the hearing was adjourned.]
    [Prepared statements and responses to written questions 
supplied for the record follow:]
                 PREPARED STATEMENT OF DANTE DESIDERIO
    Chief Executive Officer, National Congress of American Indians, 
                             Washington, DC
                              May 27, 2021
    On behalf of the National Congress of American Indians (NCAI), 
thank you for holding this hearing to address housing needs in Indian 
Country. I am Dante Desiderio, I am a member of the Sappony Tribe, and 
I serve as the Chief Executive Officer of NCAI.
    Founded in 1944, NCAI is the oldest and largest representative 
organization comprised of Tribal Nations and their citizens. Tribal 
leaders created NCAI in response to Federal policies that threatened to 
terminate Tribal Nations. Since then, NCAI has fought to preserve the 
treaty and sovereign rights of tribal governments, advance the 
Government-to-Government relationship, and remove structural 
impediments to tribal self-determination.
    Central to these goals is ensuring that the Federal Government 
provides resources to improve housing opportunities for Tribal Nations 
and their citizens. \1\ Tribal Nations across the country maintain and 
develop housing infrastructure that serves to improve their citizens' 
health outcomes, sustain their regional economies and workforces, and 
address our growing population.
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     \1\ 25 U.S.C. 4101(5) (acknowledging, inter alia, that 
``providing affordable homes in safe and healthy environments is an 
essential element in the special role of the United States in helping 
tribes and their members to improve their housing conditions and 
socioeconomic status [,]'')
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    Despite this role, for decades, the Federal Government has 
recognized that its trust and treaty responsibility to Tribal Nations 
to provide adequate housing has been chronically underfunded. \2\ As a 
result, tribal communities see overcrowded homes at a rate of 16 
percent, roughly eight times the national average. \3\ Additionally, 
over 70 percent of existing housing stock in tribal communities 
requires upgrades and repairs, many of them extensive. \4\
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     \2\ ``A Quiet Crisis: Federal Funding and Unmet Needs in Indian 
Country'', U.S. Commission on Civil Rights (2003) https://
www.yumpu.com/en/document/read/32869468/a-quiet-crisis-federal-funding-
and-unmet-needs-in-indian-country; and ``Broken Promises: Continued 
Federal Funding Shortfall for Native Americans'', U.S. Commission on 
Civil Rights (2018) (``Broken Promises Report''), https://
www.usccr.gov/pubs/2018/12-20-Broken-Promises.pdf.
     \3\ U.S. Department of Housing and Urban Development (HUD), 
``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'', (2017), https://www.huduser.gov/
portal/sites/default/files/pdf/HNAIHousingNeeds.pdf.
     \4\ HUD, Fiscal Year 2017 Congressional Justifications, 11-12, 
(2016), https://www.hud.gov/sites/documents/FY-2017-CJS-COMBINED.PDF.
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    These disparities increased the vulnerability of American Indians 
and Alaska Natives (AI/ANs) to the coronavirus (COVID-19) pandemic and 
resulted in our communities having at times the highest COVID-19 
infection, hospitalization, and death rates per capita in the United 
States. \5\
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     \5\ Centers for Disease Control and Prevention, ``Risk for COVID-
19 Infection, Hospitalization, and Death by Race/Ethnicity'', https://
www.cdc.gov/coronavirus/2019-ncov/covid-data/investigations-discovery/
hospitalization-death-by-race-ethnicity.html.
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    Today's hearing on the challenges and barriers to accessing 
affordable housing in Indian Country comes at a time when Tribal 
Nations across the country can attest with experience that access to 
cost-effective housing for Indian Country is lacking. NCAI's testimony 
will first identify the current state of housing in Indian Country, 
then identify some impediments and barriers facing Tribal Nations and 
Tribally Designated Housing Entities (TDHEs) when attempting to build 
and finance homes. Finally, while identifying barriers is helpful in 
understanding challenges, it does not always offer a pathway forward 
for creating policy solutions. Therefore, our testimony will also draw 
attention to programs that are working for Indian Country and offer 
recommendations that will allow for the construction and financing of 
homes on tribal lands.
The State of Housing in Indian Country
    Historically, Tribal Nations have faced a pervasive housing crisis 
caused by underinvestment by the Federal Government that has left 
tribal citizens living in substandard and cost-burdensome conditions. 
In 2017, The U.S. Department of Housing and Urban Development (HUD) 
reported that ``the lack of housing and infrastructure in Indian 
Country is severe and widespread, and far exceeds the funding currently 
provided to tribes.'' \6\ HUD also reported that 70 percent of existing 
housing stock in tribal communities is in need of upgrades and repairs, 
many of them extensive. \7\ The 2017 report also found that it would 
take approximately 33,000 new housing units to alleviate overcrowding 
and an additional 35,000 housing units to replace existing units in 
grave condition. \8\ To meet the total need of approximately 68,000 
housing units (new and replacement), factoring in the average 
development cost of a three-bedroom home, the total cost is in excess 
of $33 billion. \9\
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     \6\ U.S. Commission on Civil Rights, ``Broken Promises: Continued 
Federal Funding Shortfall for Native Americans'', 137, (2018), https://
www.usccr.gov/pubs/2018/12-20-Broken-Promises.pdf.
     \7\ HUD, Fiscal Year 2017 Congressional Justifications, 11-12, 
(2016), https://www.hud.gov/sites/documents/FY-2017-CJS-COMBINED.PDF.
     \8\ HUD, ``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'', (2017), https://
www.huduser.gov/portal/sites/default/files/pdf/
HNAIHousingNeeds.pdf.
     \9\ National Congress of American Indians, ``Tribal 
Infrastructure: Investing in Indian Country for a Stronger America'', 
An initial report by NCAI to the Administration and Congress, 2017, p. 
11, https://www.ncai.org/attachments/PolicyPaper-RslnCGsUDiatRYTp
PXKwThNYoACnjDoBOrdDlBSRcheKxwJZDCx-NCAI-InfrastructureReport-
FINAL.pdf.
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    The lack of affordable housing is also a problem in Indian Country, 
with 37.5 percent of Native households spending more than 30 percent of 
their income on housing expenses, an amount considered to be a cost 
burden. \10\ This lack of affordable housing contributes to 
homelessness and overcrowding. Those living in tribal areas often 
report instances of ``hidden'' homelessness, making the issue of 
homelessness less conspicuous in Indian Country than in non-tribal 
areas. The Urban Institute in 2017 found that approximately 99.8 
percent of tribal housing officials surveyed reported that ``doubling 
up'' (i.e., taking in family and friends who would otherwise have 
nowhere else to go) was a problem in their tribal areas. Additionally, 
88 percent of housing officials surveyed said traditional homelessness 
(i.e., sleeping on the street, in an emergency shelter, or someplace 
not meant for human habitation) was an issue in their tribal 
communities. \11\ Designated homeless services are also less common in 
tribal areas. Although homelessness affects nearly all tribal areas, 
only half of the tribal areas visited for Urban Institute surveyed had 
a shelter within their tribal area boundaries. \12\ Additionally, 
tribal communities experience overcrowded homes at a rate of 16 
percent, roughly eight times the national average. \13\ HUD research 
also shows that such overcrowding has a negative effect on family 
health and contributes to the ongoing problems of domestic violence and 
poor school performance in Indian Country. \14\
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     \10\ Ibid.
     \11\ Urban Institute, ``Urban Wire: Homelessness in Indian Country 
Is a Hidden, But Critical, Problem'', (2017), https://urbn.is/2gPtVcJ.
     \12\ Ibid.
     \13\ HUD, ``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'', (2017), https://
www.huduser.gov/portal/sites/default/files/pdf/HNAIHousing
Needs.pdf.
     \14\ HUD, Fiscal Year 2017 Congressional Justifications, 11-4, 
https://www.hud.gov/sites/documents/FY-2017-CJS-COMBINED.PDF.
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Challenges and Barriers To Accessing Affordable Housing
Lending on Indian Trust Land and Burdensome Permitting Processes
    AI/ANs on tribal lands or in remote areas face significant barriers 
to home ownership. These barriers include AI/ANs having some of the 
highest rates of unemployment and poverty, lacking access to credit 
services, and lacking education about what it takes to become a 
homeowner. In 2019, the Federal Deposit Insurance Corporation (FDIC) 
found that 16.3 percent of AI/AN households were unbanked, compared to 
only 5.4 percent of the general population. \15\ Banks and credit 
institutions are less likely to have branches in tribal areas, which is 
due in part to the jurisdictional complexity of lending on tribal 
lands. A 2016 Native Nations Institute study found that Indian Country 
faces ``high interest rates on loans, the inability to use trust land 
as collateral on loans, and a general unwillingness on the part of 
financial institutions to lend to reservation-based applicants.'' \16\ 
Economic and social constraints like lower borrower incomes and limited 
or blemished credit histories broadly impede the expansion of mortgage 
credit to underserved populations. \17\
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     \15\ Federal Deposit Insurance Corportation, ``How American Banks: 
Household Use of Banking and Financial Services'', 2019 FDIC Survey, 
https://www.fdic.gov/analysis/household-survey/2019report.pdf.
     \16\ Native Nations Institute. 2016. Access to Capital and Credit 
in Native Communities (digital version). Tucson, AZ: Native Nations 
Institute. https://nni.arizona.edu/application/files/8914/6386/8578/
Accessing-Capital-and-Credit-in-Native-Communities.pdf
     \17\ HUD, ``Mortgage Lending on Indian Land: A Report From the 
Assessment of American Indian, Alaska Native, and Native Hawaiian 
Housing Needs'', p. vii, (2017), https://www.huduser.gov/portal/sites/
default/files/pdf/NAHSG-Lending.pdf.
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    The unique status of trust lands being inalienable makes it 
difficult for private lenders to obtain security interests in 
individual plots and most private lenders are uneducated on what 
practices they can employ to lend to AI/ANs residing on tribal lands. 
\18\ This makes lenders reluctant to lend to either individual AI/ANs, 
Tribal Nations, and TDHEs interested in developing housing. Further 
exacerbating the issue, the Bureau of Indian Affairs must review all 
trust land leases and provide verification of land ownership via a 
title status report. This verification has historically taken several 
weeks, months, or even years to complete. \19\ In 1977, Congress 
designed the Community Reinvestment Act (CRA) to combat some of these 
issues for low and moderate income areas. Unfortunately, under the 
current iteration of the CRA, banks can fulfill those requirements 
without having to serve AI/AN communities, leaving lending institutions 
with little to no incentive to invest in Indian Country.
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     \18\ U.S. Department of Agriculture (USDA), ``Lending on Native 
American Land: A Guide for Rural Development Staff'', (2006), http://
www.ruralhome.org/storage/documents/nativeamerguideforusda.pdf.
     \19\ Ibid.
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Lack of Access to Housing Tax Credits
    Multifamily housing properties in Indian Areas are few and far 
between and typically require housing subsidies. These housing projects 
depend on tax credit equity and housing grants because debt financing 
for affordable housing is limited in Indian Areas. \20\ The Low Income 
Housing Tax Credit (LIHTC) program is one of the primary resources for 
developing affordable rental housing nationwide, yet LIHTCs are 
substantially underused in Indian Areas.
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     \20\ ``Indian Area'' as defined by 24 CFR 1000.302.
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    Currently, LIHTC allocations are only provided to state governments 
who in turn can provide allocations to Tribal Nations, but often do 
not. Development and operation of affordable housing is more difficult 
because the poverty rate and unemployment rate among tribal citizens is 
more than twice the rest of the Nation. Most properties cannot support 
debt financing because of their tenants' low incomes. Indian 
reservations are located in 70 of the 386 persistent poverty counties, 
meaning they have been in poverty for generations, at least partially 
due to underlying structures of disadvantage. \21\ LIHTCs remain the 
primary mechanism for affordable housing development in the U.S. and 
should be a resource that Indian Country benefits from. \22\
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     \21\ U.S. Department of Agriculture (USDA), ``Lending on Native 
American Land: A Guide for Rural Development Staff'', (2006), http://
www.ruralhome.org/storage/documents/nativeamerguideforusda.pdf.
     \22\ Housing Assistance Council, ``Low Income Housing Tax Credits 
in Indian Country'', (2019), https://www.ncai.org/policy-research-
center/initiatives/LIHTC-in-Indian-Country.pdf.
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Chronic Underfunding for Adequate Housing
    While the Federal Government maintains a unique trust 
responsibility to Tribal Nations and their citizens, there is 
insufficient support for housing on tribal lands. One of the key issues 
is funding stagnation. As inflation grows, the funding amounts rarely 
do. The Indian Housing Block Grant (IHBG) program is an example of a 
key program to support housing needs; however, it is formula-based and 
has maintained the same level of funding for the past 20 years. As a 
result, this critical program has failed to keep pace with inflation, 
leaving many Tribal Nations out in the cold. \23\
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     \23\ U.S. Commission on Civil Rights, ``Broken Promises: Continued 
Federal Funding Shortfall for Native Americans'', 142, (2018), https://
www.usccr.gov/pubs/2018/12-20-Broken-Promises.pdf.
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    The flat-funding of Federal housing programs for Tribal Nations, 
combined with inflation in construction costs over time, has resulted 
in a sharp decrease in the number of affordable housing units developed 
in Indian Country in recent years. \24\ In 2016, the Acting Deputy 
Assistant Secretary at HUD stated that ``one of the greatest 
impediments to developing affordable housing in Indian Country is the 
flat funding of the IHBG for most of the program's history.'' \25\ This 
decrease in the number of affordable housing units is negatively 
mirrored by the growing AI/AN population and their housing needs.
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     \24\ Ibid.
     \25\ Randall R. Akers, then Acting Deputy Assistant Secretary at 
HUD, Testimony, Briefing Transcript, pp. 166-167.
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    In addition to funding shortfalls, the location of many tribal 
communities increases the material and labor costs of home construction 
and imposes additional housing development costs. \26\ Building 
materials must often be brought into tribal communities from miles away 
over substandard roads or even by air, and the availability of 
``qualified and affordable contractors'' is limited. \27\ For many 
remote areas with extreme weather conditions, construction seasons are 
very short, leading to increased costs for already overburdened 
homebuyers.
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     \26\ U.S. Commission on Civil Rights, ``Broken Promises: Continued 
Federal Funding Shortfall for Native Americans'', 142, (2018), https://
www.usccr.gov/pubs/2018/12-20-Broken-Promises.pdf.
     \27\ Ibid.
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Solutions and Suggested Congressional Action
    The barriers presented throughout this testimony underscore the 
need for robust funding increases through flexible programs that allow 
Tribal Nations to address the diverse and extensive housing 
infrastructure and financing needs of their communities. Despite 
mounting challenges, Tribal Nations are now exercising their right of 
self-determination to design and implement their own housing and other 
community development infrastructure programs. In order to support 
tribal sovereignty and increase access to housing for AI/ANs, NCAI 
recommends the following congressional actions:
Reauthorize NAHASDA and Increase Funding for IHBG Formula Grants
    The Native American Housing Assistance and Self-Determination Act 
(NAHASDA), first enacted in 1996, authorized Tribal Nations to self-
determine their housing programs. NAHASDA gave flexibility for Tribal 
Nations to develop, construct, and maintain housing for their members, 
transforming how Federal housing programs addressed housing needs in 
tribal communities. Additionally, NAHASDA consolidated existing housing 
funds into a single block grant, IHBG, resulting in tens of thousands 
of additional housing units being constructed, as well as increased 
tribal capacity to address related infrastructure and economic 
development challenges. IHBG is a formula-based grant that provides 
certainty and security for long-term housing and community development.
    NAHASDA also authorizes two important home loan programs, the Title 
VI Loan Guarantee program (Title VI) and the Section 184 Loan Guarantee 
Program (Section 184). Title VI was created to assist tribes, Alaska 
Native Villages, and TDHEs with financing affordable housing and 
provides Federal guarantees for private market financing of housing 
development in Indian Country. \28\ Section 184 provides a 100 percent 
guarantee to private lenders in cases of home loan default. Tribal 
Nations have successfully participated in this program with an 
extremely low default rate. \29\ Using Section 184, Tribal Nations and 
tribal citizens can purchase an existing home, obtain single-close 
construction loans for stick-built or manufactured homes on a permanent 
foundation, obtain rehabilitation loans, or obtain both a purchase and 
rehabilitation loan.
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     \28\ Department of Housing and Urban Development, ``Title VI Loan 
Guarantee Program Fact Sheet for Lenders'', (2021), https://
www.hud.gov/sites/documents/TITLEVI-FACT-SHEET-LENDERS.PDF.
     \29\ Department of Housing and Urban Development, HUD, ``Mortgage 
Lending on Indian Land: A Report From the Assessment of American 
Indian, Alaska Native, and Native Hawaiian Housing Needs'', p. 31, 
(2017), https://www.huduser.gov/portal/sites/default/files/pdf/NAHSG-
Lending.pdf.
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    In the 116th Congress, Senator John Hoeven introduced S. 4090, the 
NAHASDA Reauthorization Act. This legislation marks the first 
bipartisan reauthorization bill in the Senate since NAHASDA expired in 
2013. S. 4090 proposed to reauthorize NAHASDA programs through 2031, 
create an Assistant Secretary for Indian Housing at HUD, and update 
several key provisions including, but not limited to: streamlining 
environmental review requirements; allowing tribal housing programs to 
access IHS sanitation funding; and tribal eligibility for HUD Housing 
Counseling and Homelessness Assistance grants. NCAI strongly urges 
Congress to reintroduce and pass legislation that reauthorizes NAHASDA 
through 2031 and provide increased funding appropriations for IHBG 
formula grants of at least $1 billion to help address the ongoing 
housing crisis in Indian Country.
Modernize The Community Reinvestment Act To Increase Lending in Indian 
        Country
    Congress should support finalizing the implementation of the Office 
of the Comptroller of Currency (OCC), Federal Reserve Board, and the 
FDIC's most recent CRA proposed rules, Modernization of Community 
Reinvestment Act Regulations. \30\ These rules will address Indian 
Country's lending issues by providing banks with CRA credit for serving 
tribal communities even when Indian Country falls outside their CRA 
assessment areas and creating CRA scoring incentives for banks that 
choose to do business in Indian Country. Congress should also urge the 
Federal Reserve, FDIC, and OCC to increase education of lending in 
Indian Country for regulators and lenders, and to increase ongoing 
communication between credit institutions and Tribal Nations and their 
business enterprises.
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     \30\ Office of the Comptroller of the Currency, Treasury; 
Community Reinvestment Act Regulations; 85 FR 34734 (June 5, 2020), 
https://www.occ.gov/news-issuances/federal-register/2020/85fr34734.pdf.
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Increase Access to the Low Income Housing Tax Credit Program and 
        Provide a Proportionate Rate for Tribal Governments
    Given the enormous needs for housing, NCAI strongly supports the 
expansion of LIHTCs for Tribal Nations to ensure that the needs of 
their citizens are met. Tribal Nations have been disproportionately 
left out of this program and seek increased deployment in Indian 
Country and inclusion in the program's allocation criteria. In April 
2021, Senators Cantwell, Wyden, Young, and Portman introduced the 
Affordable Housing Credit Improvement Act of 2021, which expands the 
definition of Difficult Development Areas to include Indian Areas as 
defined in NAHASDA. NCAI urges Congress to pass similar legislation and 
include a proportionate allocation of funds specifically for tribal 
governments. Providing a proportionate allocation of funds to tribal 
governments will ensure these critical resources reach the populations 
that require this support most.
Permanently Reauthorize the Tribal HUD-VASH Program
    Native veterans have a long history of distinguished service to 
this country. Per capita, they serve at a higher rate in the Armed 
Forces than any other group of Americans and have served in all the 
Nation's wars since the Revolutionary War. Native veterans even served 
in several wars before they were even recognized as U.S. citizens. 
Despite this esteemed service, homelessness is a concern for our Native 
veterans. To combat this issue, Congress created the HUD-Veterans 
Affairs Supportive Housing (HUD-VASH) program. The program has been a 
nationwide success because it combines rental assistance, case 
management, and clinical services for at-risk and homeless veterans. 
Unfortunately, this program is not fully available to Native veterans 
living on tribal lands.
    In the 116th Congress, Senator Jon Tester introduced S. 257, the 
Tribal HUD-VASH Act of 2019. S. 257 would codify and make permanent the 
Tribal HUD-VASH program within the larger HUD-VASH program and ensure 
adequate funding for the program. In addition, the bill would make all 
Tribal Nations and their tribal housing programs eligible for the HUD-
VASH program, which to date has remained limited to the original 26 
recipients. The bill would also call on the Indian Health Service to 
assist the program as requested by HUD or the Department of Veterans 
Affairs (VA).
    NCAI has a standing resolution supporting this legislation, 
Resolution #ECWS-14-001, ``Support for Indian Veterans Housing Rental 
Assistance Demonstration Program in the Native American Housing and 
Self-Determination Act Reauthorization''. Accordingly, NCAI urges 
Congress to pass similar legislation early in the 117th Congress.
Create a $50 million Tribal Set-Aside From the Rural Development 502 
        Direct Loan Program To Establish a National Relending Program 
        for Indian Country
    U.S. Department of Agriculture (USDA) Rural Development (RD) has 
limited staff resources to provide Single Family Housing Direct Loans 
on tribal land. In FY 2020, of the 5,821 direct loans made nationally 
by USDA RD, just 110 were issued to AI/AN borrowers, and only seven of 
those were for homes on tribal lands.
    In 2018, a 502 Direct Loan relending pilot program was announced, 
providing $2 million to two Native Community Development Financial 
Institutions (CDFIs) to relend to eligible Native families in North and 
South Dakota. The demonstration program was highly successful, 
deploying 17 loans mortgage loans in less than a year on two South 
Dakota Indian reservations, Cheyenne River Indian Reservation and Pine 
Ridge Indian Reservation, nearly twice the amount deployed in the 
previous decade, with an additional pipeline of demand from 29 families 
for $3.6 million in mortgage financing on those two reservations alone.
    This pilot program has been successful, in part, due to Native 
CDFIs' experience operating on tribal lands. Support for Native CDFIs 
is essential to solving low rates of lending and home ownership on 
tribal lands. They provide extensive financial and homebuyer education 
to help their clients become self-sufficient private homeowners. The 
proposed expanded relending pilot program would increase the flow of 
mortgage capital to Indian Country by allowing Native CDFIs to be 
eligible borrowers under the 502 Direct Loan Program and enable them to 
relend to eligible families for the construction, acquisition, and 
rehabilitation of affordable housing. NCAI strongly urges Congress to 
pass legislation authorizing the national expansion of this relending 
program and creating a $50 million set aside within the 502 Direct Loan 
program.
Conclusion
    On behalf of NCAI, I again thank you for the opportunity to submit 
testimony and for holding this hearing. Reauthorizing NAHASDA, 
increasing funding for IHBG formula grants, improving tribal access to 
the Low-Income Housing Tax Credit Program while providing a 
proportional rate for tribal governments as compared to State 
governments, modernizing the Community Reinvestment Act to increase 
lending in Indian Country, and reauthorizing critical legislation like 
the Tribal HUD-VASH program will improve housing conditions in Indian 
Country. If Congress does not act, our existing housing stock in tribal 
communities will continue to deteriorate. Our Tribal Nations and their 
citizens will continue to have less than favorable health outcomes, 
struggling economies, and be in a worse position than other citizens 
when the next major disaster arrives. NCAI looks forward to working 
with this Subcommittee and the full Committee to ensure access to 
affordable housing in Indian Country and would be happy to connect 
further on these issues.
                                 ______
                                 
                  PREPARED STATEMENT OF ADRIAN STEVENS
  Acting Chairman of the Board of Directors, National American Indian 
 Housing Council; Executive Director, Seneca Nation Housing Authority, 
              and Member, Seneca Nation, Irving, New York
                              May 27, 2021
    Good Afternoon. My name is Adrian Stevens, and I am the Acting 
Chairman of the Board of Directors of the National American Indian 
Housing Council. I am a member of the Seneca Nation, and I currently 
serve as the Executive Director of the Seneca Nation Housing Authority 
in Salamanca, New York. I would like to thank Chairwoman Smith, Ranking 
Member Rounds, and all Committee Members for having this hearing today 
and for working to ensure the United States is fulfilling its trust and 
treaty obligations towards Indian Country with respect to providing 
safe, affordable housing opportunities in tribal communities and to 
Native people anywhere in the country.
Background on the National American Indian Housing Council
    The NAIHC was created by tribal housing programs in 1974 and for 
nearly five decades has provided invaluable Training and Technical 
Assistance (T&TA) to all tribes and tribal housing entities; provided 
information to Congress regarding the issues and challenges that tribes 
face in their housing, infrastructure, and community development 
efforts; and worked with key Federal agencies to ensure their programs' 
effectiveness in native communities. Overall, NAIHC's primary mission 
is to promote and support American Indians, Alaska Natives and native 
Hawaiians in their self-determined goal to provide culturally relevant 
and quality affordable housing for Native people.
    The membership of NAIHC is comprised of 280 members representing 
469 \1\ tribes and tribal housing organizations. NAIHC's membership 
includes tribes and tribally designated housing entities throughout the 
United States, including Alaska and Hawaii. Every member of this 
Committee serves constituents that are members of NAIHC, either 
directly through tribes located in your States, or generally through 
the United States' Government-to-Government relationship with all 
tribes within the United States. NAIHC's members are deeply 
appreciative of your work to improve the lives of Indigenous Peoples 
throughout the Country.
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     \1\ There are 574 federally recognized Indian tribes and Alaska 
Native villages in the United States, all of which are eligible for 
membership in NAIHC. Other NAIHC members include State-recognized 
tribes eligible for housing assistance under the 1937 Housing Act and 
that were subsequently provided funding pursuant to the Native American 
Housing Assistance and Self-Determination Act of 1996, and the 
Department of Hawaiian Home Lands, the State agency that administers 
the Native Hawaiian Housing Block Grant program.
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Profile of Indian Country
    There are 574 federally recognized Indian tribes in the United 
States. Despite progress over the last few decades, many tribal 
communities continue to suffer from some of the highest unemployment 
and poverty rates in the United States. Historically, Native Americans 
in the United States have also experienced higher rates of substandard 
housing and overcrowded homes than other demographics.
    The U.S. Census Bureau reported in the 2019 American Community 
Survey data that American Indians and Alaska Natives were almost twice 
as likely to live in poverty as the rest of the population--23.0 
percent compared with 12.3 percent. The median income for an American 
Indian Alaska Native household is 30 percent less than the national 
average ($45,476 versus $65,712).
    In addition, overcrowding, substandard housing, and homelessness 
are far more common in Native American communities. In January 2017, 
the Department of Housing and Urban Development (HUD) published an 
updated housing needs assessment for tribal communities. According to 
the assessment, 5.6 percent of homes on Native American lands lacked 
complete plumbing and 6.6 percent lacked complete kitchens. These are 
nearly four times than the national average, which saw rates of 1.3 
percent and 1.7 percent, respectively. The assessment found that 12 
percent of tribal homes lacked sufficient heating.
    The assessment also highlighted the issue of overcrowded homes in 
Indian Country, finding that 15.9 percent of tribal homes were 
overcrowded, compared to only 2.2 percent of homes nationally. The 
assessment concluded that to alleviate the substandard and overcrowded 
homes in Indian Country, 68,000 new units need to be built.
    Since the Native American Housing Assistance and Self-Determination 
Act (NAHASDA) was enacted in 1996, tribes have built over 37,000 new 
units according to HUD. However, as the appropriations for the Indian 
Housing Block Grant (IHBG) (established by NAHASDA) have remained level 
for a number of years, inflation has diminished the purchasing power of 
those dollars, and new unit construction has diminished as tribes focus 
their efforts on existing unit rehabilitation. While averaging over 
2,400 new unit construction between FY 2007 and 2010, new unit 
construction has dropped in recent years with only 2,000 new units 
between 2011 and 2014, and HUD estimating less than 1,000 new units in 
future years as tribes maintain existing housing stock over new 
development.
Status of Housing Opportunities for Native Americans
    There remains a large unmet need for quality, affordable housing in 
tribal communities. As Members of the Committee are aware, there is a 
housing shortage across the country, and that is definitely true for 
Native communities. With a lack of consistent data collection year-to-
year, NAIHC is largely relying on the American Indian, Alaska Native, 
and Native Hawaiian Housing Needs Study, published by HUD in January 
2017. The report identified an unmet need of 68,000 units to address 
overcrowded and substandard housing conditions. With new housing 
construction or acquisition fairly stagnant around 1,000 new units per 
year in tribal communities across the United States, we do not expect 
the unmet need to have changed. Additionally, many of NAIHC's members 
have opined that they believe the 2017 Study's unmet need calculation 
to be underestimated.
    The large unmet need is persistent, and largely due to insufficient 
resources being dedicated to reverse the trends. In 2018, the United 
States Commission on Civil Rights updated its ``Broken Promises'' 
report first released in 2003, and found that housing conditions had 
deteriorated, with the number of overcrowded households or households 
with inadequate plumbing growing by 21 percent, and the number of 
families facing severe housing costs growing by 55 percent.
    Despite these trends moving in the wrong direction, Congress has 
been decreasing the amounts of housing assistance to tribal communities 
each year through stagnant funding of NAHASDA programs while inflation 
has grown over the past 20 years. In FY 2020, Congressional IHBG 
formula funding of $650 million provided roughly \2/3\ the purchasing 
power that tribes received at the inception of NAHASDA in FY 1998 ($600 
million in FY 1998). Tracking IHBG funding since NAHASDA's passage 
found that annual appropriations compared to inflation-adjusted levels 
have caused tribal housing programs to lose $3.4 billion since FY 1998. 
Recent additions to NAHASDA programs, such as the competitive IHBG 
funding, are welcome and encouraging, but alone are insufficient to 
make up for the loss of funding over time.
    To put the funding in another perspective, the FY 2021 IHBG funding 
levels provide 379 tribes/grantees with less than $500,000 to operate 
their housing program, which we expect to manage their existing housing 
units, provide low-income rental assistance, other housing services AND 
develop new housing units. Further, 175 of the IHBG grantees received 
less than $100,000 a year to carry out these activities. While some of 
the tribes form umbrella organizations to create some efficiencies, it 
should be easy to see why we're not making much progress against the 
levels of unmet need.
    While the funding of NAHASDA programs continues to be an issue, the 
program itself has built the capacity of tribal housing programs across 
the country. Tribes have been able to rely on consistent, dedicated 
funding through NAHASDA for over 20 years, which has allowed them to 
create housing programs and develop and train dedicated staff to 
operate those housing programs. The success of tribal housing programs 
was evident early on in NAHASDA, when tribes were producing new housing 
units at rates similar to or higher than HUD was prior to NAHASDA's 
enactment. NAHASDA has also increased the local control of funding as 
it is the tribes themselves that develop their own Indian Housing Plan 
for the communities. These plans are tailored to the individual tribe's 
priorities for housing and have provided the flexibility tribes need to 
carry out their programs.
    It is with that upgraded capacity of tribal housing programs 
provided for by NAHASDA that we can begin to look at the full landscape 
of Federal housing resources and programs. HUD itself has numerous 
housing programs and resources, some general, some tribe specific. 
Tribal programs include the Indian Community Development Block Grant 
(ICDBG), the HUD 184 Native American Loan Guarantee Program, NAHASDA 
Title VI Loan Guarantee Program, the formula funded and competitive 
IHBG programs, and Native Hawaiian programs. Other HUD programs have 
varying levels of eligibility for tribes, and NAIHC has advocated both 
to Congress and with our Federal partners to improve tribal access to 
these more national programs. The best example is the HUD Housing 
Counseling program, which tribes are currently ineligible to apply for 
funds but may soon find themselves subject to housing counseling 
regulations not tailored for tribal communities. Another example is the 
Continuum of Care program, which was addressed last Congress by the 
inclusion of the Tribal Access to Homeless Assistance Act in the FY 
2021 Consolidated Appropriations Act. NAIHC thanks Senator Smith who 
introduced the bill and all the members who supported the passage of 
this bill.
    In addition to HUD, tribes can find housing resources at the U.S. 
Treasury, such as tax credit programs and the recently created 
Emergency Rental Assistance Program and Homeowner Assistance Funds; the 
U.S. Department of Agriculture and its Rural Housing programs; the 
Veterans Administration and its Native American Direct Loan Program; 
and others.
    NAHASDA was passed in 1996 to streamline tribes' access to housing 
programs dollars by consolidating multiple programs into a single block 
grant. However, with the lack of increased appropriations to NAHASDA 
programs, tribes are again piecing their housing programs together by 
finding resources from across the Federal Government. In a 2018 survey 
conducted by NAIHC, only 17 percent of our members who responded 
indicated they were going to utilize non-HUD funds in their programs. 
So while there are various resources available to tribes, it takes a 
lot of work to put these pieces together and leverage multiple funding 
opportunities together, while also operating the day-to-day housing 
program.
Improvements To Existing Housing Programs
    Reauthorization of NAHASDA, Increased Resources: NAHASDA was last 
reauthorized in 2008 and expired in 2013. While Congress has continued 
to provide funding to NAHASDA programs, and even increased some funds 
in the last few years, there are some programmatic changes that recent 
reauthorization bills contain that could streamline various aspects HUD 
and IHBG programs. For example, one long standing fix would address 
duplicative environmental reviews, which tribes often face when they 
leverage multiple Federal sources of funds. Recent reauthorization 
bills have also contained provisions to create an Assistant Secretary 
for Indian Housing to provide enhanced attention at the senior 
leadership of HUD.
    Make HUD-VASH Permanent and Expand to All Tribes: Currently, only 
26 tribes have participated in the Tribal HUD-VASH program, which 
provides both housing and supportive services to tribal veterans and 
their families that are homeless or at-risk of homelessness. HUD-VASH 
is another example of a larger, national housing program that 
originally left tribal communities out when it was created in 2008. 
Congress expanded the program through a tribal demonstration project 
beginning in FY 2015. The program has identified obstacles, such as the 
lack of housing stock in tribal communities to house veterans through 
the program and the need for greater supportive services from the VA to 
native veterans in tribal communities. Many of the tribes participating 
in the pilot have found ways to provide these supportive services 
through various partnerships between the VA and tribal or IHS 
professionals and tribes may be more able to secure housing units for 
the program if it was made permanent and tribes had more certainty for 
future funding of the program.
    It is well known that Native Americans have served in the United 
States Armed Forces as higher rates than any other demographic, so it 
is vital that Native veterans are provided the support they deserve and 
have earned through their service. Native veterans are not limited to 
the 26 tribes that have participated in the program, and we look 
forward to working with Congress to ensure the program is expanded to 
include all tribe and their veterans. The full Senate has passed the 
Tribal HUD-VASH Act in each of the last two Congresses and has faced 
some obstacles in the House. NAIHC will continue to work to address any 
outstanding issues to make sure HUD-VASH is made permanent and working 
for all tribal communities.
    Section 184 Loan Guarantee Program: The 184 Loan Guarantee program 
helps a tribe or tribal member secure a mortgage for an existing or 
new-construction home by providing a loan guarantee to a private sector 
bank or lending institution. While the program is targeted to tribal 
communities and nearby service areas, the program has struggled to 
incentivize mortgages on trust lands in tribal communities, where many 
families reside on land their families have held for generations. 
Obstacles include a slow and burdensome title process involving the 
Department of the Interior's Bureau of Indian Affairs and banks and 
lenders general preference to work with the more familiar property held 
``in fee.'' Improvements include streamlining the process at the BIA, 
encouraging more private lenders to participate in the program 
generally and participate through mortgages specifically on trust 
lands.
    State Housing Programs and Passthroughs: Several Federal programs, 
notably the Low Income Housing Tax Credits and the Housing Trust Fund, 
establish funds or processes that operate at the State-level. While 
many of these States utilize the unmet housing needs in tribal 
communities to improve their allocations, there is not necessarily a 
mechanism that requires the States to prioritize tribal areas in 
receiving the final benefit of these Federal housing programs. The 
result is a mix of effectiveness of these programs in tribal 
communities, where the relationship between Sate and tribal officials 
can greatly affect the final impact of these programs for tribes. In 
States where we see tribal or rural areas receiving some type of 
allocation or increased application scores, tribes have been successful 
in developing new projects with these Federal funds.
    However, there is often a blind eye turned to tribal communities 
(and not always intentional) as State programs often believe tribal 
housing issues are a Federal issue, or that the tribe can rely on 
direct Federal funding. This is not unique to States, as even non-HUD 
Federal housing programs can omit tribal communities, believing that 
tribes can rely solely on NAHASDA or BIA programs to meet their 
community housing needs.
    Training and Technical Assistance: The current model of TTA to 
tribal housing programs requires tribes to submit requests to HUD 
offices. Those requests are then analyzed and then submitted to 
national or regional TTA providers, of which NAIHC is one of several. 
However, the model likely discourages tribes to request TTA as they 
would be submitting requests to the same Federal agency that oversees 
their program implementation or funding. NAIHC believes that providing 
more flexibility to the TTA providers to receive and respond to tribal 
TTA requests directly can improve the delivery of those services and 
encourage tribal housing programs to actually address their training 
needs.
    Restore Access to Section 8 Vouchers: Prior to NAHASDA, many tribes 
have been receiving tenant-based vouchers to provide low-income rental 
assistance to members in tribal communities. With NAHASDA providing the 
single block grant to tribes, NAHASDA expressly restricted tribes from 
accessing vouchers moving forward. However, with NAHASDA funds 
remaining stagnant (or decreasing due to inflation), tribes find it 
difficult to provide the same low-income rental assistance year-to-year 
or to expand that assistance as new housing units come online in their 
communities. Congress routinely adds vouchers to the larger national 
program to keep pace with the need, or to fund existing vouchers 
adequately each year, while tribal programs have no similar mechanism. 
While the restriction on section 8 vouchers could be removed entirely, 
past NAIHC resolutions have called for the specific restoration of 
vouchers for LIHTC projects in tribal communities, as the two programs 
work together well in the non-tribal setting.
    Improve the Effectiveness of non-HUD Housing Programs in Indian 
Country: As stated above, there are several Federal housing programs 
established outside of HUD. While these programs are often national in 
scope, the lack of attention paid by these programs to tribal 
communities often limits their impact for native families. For 
instance, USDA Rural Housing programs are tailor made for rural areas, 
and often are targeted to low-income families, yet their reach to 
tribal communities has been limited. Often this is due to USDA program 
staff not geographically located near the tribal community or limited 
outreach to families in those tribal communities. We're often asking 
our overburdened tribal housing professionals to know the USDA programs 
well enough to connect those families with USDA resources. A recent 
pilot project in South Dakota has allowed the USDA 502 Single Family 
Home Loan program to lend to Native CDFIs as intermediaries, while 
those Native CDFIs carry out the lending directly in tribal 
communities. This has been successful, with the Native CDFIs largely 
maxing out their mortgage lending with the funding available under the 
pilot. This on-the-ground presence in tribal communities as well as the 
comfort level of native families working with native housing 
professionals has allowed more native families to access USDA 
resources. This model could be expanded both throughout USDA Rural 
Housing programs and through other Federal housing programs, such as 
the VA's Native American Direct Loan Program. The NADLP program only 
have 7-10 staff to market the program and serve Native American 
veterans in all 574 tribal communities across the country. As a result 
of the lack of presence of that program, very few mortgage loans are 
provided to Native veterans each year.
    Further Incentivize Private Investment in Tribal Communities: 
Indian Country is almost always last to receive the attention of 
private, commercial banking. The lack of economies of scale in tribal 
communities, increased development costs, and the complexities of 
tribal lands and communities (both actual and perceived) simply lead 
private banking to avoid tribal areas. While there have been national 
tax credit programs or other incentives available for years to spur 
development in underserved areas, the programs have generally been less 
effective for Indian Country. Strengthening incentives for development 
in Indian Country or creating specific set-asides or mandates through 
these programs is needed to ensure that tribal communities are not left 
further behind.
    Including Indian Country in Infrastructure Packages: Development 
costs are higher in Indian Country. The rural nature of most tribal 
communities and the lack of preexisting roads, water, electricity and 
other infrastructure increase the cost of developing new housing. As 
Congress works to address the infrastructure needs of the entire 
Nation, it must recognize the lack of infrastructure funding over 
decades to tribal communities and include Indian Country appropriately. 
While NAIHC believes infrastructure should include housing resources 
directly, any investments in infrastructure in tribal communities will 
improve tribal housing programs' ability to plan and develop new 
housing construction in the future.
Impacts of COVID on Tribal Housing
    Finally, the COVID-19 pandemic has also highlighted how far behind 
we are in meeting the housing needs of Indigenous Peoples of the United 
States. The housing shortage in tribal communities causes high levels 
of overcrowded homes. The 2017 HUD Assessment estimates that 1 in 6 
homes in Native communities suffers from overcrowding, which is eight 
times the national average. It is not uncommon for three or more 
generations to live under the same roof. These overcrowded conditions 
do not allow families from practicing safe social distancing that is 
necessary to prevent or reduce the spread of a virus like COVID-19.
    The 2017 HUD Housing Needs Assessment also found high rates of 
substandard plumbing in 5.6 percent of tribal homes, which is 4 times 
the national average. This lack of access to clean water in many homes 
means families can't practice the basic safety precaution of adequate 
hand-washing and other sanitation practices. With these issues 
affecting tribal homes at higher rates, it is no wonder that rates of 
infection of COVID-19 are 1.7 times higher than non-native 
demographics.
    To its credit, Congress has recognized the impacts of COVID-19 on 
tribal communities and passed a number of relief packages that include 
new resources for tribes and tribal housing programs. Unfortunately, 
new homes cannot be built at the snap of a finger, and years of 
inadequate funding for tribal housing and infrastructure have left 
tribal communities and families with few options to respond to the 
immediate impacts of COVID-19 or prevent its spread.
    Through the CARES Act last spring, tribal housing programs were 
provided $200 million of Indian Housing Block Grant funds, in addition 
to annual appropriations. Unfortunately, $200 million for just under 
600 grantees does not go far to address the immediate impacts of COVID-
19 on tribal housing. Over half of those grantees received less than 
$100,000 in additional funds to respond to their communities' housing 
needs under COVID-19. As development of new units and infrastructure 
often takes months or years of planning, tribes have been forced to 
acquire new housing units for short- or long-term use. However, many 
tribes are located in areas where the availability of new units is very 
low or of substandard quality and needing improvement. NAIHC 
understands that tribal approaches to address their local needs have 
varied across the country. Some tribes were able to utilize other 
tribal community buildings, in some cases including hotels or casinos, 
to alleviate overcrowded conditions or to use as makeshift quarantine 
facilities. Many tribes also provided increased rental assistance to 
families to allow families to separate into multiple homes. Where local 
units were unavailable, some tribes have had to help tribal members 
find housing in nearby towns away from tribal centers, sometimes 50-100 
miles away.
    The CARES Act also provided $100 million for emergency grants under 
the Indian Community Development Block Grant. These funds were provided 
to 96 tribes. According to a HUD press release, these grants helped 
provide for the construction of new rental housing to address 
overcrowding and homelessness; the construction of water 
infrastructure, including water wells and water lines; the purchase and 
renovation of an old clinic facility to facilitate access to testing, 
diagnosis, and treatment of Tribal members; and the provision of 
emergency food supplies to geographically isolated communities.
    With the passage of the American Rescue Plan, tribes will see 
another $450 million in Indian Housing Block Grant funding and $280 
million emergency grants under the Indian Community Development Block 
Grant. NAIHC expects that this additional round of funding will provide 
for even greater development or acquisition of new units beyond what 
was provided by the CARES Act. One large concern we have heard from 
tribes, and the larger housing industry, is that COVID-19 had disrupted 
construction materials pipelines and building contractors in a way that 
has caused a sharp spike in costs of construction.
    Congress has also provided substantial set-asides to tribal housing 
programs specifically for rental assistance, utilities, and now 
mortgage assistance in tribal communities. These funds will be able to 
help thousands of families and individuals in tribal communities across 
the country. Combined, the $1.3 billion in rental and mortgage 
assistance funds provided to tribes is roughly twice the annual funding 
provided under NAHASDA. Tribes and the NAIHC are still working with the 
Treasury Department to ensure that these funds are flexible enough to 
be fully effective in tribal communities.
    Many tribes have already been operating some form of rental 
assistance in their communities with their NAHASDA funds, however 
because the recent Emergency Rental Assistance Program is operated 
through the U.S. Treasury, tribes are having to update their policies 
and comply with more rigid eligibility requirements. The additional 
time provided in the American Rescue Plan for ERAP grantees will help 
alleviate some of these issues by giving tribes more time to find 
eligible families and individual households. One issue that NAIHC has 
heard consistently is the need to expand the level of eligibility 
beyond 80 percent local AMI. Many tribes existing rental assistance 
programs have already provided assistance to these community members, 
and tribes are seeing families above that eligibility threshold also 
struggling to pay rent but ineligible for assistance.
    We believe the flexibility that Congress included in the mortgage 
assistance program in the American Rescue Plan of expanding eligibility 
to 100 percent of the greater of local or national AMI will allow more 
families and individuals to receive assistance through that program.
    While tribes appreciate the additional resources provided by 
Congress over this past year, the lack of progress of new housing 
developing in Native communities over the last 20 years cannot be 
reversed overnight. COVID-19 has put a spotlight on the extreme housing 
shortage in Indian Country. NAIHC hopes the disparate impacts of the 
COVID-19 pandemic in tribal communities spurs Congress to work with 
Tribes and tribal housing programs to address these long-standing 
housing needs in a way that both prevents a future pandemic from 
running rampant in our communities and more directly provides equitable 
housing opportunities for Native American, Alaska Native and Native 
Hawaiians.
Conclusion
    NAIHC wants to thank the members of this Committee for holding this 
important hearing and we want to thank all the members of Congress who 
have introduced and sponsored bills and supported efforts to improve 
housing opportunities in tribal communities. Tribes have consistently 
shown how far they can stretch their housing dollars to help the most 
members of their community as possible, and NAIHC and tribal housing 
programs look forward to working with our partners in Congress and 
Federal agencies to continue building safe, affordable housing in our 
communities.
                                 ______
                                 
                PREPARED STATEMENT OF ALENE TCHOURUMOFF
  Senior Vice President, Community Development and Center for Indian 
Country Development, Federal Reserve Bank of Minneapolis, Minneapolis, 
                               Minnesota
                              May 27, 2021
    Thank you, Chair Smith, Ranking Member Rounds, and Members of the 
Committee, for the opportunity to testify today on behalf of the Center 
for Indian Country Development at the Federal Reserve Bank of 
Minneapolis. The Center for Indian Country Development, or CICD, 
supports tribes in reaching their full economic potential through 
actionable research and community collaboration to advance solutions in 
Indian Country.
    Tribal nations in the United States have a range of housing 
experiences and challenges. The shared features of housing markets in 
Indian Country derive from the long history of Government-to-Government 
relationships between the U.S. Government and tribes. These 
relationships are codified in the more than 370 treaties signed by both 
the United States and American Indian tribes. \1\ Many of these 
treaties guarantee American Indian tribes' rights to maintain a home 
and a homeland. The promises in these treaties live on in the trust and 
treaty responsibility that the Federal Government maintains toward the 
574 federally recognized tribes in the United States. And yet, many of 
those promises remain unfulfilled.
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     \1\ ``Broken Promises: Continuing Federal Funding Shortfall for 
Native Americans'', Briefing Report, U.S. Commission on Civil Rights, 
December 2018, p. 1.
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    This testimony will lay out the scale of housing needs in Indian 
Country and describe some approaches to increasing housing availability 
for American Indians. Indian Country refers to the tribal lands that 
are under the control of sovereign Native nations. About 22 percent of 
people that identify as American Indians--whether alone or in 
combination with another race or ethnicity--live in Indian Country, and 
another 25 percent live nearby. \2\ Thus, a majority of American 
Indians live away from Indian Country, often in urban and suburban 
areas. \3\ However, many American Indians spend time living both on or 
near reservations and in more urban locales, \4\ so our focus today on 
the housing issues in Indian Country is relevant to more of the 
nation's 5.2 million American Indians and Alaska Natives than Indian 
Country's population numbers alone might suggest. \5\
---------------------------------------------------------------------------
     \2\ Nancy G. Pindus, 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 (hereafter HUD 
Tribal Area Study), p. 18.
     \3\ Randall Akee, ``Sovereignty and Improved Economic Outcomes for 
American Indians: Building on the Gains Made Since 1990'', in Boosting 
Wages for U.S. Workers in the New Economy: Ten Essays on Worker Power, 
Worker Well-Being, and Equitable Wages, Washington Center for Equitable 
Growth, January 2021, p. 163.
     \4\ Diane K. Levy, Jennifer Biess, Abby Baum, Nancy Pindus, and 
Brittany Murray, ``Housing Needs of American Indians and Alaska Natives 
in Urban 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 (hereafter HUD Urban Area Study), p. x.
     \5\ HUD Tribal Area Study, p. 18.
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Indian Country Faces a Severe Housing Shortage and Substandard Housing 
        Conditions
    Homes on tribal lands are in short supply, and often in physically 
substandard condition. Around 16 percent of American Indians and Alaska 
Natives in tribal areas live in households that are considered 
overcrowded--a rate about seven times higher than that of the general 
U.S. population. \6\ Available housing is often physically substandard: 
23 percent of American Indians living in Indian Country reside in homes 
that have at least one physical problem, compared to about 5 percent of 
other Americans. \7\ For example, American Indian households in Indian 
Country are 3.7 times as likely as other households to lack complete 
plumbing. \8\ A 2017 study from the U.S. Department of Housing and 
Urban Development (HUD) estimated that reservations needed an 
additional 68,000 units of housing to eliminate overcrowding and 
replace severely inadequate units. \9\ Using a plausible range of 
possible construction and infrastructure development costs, Indian 
Country needs tens of billions of dollars worth of new housing. \10\
---------------------------------------------------------------------------
     \6\ HUD Tribal Area Study, p. 67.
     \7\ HUD Tribal Area Study, Foreword.
     \8\ Shiloh Deitz and Katie Meehan, ``Plumbing Poverty: Mapping Hot 
Spots of Racial and Geographic Inequality in U.S. Household Water 
Insecurity'', Annals of the American Association of Geographers, 109:4, 
2019, pp. 1092-1109.
     \9\ HUD Tribal Area Study, p. 76.
     \10\ CICD calculations using 2019 Home Mortgage Disclosure Act 
data. Lacking reliable data on construction costs, we examine average 
home prices and assume that 68,000 new units are needed. These and 
other HMDA-derived calculations in this document exclude Alaska and 
Hawaii. The cost of constructing new housing may, of course, be 
substantially different than the average value of existing homes.
---------------------------------------------------------------------------
    Overcrowding in Indian Country has serious consequences; HUD 
research has shown that it has a negative effect on family health and 
contributes to domestic violence and poor school performance. \11\ It 
also complicates attempts to gauge home ownership levels. Traditional 
measures of home ownership divide the number of owner-occupied housing 
units by the number of occupied housing units. In 2010, the 67 percent 
home ownership rate in Indian Country was comparable to the overall 
U.S. home ownership rate. \12\ But considering that Indian Country 
housing units are more likely to be overcrowded and contain multiple 
families, the share of people who own the homes they live in is almost 
certainly much lower in Indian Country than in the United States 
overall. This is supported by data showing lower home ownership rates 
in areas of Indian Country that were likely to have higher-quality 
supply of housing and thus lower overcrowding rates. \13\
---------------------------------------------------------------------------
     \11\ HUD, Fiscal Year 2017 Congressional Justifications, p. 11-4.
     \12\ L.S. Pettit, et al., ``Continuity and Change: Demographic, 
Socioeconomic, and Housing Conditions of American Indians and Alaska 
Natives'', HUD Office of Policy Development and Research, January 2014, 
p. 54.
     \13\ Miriam Jorgensen, and Randall Akee, ``Accessing Capital and 
Credit in Native Communities'', Native Nations Institute, 2017, p. 46.
---------------------------------------------------------------------------
    Home ownership rates for Native Americans in Indian Country stayed 
relatively steady from 2000 to 2010, \14\ contrasting with survey data 
showing that 90 percent of Native American renters in tribal areas want 
to own their home, \15\ and with long-term economic gains among Native 
American households. In the last few decades, tribal economies have 
grown considerably. Native Americans living on reservations saw 
inflation-adjusted, per-capita income growth of 32.5 percent in the 
1990s and 10.5 percent in the 2000s, both well above the corresponding 
rates for the U.S. as a whole. \16\
---------------------------------------------------------------------------
     \14\ See n. 12.
     \15\ HUD Tribal Area Study, p. 86.
     \16\ Estimates are for reservations excluding the Navajo Nation. 
From Randall Akee and Jonathan Taylor, ``Social and Economic Change on 
American Indian Reservations: A Databook of the U.S. Censuses and the 
American Community Survey 1990-2010'', The Taylor Policy Group, Inc., 
May 2014.
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How Did Housing Conditions in Indian Country Get to This Point, and Why 
        Have Housing Problems Persisted Despite Overall Economic Gains?
    There are many reasons for the housing issues in Indian Country. 
Given the unique status of Native nations and their relationship with 
the United States, many of these reasons are tied to the Federal 
Government's past actions and present polices. This section of the 
testimony will discuss how the following factors contribute to Indian 
Country's housing issues:

    The prevalence of trust land in Indian Country;

    Barriers in access to consumer credit;

    Underfunding or underutilization of Indian Country 
        programs; and

    Conflicting or complicating requirements across Federal 
        programs.

Legal Status of Land in Indian Country Can Be a Challenge for Housing
    In Indian Country, the status of land poses unique challenges to 
home ownership and housing development. About 60 million acres of 
American Indian lands are held in trust by the Federal Government and 
managed by the Bureau of Indian Affairs (BIA). \17\ Titles of land held 
in trust cannot be conveyed or sold without the consent of the Federal 
Government. For years, tribal organizations and lenders that do 
business in Indian Country have noted that clearing title for trust 
land is much more time-consuming than doing so for nontrust land.
---------------------------------------------------------------------------
     \17\ ``Tribal Leaders Handbook on Homeownership'', Federal Reserve 
Bank of Minneapolis and Enterprise Community Partners, 2018, p. 79.
---------------------------------------------------------------------------
    In most cases, obtaining a home mortgage on trust land requires a 
certified title status report (TSR) from the BIA. However, borrowers 
consistently report delays in the delivery of certified TSRs that 
result in longer mortgage timeframes for trust land than for fee-simple 
land. As recently as 2019, a tribal leader testified before the United 
States Senate Committee on Indian Affairs that residential mortgages on 
his reservation were taking more than a year to clear the TSR process, 
despite past commitments to a 30-day timeline. CICD has heard anecdotes 
about months- or years-long TSR-caused delays.
Barriers in Access to Credit Limit Home Ownership Opportunities
    In addition to the TSR process, home buyers on trust land must 
often use a leasehold mortgage. Residential mortgage lenders typically 
require that a mortgagor pledge as collateral their fee-simple 
(ownership) interest in the land underlying the financed real estate. 
This option is not available in the tribal residential mortgage context 
if the mortgagor leases--rather than owns--the underlying tribal land. 
In that case, the residential mortgage lender would require that the 
mortgagor pledge leasehold interest in the land (and any leased 
buildings).
    As well as being procedurally distinct from mortgages in most of 
the United States, mortgages are often more expensive in Indian 
Country. In 2019, Native American borrowers on reservations who took 
out high-priced mortgages received an average interest rate of 7.0 
percent, compared to 5.5 percent for White, non-Native American 
borrowers with high-priced mortgages who live near reservations. \18\ 
As a result of this interest-rate differential, White, non-Native 
American borrowers living near reservations could pay considerably less 
in interest over the lifetime of the mortgage. For example, on a 
$200,000 loan, the interest savings would be $70,000. \19\
---------------------------------------------------------------------------
     \18\ A ``high-priced'' loan is defined as having an interest rate 
at least 1.5 percentage points more than the average prime offer rate.
     \19\ CICD calculation assuming a 30-year mortgage.
---------------------------------------------------------------------------
    Legal complexities lead many Indian Country mortgages to be 
nonconforming-that is, outside the typical requirements of resale to 
the Government-sponsored enterprises (GSEs) like Fannie Mae and Freddie 
Mac. With this weaker market for mortgage resale or conversion into 
mortgage-backed securities, loans in Indian Country for traditional, 
stick-built construction are more likely to have higher interest rates. 
Under ``duty-to-serve'' requirements, the GSEs are actively working to 
address this particular barrier to better mortgage access in Indian 
Country.
    Potentially to avoid the complexities of leasehold mortgages, 
Native Americans on tribal lands turn to manufactured housing at a 
higher rate than other Americans. \20\ Loans for manufactured housing, 
which are often chattel (personal property) loans rather than mortgage 
loans, typically carry higher interest rates than mortgages for 
traditional, stick-built homes. \21\ Our economists' analysis suggests 
the increased use of manufactured housing in Indian Country--which may 
be in part caused by the Indian Country housing challenges discussed in 
this testimony--accounts for one-quarter to one-third of the disparity 
in mortgage costs that Native Americans face. \22\.
---------------------------------------------------------------------------
     \20\ Donna Feir, ``The Higher Price of Mortgage Financing for 
Native Americans'', CICD Working Paper 2019-06, Federal Reserve Bank of 
Minneapolis, 2019.
     \21\ Laurie Goodman and Bhargavi Ganesh, ``Four Ways Financing 
Differs for Manufactured Homes'', Urban Wire: Housing and Housing 
Finance blog, Urban Institute, July 27, 2018.
     \22\ See n. 20.
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Appropriations for the Indian Housing Block Grant, a Major Source of 
        Housing Funding in Indian Country, Have Been Largely Flat Since 
        Its Inception
    The Native American Housing Assistance and Self Determination Act 
of 1996 (NAHASDA) bundled previously separate sources of funding into 
the Indian Housing Block Grant (IHBG) and gave tribes primary 
responsibility over the use of this Federal assistance. From its 
initial FY 1998 allocation of $600 million, which was insufficient to 
meet the backlog of housing development needs, the IHBG increased to 
$650 million in FY 2001 and has remained relatively flat in nominal 
dollars since. \23\ Had the initial $600 million appropriation kept 
pace with inflation, tribes would have had roughly $3.4 billion more in 
2021 dollars to invest in housing through FY 2019. \24\
---------------------------------------------------------------------------
     \23\ Written testimony of Lourdes Castro Ramirez, Principal Deputy 
Assistant Secretary for Public and Indian Housing, U.S. Department of 
Housing and Urban Development, United States Senate Committee on Indian 
Affairs, ``The President's Fiscal Year 2017 Indian Country Budget'', 
March 9, 2016, p. 2.
     \24\ CICD staff calculation. Note that this does not include $100 
million in FY 2018 and FY 2019 for a new, competitive companion to the 
IHBG.
---------------------------------------------------------------------------
    Congress added $100 million in competitive funding to the IHBG 
appropriation in 2018 and in the past year has made significant 
investments of funding for NAHASDA. Pandemic relief through the 
Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES Act) 
and the American Rescue Plan Act of 2021 provided an additional $650 
million. \25\ While this greatly increases the amount of IHBG dollars 
available in the short-term, it should be considered in the context of 
the estimated tens of billions of dollars needed for new housing in 
Indian Country or the housing assistance that cost-burdened households 
need. \26\
---------------------------------------------------------------------------
     \25\ CICD staff analysis of Federal tribal housing appropriations 
in the Coronavirus Aid, Relief, and Economic Security Act; Consolidated 
Appropriations Act, 2021; and the American Rescue Plan Act of 2021.
     \26\ See analysis at n. 9.
---------------------------------------------------------------------------
HUD's Section 184 Program Is a Powerful Tool But Take-Up on Tribal 
        Lands Is Limited
    The HUD Indian Home Loan Guarantee Program, commonly known as 
Section 184, encourages lenders to finance Native American home buying 
by guaranteeing Native Americans' mortgages. The program was originally 
available only to mortgages for homes on trust lands, but HUD revised 
its Section 184 guidance in response to years of low usage and now 
allows for lending off of trust land.
    The program is utilized much less frequently on tribal trust lands 
as compared to non-tribal lands or tribally owned, non-trust lands. 
\27\ In fact, the annual number of Section 184 mortgages made on trust 
lands has not shown sustained growth since the early 2000s. \28\ 
Because Section 184 loans have Federal guarantees and nominally present 
no risk to the lender, their limited use on trust land likely results 
more from lenders' levels of expertise in working with the program, 
their business strategies, or other factors rather than borrowers' 
financial characteristics. Based on CICD conversations with some 
lenders, when in the early years of the program traditional lenders 
invested in the necessary staff capacity to efficiently deploy the 
Section 184 program, loans using the Section 184 guarantee seemed to be 
profitable for lenders. However, lenders without the needed expertise 
may believe that the administrative costs of the program outweigh the 
benefits.
---------------------------------------------------------------------------
     \27\ Written Testimony of Patrice H. Kunesh, Director, Center for 
Indian Country Development, Federal Reserve Bank of Minneapolis, United 
State Senate Committee on Indian Affairs, ``Lending Opportunities: 
Opening the Door to Homeownership in Indian Country+'', October 16, 
2019 (hereafter CICD Lending Opportunities), p. 8.
     \28\ CICD Lending Opportunities, p. 8.
---------------------------------------------------------------------------
The Complexity of Building in Indian Country Constrains Efforts To Grow 
        Housing Supply
    As discussed above, homes are in short supply and often in 
substandard condition on tribal lands. Meanwhile, the high cost and 
complexity of building and financing homes in Indian Country stymies 
efforts to increase housing availability. In addition, the long history 
of disinvestment and unfulfilled Federal commitments has left many 
Native nations with inadequate infrastructure, thus limiting access to 
necessities like transportation and clean water. \29\ As a result, 
building new housing in Indian Country often requires expensive 
investments in infrastructure above and beyond the cost of housing 
construction alone. Seven out of 10 tribal leaders identified the cost 
of infrastructure development as one of the top three barriers to new 
housing development in Indian Country, higher than the number that 
identified the availability of labor (39 percent) or a lack of funds 
(34 percent). \30\
---------------------------------------------------------------------------
     \29\ U.S. Commission on Civil Rights, Broken Promises report, p. 
1. (See n. 1 for full reference.)
     \30\ HUD Tribal Area Study, p. 127.
---------------------------------------------------------------------------
    Tribal governments developing new housing often use multiple 
Federal funding streams. A project may blend resources from both Indian 
Country-specific and non-Native-focused programs and agencies like the 
BIA, U.S. Department of Agriculture (USDA), U.S. Department of the 
Treasury, HUD, or others. This frequent braiding of resources 
introduces additional administrative burden and complexity, as programs 
vary on everything from income limits to requirements for lead 
abatement. Different Federal funding sources may require different 
environmental reviews, historic preservation compliance, and cultural 
surveys, and each individual review adds time and expense to housing 
construction. \31\
---------------------------------------------------------------------------
     \31\ U.S. Commission on Civil Rights, Broken Promises report, p. 
149. (See n. 1 for full reference.)
---------------------------------------------------------------------------
Where Are Some Opportunities To Improve Access to Home Ownership in 
        Indian Country?
    While no quick fixes will radically improve housing conditions in 
Indian Country overnight, plenty of innovations are showing promise for 
a brighter future. This section describes the following recommendations 
from CICD, which are based on our engagement with tribal and community 
leaders over the years:

    Expand the financial capacity of Native community 
        development financial institutions and other tribal 
        institutions;

    Eliminate barriers to expanded use of Federal home 
        ownership programs in Indian Country;

    Simplify housing development on tribal land; and

    Improve the availability of data on Indian Country and 
        Indian Country programs.

Expand the Financial Capacity of Native Community Development Financial 
        Institutions and Other Tribal Institutions
    Native community development financial institutions, or Native 
CDFIs, offer well-tailored and culturally appropriate lending products 
in Indian Country. Encouragingly, the number of Native CDFIs has 
quadrupled in the past two decades, driven by tribal community members' 
and leaders' interest in taking charge of their own financial futures. 
The presence of Native CDFIs in a community is correlated with credit 
score improvements for those communities' hardest-to-serve borrowers. 
\32\
---------------------------------------------------------------------------
     \32\ Michou Kokodoko, Valentina Dimitrova-Grajzl, Peter Grajzl, 
and Joseph Guse, ``Native CDFIs Improve Credit Outcomes for Indian 
Country Residents'', Federal Reserve Bank of Minneapolis, April 28, 
2021.
---------------------------------------------------------------------------
    The potential impact of Native CDFIs is limited by the availability 
of long-term capital, however. In a Minneapolis Fed survey of Native 
CDFIs in 2017, respondents reported that a lack of access to financial 
resources meant there was significant unmet demand for their products 
and services, including for homebuyers. \33\ The limited access to 
secondary markets for mortgages described above constrains the capital 
and liquidity available to Native CDFIs.
---------------------------------------------------------------------------
     \33\ Michou Kokodoko, ``Findings From the 2017 Native CDFI Survey: 
Industry Opportunities and Limitations'', CICD Working Paper 2017-04, 
Federal Reserve Bank of Minneapolis, November 28, 2017, p. 16.
---------------------------------------------------------------------------
    In the spirit of expanding the availability of financial resources, 
depository institutions can consider working with Native CDFIs or other 
tribal institutions to develop pathways to home ownership. In September 
2020, the Board of Governors of the Federal Reserve System unanimously 
voted to approve an Advance Notice of Proposed Rulemaking (ANPR) on the 
Community Reinvestment Act (CRA). \34\ The CRA ANPR explicitly 
addresses a range of capital and credit challenges in Indian Country 
and, in particular, discusses options for encouraging more community 
development activity through mission-oriented financial intermediaries, 
including Native CDFIs.
---------------------------------------------------------------------------
     \34\ Board of Governors of the Federal Reserve System, Community 
Reinvestment Act Proposed Rulemaking web page.
---------------------------------------------------------------------------
    A pilot conducted under the USDA Single Family Housing Direct Home 
Loans program, also known as Section 502, demonstrates the potential 
for leveraging Native CDFIs' strengths, such as deep community 
relationships and a pipeline of potential homebuyers, within existing 
programs. The Section 502 program, while not targeted at Indian 
Country, can support rural home ownership in Indian Country by 
guaranteeing mortgages for borrowers who cannot easily find 
conventional mortgage financing. In one year, two Native CDFIs working 
in partnership with the USDA deployed about $2 million worth of 
mortgage loans across two South Dakota reservations. The pilot deployed 
about 50 percent more loans than had been made on the same reservations 
over the prior decade. \35\
---------------------------------------------------------------------------
     \35\ CICD analysis of data obtained from the South Dakota Native 
Homeownership Coalition.
---------------------------------------------------------------------------
Eliminate Barriers tTo Expanded Use of Federal Home Ownership Programs 
        in Indian Country
    The Federal Government offers multiple Federal home ownership 
programs for Indian Country and rural America, including the Section 
184 and Section 502 programs and the U.S. Department of Veterans 
Affairs' Native American Direct Loan program. However, institutional 
challenges limit the usage of these programs to meet their intended 
purpose of expanding home ownership among Native Americans and in rural 
areas. Eliminating these barriers and expanding the usage of these 
programs, particularly by the traditional lenders that provide the 
majority of mortgages, is crucial to growing home ownership in Indian 
Country.
    Some of these barriers result from lenders' hesitancy to work on 
leasehold mortgages, delays in the TSR process, or insufficient 
technical expertise among lenders to navigate complex Federal programs. 
Other issues cut across programs. For example, tribal housing 
professionals describe a lack of appraisers familiar with best 
practices for valuing properties on tribal lands. Since multiple 
agencies have programs that would be improved by addressing these 
issues, CICD recommends that these agencies work together--ideally, in 
partnership with representatives from the lending community, tribal 
governments, and GSEs--to find solutions and provide guidance for 
housing professionals in Indian Country working across multiple funding 
streams, and leverage resources from mainstream financial institutions.
Simplify Housing Development on Tribal Land
    Helping tribes regain stewardship of their lands is critical to 
continued housing development. The Helping Expedite and Advance 
Responsible Tribal Home Ownership (HEARTH) Act of 2012 created a 
process for tribes to assume additional control of trust land 
management. Tribes across the United States have used the HEARTH Act to 
set up their own processes for furthering development on trust lands. 
Our Tribal Leaders Handbook on Homeownership details case studies of 
how the HEARTH Act can make a big difference for tribes. \36\
---------------------------------------------------------------------------
     \36\ See n. 17.
---------------------------------------------------------------------------
    For tribes with relatively few financial resources, however, the 
HEARTH Act has more limited benefits. Sufficient funding is not 
available through the HEARTH Act itself to fund the administrative 
capacity necessary for taking over trust-land management from the BIA, 
and the cost is simply too high for many tribes. The BIA's website 
lists only 56 tribes as of 2020 that have received approval for at 
least one aspect of tribal leasing regulations; about a third of these 
approvals apply to transactions for residential developments. \37\
---------------------------------------------------------------------------
     \37\ BIA, U.S. Department of the Interior, HEARTH Act of 2012.
---------------------------------------------------------------------------
    Improving the BIA's TSR process for tribes that are not able to 
access the HEARTH Act's opportunities would simplify the process of 
development on trust lands. For example, TSRs must be certified as up-
to-date before development can take place, but parties looking to build 
on trust land or simply transfer ownership cannot currently turn to a 
website to file or track important TSR-related documents or requests. 
Significant steps in the process still rely on in-person interactions 
and must be carried out using paper. With better collection and 
reporting of data, and other practical improvements, Federal policy and 
practice could change to reduce TSR-related delays. In 2020, CICD 
produced specific recommendations on options to shorten the TSR process 
to improve home ownership. \38\
---------------------------------------------------------------------------
     \38\ James Robert Colombe, ``Shortening the TSR Timeline: A 
Proposal To End Delays That Hinder Native Homeownership'', Federal 
Reserve Bank of Minneapolis, September 9, 2020.
---------------------------------------------------------------------------
    Better interagency coordination and a focused effort to simplify 
requirements for projects in Indian Country that use multiple funding 
streams could increase the impact of Federal dollars intended to 
support housing construction and development. Further work could build 
on the legacy of attempts like the One Stop Mortgage Initiative and 
legislation like NAHASDA to support tribal sovereignty and streamline 
complexities.
Improve the Availability of Data on Indian Country and Indian Country 
        Programs
    Because better data lead to better policy decisions, there is a 
clear need for an improved knowledge infrastructure when it comes to 
Indian Country. Data on programs that serve Native Americans are 
difficult to find in publicly available venues. For example, both 
policymakers and prospective homeowners lack data on the timeliness of 
the TRS process. On a positive note, recent legislation will require 
HUD to report its progress on accelerating lender applications under 
section 184. More readily available data on USDA's Section 502 loan 
program and the U.S. Department of Veterans Affairs Native American 
Direct Loan would also facilitate more efficient use and procedural 
improvements to those programs.
    More generally, data on Indian Country and Native Americans are 
often insufficient to assess effects of programs and policies or even 
to track changes in population-level well-being. With sample sizes too 
small to facilitate accurate estimates, American Indians and Alaska 
Natives are too often ``asterisked'' or grouped in an ``other'' 
category in published reports. To address this, CICD will soon release 
a regularly updated dashboard of labor market conditions for American 
Indians and Alaska Natives throughout the country.
    Illuminating economic conditions in Indian Country will require a 
large shared effort, and in some cases significant commitments of 
financial resources to obtain sufficient statistical samples. This 
would have the welcome effect of helping community members, 
researchers, tribal leaders, and Federal policymakers track and assess 
the impact of public policy and other interventions.
Conclusion
    Underinvestment in critical infrastructure, restricted access to 
credit, and an inadequate housing supply hinder Native Americans from 
the intergenerational wealth-building that home ownership makes 
possible in the United States, and even from the basic benefits of 
stable, adequate housing.
    Recent history shows that Indian Country is beginning to write a 
new chapter based on increased support for tribal sovereignty and 
economic growth. The financial gaps between Native Americans and the 
rest of the U.S. population remain large, but the expanding capacity 
among tribal governments, Native-led financial institutions, and 
community-based nonprofits shows that the potential for growth is 
immense. With stronger and easier-to-navigate Federal policy, housing, 
and economic development in Indian Country will not only continue but 
accelerate.
                                 ______
                                 
                   PREPARED STATEMENT OF MICHAEL GOZE
    Chief Executive Officer, American Indian Community Development 
    Corporation (AICDC), Minneapolis, Minnesota; Chairman, Board of 
   Commissioners, Ho-Chunk Housing and Community Development Agency 
  (HHCDA), Tomah, Wisconsin; and Member, Ho-Chunk Nation of Wisconsin
                              May 27, 2021
    Good Morning, I am Michael A. Goze a member off the Ho-Chunk Nation 
of Wisconsin. I live in Minneapolis, MN. I am the CEO of the American 
Indian Community Development Corporation. I also serve as the 
Chairperson for the Ho-Chunk Housing and Community Development Agency 
located in Tomah, WI. Being involved with both the Twin Cities Metro 
Urban area and the Ho-Chunk Nations low income housing options my 
perspectives are meant address concerns of both rural and urban 
American Indian Communities.
    It is my honor to provide testimony to this Committee this morning. 
In looking at the current situation regarding safe, standard, and 
affordable housing on Tribal Trust land or within the rural and Urban 
settings throughout our Country. American Indians fall far short of the 
national average in the percent of home ownership when compared to 
their white counterparts. There are several reasons for this disparity.
    First, access to mortgage products that meet the specific needs of 
the American Indian population. The section 184 Indian Home Loan 
Guarantee Program is a home mortgage product specifically designed for 
American Indian and Alaska native Families, Alaska villages, Tribes, or 
Tribally designated housing entities. Congress established this program 
in 1992 to facilitate home ownership and increase access to capital in 
Native American Communities. Although this mortgage product has had 
some impact it has not equaled the playing field. The number of lending 
institutions that offer the Section 184 loan product are limited to a 
select few. I would suggest that the Section 184 or a like loan product 
would be better served if it was provided through the American Indian 
Community Development Financial Institutions (CDFI's) that are a great 
asset to Indian Country both on Reservations and in the Urban Areas. 
The CDFI's provide a myriad of services all dedicated to the financial 
success of its clients.
    The work of a CDFI in home ownership is providing Homebuyer 
education, Homebuyer counseling, Credit repair, Budgeting, 
responsibilities of Homeownership and other aspects of this sometimes 
daunting process. A large number of American Indian clients seeking 
home ownership are first time homeowners looking to provide family 
stability enhancing Community stabilization making these services 
important to their individual success. I believe that this relationship 
would of benefit through the mortgage process. Currently their clients 
make applications for mortgages with other lending institutions 
sometimes these are online applications this can be a totally different 
experience that have had in the past. To provide an opportunity for 
American Indian CDFI's to have a mortgage product like the section 184 
will complete the process and provide a higher level of success. 
American Indian CDFI's given the opportunity could provide a better 
level of service and gain the knowledge and financial benefits of the 
mortgage process. Making this a win-win for both the client and the 
CDFI.
    Second, affordability. Income levels within the American Indian 
communities have a substantial effect on the amount a home loan 
available to them. With todays housing prices the availability of homes 
are scarce in the lower prices ranges. Having a forgivable deferred 
loan product that will be reduced over time would be a great investment 
into the stabilization of American Indian Families and Communities. An 
example would be a reduction in the principle at 5 years, 10 years and 
would be forgiven totally at 15 years. Data supports that home 
ownership is crucial in the stabilization of families. Having a safe, 
standard, and affordable home creates the foundation that promotes 
better outcomes in areas of education, health, and financial stability. 
Our homes can be the single greatest financial asset in one's life, 
making way for families to continue to thrive vs. just survive in our 
current economic climate. By investing into our American Indian 
families via home ownership we can create an immediate impact into the 
lives of our youth, adults, and elders. This type of investment creates 
immediate impact and also provides long term impact in the 
stabilization of Families and Communities.
    Thirdly, Land Trust model. Providing capital for an American Indian 
Land Trust would be another tool in making home ownership achievable to 
many more potential home owners. It also would provide the American 
Indian communities to reclaiming land that was once part of Indian 
Country. In Minneapolis we have had much success in using the Land 
Trust model to reduce the mortgage loan amount by having the land owned 
through a Land Trust. This provides the ability to increase the buying 
power of the homeowner by having the land held outside of the mortgage. 
It provides a monthly benefit to the homeowner is a reduced monthly 
payment. In a Land Trust model, the appreciation is shared by a 
predetermined amount should the property be sold. The Land Trust model 
can also be beneficial in continued housing affordability for the 
Community by the reinvestment of appreciation by the Land Trust.
    Lastly, In today's times we need to use every financial opportunity 
to help American Indian families understand and relish in the benefits 
of home ownership. We need to use a number of new initiatives to make 
home ownership possible. We at AICDC have used several City, County, 
and State funding options including grants, deferred loans and other 
home ownership incentives. We have benefited for the Federal Home Loan 
Bank of Des Monies Native American Homeownership Initiative (NAHI) in 
providing downpayment assistance. We look to our Federal partners to 
help in providing opportunities to increase Homeownership to the 
American Indian Families throughout the Urban and Tribal lands of our 
great Country.
    I thank you for your attention to this matter.
                                 ______
                                 
                  PREPARED STATEMENT OF ERIC SHEPHERD
  Executive Director, Sisseton-Wahpeton Housing Authority, Sisseton, 
           South Dakota; and Member, Sisseton Wahpeton Oyate
                              May 27, 2021
    I'd like to thank Chairman Brown, Vice-Chairman Toomey, Senator 
Rounds, and the other Members of the Subcommittee for this opportunity 
to talk about Indian housing today. It has been an especially hard and 
challenging 15 months for those of us on the Sisseton-Wapheton 
Reservation in South Dakota. We were hit early and hard with the COVID 
pandemic at home and we are still working on recovery. Housing has been 
at the forefront of the recovery efforts, providing a safe place for 
our members to shelter and recover and managing the many new relief 
programs that you in Congress have provided to us.
    A large part of our recovery effort at Sisseton-Wapheton involves 
looking past the pandemic and into the long-term status of Indian 
housing programs, both on our Reservation and the United States as a 
whole. The perennially inadequate funding and other program issues that 
existed prior to 2020 must now be addressed to assure the long-term 
sustainability of Indian housing for the first Americans. To put it 
more plainly, we all must understand something is wrong when the base 
level appropriation for the Native American Housing Assistance and 
Self-Determination Act (NAHASDA) has not been increased since the law 
was originally passed 25 years ago. As Congress and the new Biden 
administration focuses on helping American rebuild its dilapidated 
infrastructure and recalibrate is housing assistance programs, Indian 
Country and Indian housing must also be given fair consideration.
    I know the Subcommittee has a particular interest in the HUD 
Section 184 program operating in Indian Country. I can tell you that 
the 184 program has had limited impact on reservation lands held in 
trust by the United States--while a few individuals have been able to 
secure leasehold mortgages under the program, most of the funds go to 
off-reservation lands and urban areas where banks and lenders are more 
comfortable with providing traditional mortgages. The situation has not 
been helped with HUD's recent revision or the program regulations that 
send the program back in time before the 184 Act was passed in 1992--
requiring underwriting provisions and fees that are not affordable or 
helpful to developing new housing on reservation lands.
    I would like to call the Subcommittee's attention to a number of 
other important issues that Congress should address regarding Indian 
housing programs:

    1. We Appreciate the Emergency Funds Received to Date and Need To 
Receive a Fair Share of the New Housing Infrastucture Funds as Well: 
The CARES Act, the Consolidated Appropriations Act of 2021, and the 
American Rescue Plan, have all included much needed emergency funds to 
support Indian Housing operations during the pandemic. We do appreciate 
that Congress has allocated money to alleviate the short-term effects 
of the COVID-19 pandemic. We can confirm that this money had an 
immediate and vital impact on preserving and protecting housing 
services and resources in our tribal communities. Our proposal is to 
now address the more long-term and sustainable solutions to improving 
Indian housing. The recently proposed American Jobs Plan includes $231 
billion to improve and produce more housing and housing 
infrastructure--including a proposed amount of at least $50 billion to 
renovate and rehabilitate federally assisted housing. We are asking you 
to help insure that, if new infrastructure legislation is passed, 
Indian housing continue to get its fair share of the funding (e.g., a 
5-percent set-aside for Indian housing would be $2.5 billion). As you 
are aware, Federal programs have long-neglected Indian Country's need 
to maintain and improve its aging housing stock.
    Housing needs in tribal areas remain the most severe in the nation 
and resources to address the problem have declined more rapidly than 
for other Federal housing programs. Katherine M. O'Regan, Assistant 
Secretary for PD&R, HUD, Report in the Forward (see below).
    Tens of thousands of new units are needed. Thousands of existing 
units, some which are currently boarded up because of lack of funding 
and severe methamphetamine contamination, are also in need of 
substantial rehabilitation. The simple fact is that $2,500,000,000 
(two-billion five-hundred million dollars) of additional new funding is 
needed if these conditions are going to be effectively addressed. 
Tribes and their TDHEs have the capacity to build and rehabilitate 
their housing. Most observers know and most studies show, including the 
recent ``Housing Needs of American Indians and Alaska Natives in Tribal 
Areas: A Report From the Assessment of Americans Indian, Alaska Native, 
and Native Hawaiian Housing Needs'', by HUD PD&R and the Urban 
Institute, January 2017 (the Report), \1\ that TDHEs have, or if needed 
can quickly reacquire, the capacity to build housing and other related 
infrastructure construction on this scale. TDHEs are prepared to 
quickly gear up to produce a substantial number of new units. This will 
help tribes and Alaska villages generate for their communities and the 
country post-pandemic economic recovery--just as they did successfully 
10 years ago after the Great Recession with American Recovery and 
Reinvestment Act (ARRA) moneys.
---------------------------------------------------------------------------
     \1\ The Study and final Reports are available for download at: 
https://www.huduser.gov/portal/native-american-assessment/home.html.
---------------------------------------------------------------------------
    Tribes have demonstrated the capacity to construct and rehabilitate 
housing for low income families at substantial levels under the NAHASDA 
framework. Their ability to effectively use an unexpected injection of 
funding under the American Recovery and Reinvestment Act (ARRA) of 2009 
toward these ends in a very limited time period is particularly strong 
evidence supporting this conclusion. Page 10, Executive Summary of the 
Report.
    It is our recommendation and opinion that these new funds should be 
evenly divided between HUD's Indian Housing Block Grants (IHBG) and 
IHBG Competitive Grants. Using the existing IHBG program to deliver 
some of this money would allow some of the grants to be allocated using 
the NAHASDA allocation formula. By this method, half of the money would 
be divided up among all the tribal and Alaska Native TDHEs. Then using 
IHBG Competitive Grants, HUD can award the other half of the funds to 
the those TDHEs that have the greatest need, but who also have the 
capacity required to quickly and effectively deliver this badly needed 
housing and to contribute to economic resurgence. This is exactly how 
TDHEs were successful when called upon a decade ago to use ARRA moneys.
    2. Reauthorization and Expansion of Drug Elimination Program (42 
U.S.C. 11908)--This HUD program was highly successful in assisting 
tribes with funds to prevent and mitigate criminal and drug activity in 
their communities, but it has not been reauthorized since 2003 and 
monies have not been appropriated since 1999. With the renewed problems 
of methamphetamines and other drugs requiring tribally designated 
housing entities to expend large portions of their NAHASDA housing 
funds to clean-up meth and drug contaminated homes, we believe that the 
program should be reauthorized, new funds be appropriated, and eligible 
uses of funds expanded to include methamphetamine and toxic drug clean 
up.
    3. Reauthorization of Nahasda--We also want to recommend, if the 
opportunity arises, that NAHASDA be reauthorized. Such formal 
reauthorization is long overdue (NAHASDA has not be reauthorized since 
2008). And if this should happen, we continue to join with most other 
tribes, TDHEs and national and regional native housing associations to 
advocate that the reauthorization modify the existing NAHASDA 30 
percent rental payment rule.
    If the Country fails now to address the plight of Indian housing, 
it would be disastrous to tribes and Alaska Native communities, and to 
those hundreds of thousands of Native people and families who suffer so 
greatly with overcrowded and severely substandard housing. Most tribal 
and Alaska Native people that today live in Indian areas, their 
governments and their TDHEs, have no other option but to look to the 
Federal Government for the housing funds that they so badly need. For 
the United States to continue, at this particular moment in history, to 
ignore these tribal needs would be nothing short of a tragedy and sadly 
yet another abandonment by the United States of longstanding concerns 
and obligations to tribal sovereigns, Indian people, and Alaska 
Natives.
    Thank you again for the opportunity to submit this testimony. I 
would be glad to answer any questions the Subcommittee might have.
               RESPONSES TO WRITTEN QUESTIONS OF
           SENATOR CORTEZ MASTO FROM DANTE DESIDERIO

Q.1. In our discussion, you noted that the Federal Home Loan 
Banks have played a very limited role in investing with tribes. 
Do you have additional information on why tribes lack access to 
FHLBank investments and advances (loans)? Is it due to a lack 
of a local partner: a bank, a credit union, a housing finance 
agency, a Community Development Financial Institution? A lack 
of familiarity with the FHLBank system by the tribes? Or that 
the FHLBanks have not sought to serve tribes?
    How can we make FHLBank resources and investments more 
accessible to tribes seeking housing, community development, 
and infrastructure investments?

A.1. Response not received in time for publication.

Q.2. The report, ``The Higher Price of Mortgage Financing for 
Native Americans'', notes that as of 2012, nearly 30 percent of 
all mortgage loans given on reservation tracts were higher 
cost. This is three times the proportion of loans that are 
higher-priced than for any other racial or ethnic group in 
reservation tracts or tracts nearby.
    Fannie Mae and Freddie Mac have a duty-to-serve 
manufactured homebuyers and rural communities. How are Fannie 
Mae and Freddie Mac supporting affordable financing for Native 
American communities?

A.2. Response not received in time for publication.

Q.3. Can you elaborate on the role of the Indian CDBG program 
to your tribes and its impact on affordable housing and 
community development?

A.3. Response not received in time for publication.

Q.4. Can you discuss the impact of the additional ICDBG funds 
allocated through the CARES Act? What was the impact of those 
funds on your tribes?

A.4. Response not received in time for publication.
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
            SENATOR CORTEZ MASTO FROM ADRIAN STEVENS

Q.1. How have the Federal Home Loan Banks worked with the 
National American Indian Housing Council and your members?

A.1. The Federal Home Loan Banks have been a supporting partner 
directly to NAIHC for a number of years. Additionally, FHLB has 
been a regular presence at NAIHC hosted annual events, with 
both information booths and staff present to meet and learn 
from tribal housing professionals. The different branches of 
FHLB have provided varying levels of participation in a manner 
largely consistent with the levels of Native American tribes or 
communities within each branch's footprint.

Q.2. Nearly all Federal Home Loan Bank investments require a 
local partner--a bank, a credit union, a housing finance 
agency, a Community Development Financial Institution. How 
accessible are those partners for tribes who seek housing, 
community development and infrastructure investments?

A.2. Tribal communities have consistently been underbanked and 
underserved communities for decades. Many tribal communities 
still do not have a bank physically located in its area, which 
makes it difficult for many tribal members to access banking 
services in a manner many Americans take for granted. Over the 
past 20 years or so, Native CDFIs have begun to fill that gap, 
providing much needed services in these communities. FHLB has 
conducted some work with Native CDFIs but that outreach and 
subsequent investment in Native CDFIs can be improved, by both 
FHLB and other commercial and governmental banking 
institutions.

Q.3. The report, ``The Higher Price of Mortgage Financing for 
Native Americans'', notes that as of 2012, nearly 30 percent of 
all mortgage loans given on reservation tracts were higher 
cost. This is three times the proportion of loans that are 
higher-priced than for any other racial or ethnic group in 
reservation tracts or tracts nearby.

A.3. Fannie Mae and Freddie Mac have a duty-to-serve 
manufactured homebuyers and rural communities. How are Fannie 
Mae and Freddie Mac supporting affordable financing for Native 
American communities?
    Fannie Mae and Freddie Mac have been including more tribal 
organizations and professionals in their outreach and 
consultation efforts. These efforts improve both Fannie and 
Freddie's understanding of obstacles, needs and opportunities 
in Indian Country, and also improves the awareness of Fannie 
and Freddie services among our tribal housing professionals. In 
addition to understanding what mortgage and lending products 
Fannie and Freddie can provide directly to tribal communities, 
Fannie and Freddie have also been working to better understand 
how to invest in existing Native CDFIs and other banking 
institutions active in tribal communities, including accepting 
various Federal loan guarantee products through the secondary 
market.
    Like many commercial and Government sector initiatives 
aiming to improve services to underserved communities, NAIHC 
would urge these organizations (and Congress where appropriate) 
to consider services to tribal communities specifically as 
tribes are often one of the last ``underserved'' markets to be 
affected by these initiatives when the various underserved 
demographics are targeted all together.

Q.4. The Center for Indian Country Development's report, ``The 
Higher Price of Mortgage Financing for Native Americans'', 
finds that about 31 percent of Native Americans who bought 
homes on reservation land during the study's timeframe bought a 
manufactured home. The report finds that manufactured home 
loans are much more likely to be high-cost loans. An article in 
the Seattle Times in 2015 reported that a Clayton Homes sales 
person told a Navajo woman, shopping for a manufactured home, 
that Vanderbilt was the only lender that finances on her 
reservation. That was untrue.

A.4. That article was part of a series of articles on predatory 
manufactured housing financing in the Seattle Times from 2015 
and 2016. They found that Native Americans were targeted by 
steering practices by manufactured home sales people before the 
Consumer Financial Protection Bureau banned the practice.
    Unfortunately, in 2018, Congress reversed the prohibition 
on steering and permitted manufactured home salespeople to 
recommend lenders affiliated with the manufactured home 
manufacturers.
    Have you seen a return of steering to affiliated--and high-
cost lenders--when people buy a manufactured home? What loan 
products are available to homeowners seeking to purchase a 
manufactured home on tribal lands?
    While I am not aware of any specific instances of predatory 
steering to high-cost lenders, the overall lack of lending or 
mortgage options across Indian Country would make the practice 
fairly easy to carry out. Many Native American customers are 
likely unaware of other loan options that may be available to 
them. The marketing of existing, competitive loan products is 
fairly scarce in Indian Country as sparsely populated rural 
areas do not often provide many lenders with a good return on 
their marketing investment.
                                ------                                


         RESPONSES TO WRITTEN QUESTIONS OF CHAIR SMITH
                     FROM ALENE TCHOURUMOFF

Q.1. How can Congress support positive emerging trends in 
housing in Indian Country?

A.1. The Native American Housing Assistance and Self 
Determination Act of 1996 (NAHASDA) represented an important 
turning point in the Federal Government's approach to housing 
in Indian Country.
    NAHASDA empowered tribal governments and other Native 
leaders to pursue their own visions for housing in their 
communities. Today, two conditions present opportunities for 
Congress to build on the capacity for ambitious housing, 
community, and economic development among tribal nations and 
their partners.
    First, Native community development financial institutions 
(CDFIs) are a relatively recent and promising innovation whose 
impact can grow further still. Lack of capital access in Indian 
Country comprises barriers not just for the success of 
potential homeowners or housing developers, but also for 
entrepreneurs and households. While Native CDFIs' work cannot 
single-handedly rectify this problem, research from the Federal 
Reserve Bank of Minneapolis demonstrates Native CDFIs' efficacy 
and suggests that many Native CDFIs would be in a position to 
quickly meet even more credit needs if they had additional 
capital.
    Second, funding for COVID-19 relief has brought large 
amounts of resources to Indian Country. Policy changes could 
reduce delays or other hindrances caused by the longstanding 
barriers to development that are described below. Funding 
parameters could also support innovative practices that reflect 
the unique needs of tribal communities. For many Native 
nations, a more robust economic future is delayed by a lack of 
access to capital and funding opportunities.

Increase the Capacity of Native CDFIs

    Congress can support access to credit by bolstering 
resources for the formation and success of Native CDFIs. Credit 
is foundational to home ownership and housing stability. Our 
research suggests Native CDFIs improve access to credit for 
people in Indian Country. \1\ The number of Native CDFIs 
quadrupled over the past 20 years, from 16 in 2001 to more than 
70 in 2021. \2\
---------------------------------------------------------------------------
     \1\ Kokodoko, Michou, and Peter Grajzl, Valentina Dimitrova-
Grajzl, and Joseph Gruse. ``Native CDFIs Improve Credit Outcomes for 
Indian Country Residents''. Federal Reserve Bank of Minneapolis, April 
2021.
     \2\ Ibid.
---------------------------------------------------------------------------
    In some cases, support for Native CDFIs could mean 
providing better access to resources that already exist. For 
example, the U.S. Department of Agriculture (USDA) Section 502 
program offers home loans to low- and very low-income rural 
borrowers. While there are many potential 502 borrowers in 
Indian Country, the program has had difficulty reaching tribal 
borrowers, especially on trust land.
    A recent pilot had the USDA partner with Native CDFIs in 
South Dakota to increase Section 502 lending on two 
reservations. In a single year, the partnership led to 50 
percent more Section 502-guaranteed loans on those reservations 
than had been made in the previous decade. That pilot 
demonstrated Native CDFIs' potential for increasing home 
ownership if Federal agencies work with them as intermediaries.
    Our survey research suggests that Native CDFIs can deploy 
more resources to Indian Country residents via their existing 
lines of business. Surveyed Native CDFIs reported more demand 
for their services than their current financial capacity could 
meet. \3\
---------------------------------------------------------------------------
     \3\ Kokodoko, Michou. ``Findings From the 2017 Native CDFI Survey: 
Industry Opportunities and Limitations''. Federal Reserve Bank of 
Minneapolis, November 2017.
---------------------------------------------------------------------------
    Another indication of the robust demand for Native CDFIs' 
services comes from the Oweesta Corporation, an intermediary 
for about 30 of the Nation's Native CDFIs. Oweesta's member 
Native CDFIs reported $19,483,123 in housing loans in 2020. 
Around $13 million was for home purchases, $2 million for 
construction, and $4 million for home repair. Several of the 
Oweesta-member Native CDFIs have begun offering new home loan 
products in response to an increase in demand.
    Increased resources for Native CDFIs could provide more 
Native families with a path to home ownership. But even with 
more dollars at their disposal, Native CDFIs will not be able 
to fill the role in Indian Country that thousands of lenders 
play for the broader United States. For larger-scale progress 
to be made, Native CDFIs' best practices and knowledge could be 
paired with the resources of the conventional lenders in the 
U.S. mortgage market.
    Some Center for Indian Country Development (CICD) contacts 
specifically cite barriers in accessing secondary markets as an 
important constraint on the ability of conventional lenders and 
Native CDFIs to invest in housing in Indian Country. Congress 
could create an expectation for Fannie Mae and Freddie Mac, or 
other Federal actors like the Federal Home Loan Banks, to 
develop better processes for incorporating Indian Country into 
the secondary market.
    Providing direction or setting targets could accelerate 
avenues that are currently opening up to increased Indian 
Country mortgage activity. For example, new approaches could be 
developed via the ``duty-to-serve'' processes of Fannie Mae and 
Freddie Mac. Duty-to-serve requires these two Government-
sponsored enterprises, or GSEs, to develop plans to improve the 
flow of mortgage investments to certain underserved markets.
    Currently, Fannie Mae's process requires a memorandum of 
understanding to be approved by each participating tribal 
government. Tribal laws must meet Fannie Mae's requirements for 
protecting borrowers and lenders. Four tribes have signed 
agreements with Fannie Mae to bring that GSE's mortgage 
products to their respective nations.
    While Fannie Mae offers model tribal lending procedures, 
pursuing MOUs on a tribe-by-tribe basis will likely take many 
years to achieve scale. Additional resources for outreach or 
technical assistance could increase the number of tribes 
pursuing such agreements--and the number of lenders interested 
in working with them.
    As secondary markets open to Indian Country, Native CDFIs 
could serve important roles as both lenders and intermediaries. 
Conventional lenders interested in doing more business in 
Indian Country could benefit from engaging with Native CDFIs 
and understanding the best practices Native CDFIs have 
developed for serving markets within Native nations.

Streamline Access to Relief Funding

    Historic amounts of Federal money are supporting local 
governments' pandemic recovery efforts. However, because of the 
longstanding housing needs in Indian Country, this targeted 
Federal funding should be a floor and not a ceiling. That is, 
tribal governments, housing developers, nonprofits, Native 
CDFIs, and other institutions with bold and high-impact ideas 
in Indian Country should not be barred from accessing Federal 
funding streams to support those ideas if they cannot be 
pursued with Indian Country-specific dollars alone.
    As it stands, nontargeted housing-related funds are often 
unavailable to tribes. Tribes are statutorily restricted from 
accessing some housing dollars, even though State-level 
allocations may be calculated, in part, based on the Indian 
Country population in a State. For example, tribes typically 
cannot directly receive Community Development Block Grants or 
housing choice vouchers. \4\
---------------------------------------------------------------------------
     \4\ Jones, Katie. ``The Native American Housing Assistance and 
Self-Determination Act of 1996 (NAHASDA): Background and Funding''. 
Congressional Research Service, November 2015. P. 2.
---------------------------------------------------------------------------
    These changes were a part of NAHASDA. That legislation 
aimed to support tribal sovereignty, in part by creating 
programs targeted to Indian Country, like the Indian Housing 
Block Grant (IHBG). While tribes do benefit from Federal 
resources via NAHASDA that are specifically designated for 
Native nations, these resources are too often an inadequate 
substitute for access to the broader set of Federal supports.
    The inflation-adjusted value of IHBG's funding has 
decreased over time and, even if it had kept pace with 
inflation, would not be able to fully address housing needs in 
Indian Country. \5\ Furthermore, some of the dollars 
distributed through tribal-specific programs are distributed on 
a competitive basis and may be inaccessible to tribes with more 
limited capacity for application processes.
---------------------------------------------------------------------------
     \5\ Tchourumoff, Alene. ``Housing for Native Americans: Review of 
Federal Programs, Barriers, and Opportunities''. Written testimony 
provided for United States Senate Subcommittee on Housing, 
Transportation, and Community Development of the United States Senate 
Committee on Banking, Housing, and Urban Affairs, May 2021. P. 5.
---------------------------------------------------------------------------
    Beyond considering tribes' eligibility for Federal dollars, 
the Federal Government should continue to examine and address 
barriers to efficiency that tribes and their partners encounter 
when they try to leverage dollars from multiple sources in 
support of housing projects. Environmental reviews are often 
cited as one particular area where a lack of coordination 
across Federal programs can add cost and delays to Indian 
Country projects. \6\
---------------------------------------------------------------------------
     \6\ ``Native American Housing: Additional Actions Needed To Better 
Support Tribal Efforts''. U.S. Government Accountability Office, March 
2014. P. 16.
---------------------------------------------------------------------------
    In 2015, the U.S. Department of Housing and Urban 
Development (HUD) convened a working group to address the 
environmental-review issue. The issue is still cited as a 
problem by some tribal leaders in the CICD network. \7\ 
Development in Indian Country could be facilitated by more 
streamlined procedures, like a central application tribal 
stakeholders could complete for multiple housing programs at 
once while uploading program-specific requirements as 
necessary.
---------------------------------------------------------------------------
     \7\ Nancy G. Pindus, 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''. HUD, Office of Policy Development and Research, 
January 2017 (hereafter HUD Tribal Area Study). Pp. 130-132.
---------------------------------------------------------------------------
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
          SENATOR CORTEZ MASTO FROM ALENE TCHOURUMOFF

Q.1. Can you give us a sense of the costs we should consider 
when providing financing for new housing production on tribal 
lands?

A.1. Native nations' history, geography, and access to credit 
can raise costs for developers working in Indian Country. Some 
of these costs are unavoidable--there are no short-term 
workarounds for Indian Country's long-underdeveloped 
infrastructure, for example. Others, like titling issues, may 
be addressed through policy reforms that are discussed 
elsewhere in this document.

Infrastructure

    Infrastructure like water systems, sewage treatment 
facilities, electricity, and roads was one the most-cited 
response by tribal leaders surveyed in 2017 about barriers to 
Indian Country development. \1\ As of 2015, the unmet need in 
Indian Country for safe drinking water and adequate wastewater 
treatment alone amounted to about $3 billion. \2\
---------------------------------------------------------------------------
     \1\ HUD Tribal Area Study. P. 127.
     \2\ ``Broken Promises: Continuing Federal Funding Shortfall for 
Native Americans'', Briefing Report, U.S. Commission on Civil Rights, 
December 2018. P. 86.
---------------------------------------------------------------------------
    This means housing projects in Indian Country may be at a 
disadvantage on a cost-per-unit basis relative to other 
projects aimed at supporting low-income housing. Additionally, 
the time required to build out necessary infrastructure to 
accommodate housing developments in Indian Country may further 
delay the realization of home ownership for tribal families. 
Policies aimed at incentivizing Indian Country investment must 
reflect this reality. Otherwise, competitive or formula-based 
funding may actually disadvantage projects on tribal land.

Title and Appraisals

    Costs related to the titling process are well-documented. 
My written testimony contains a few ideas for improving the 
titling process, including more support for tribes interested 
in pursuing the approach enabled by the Helping Expedite and 
Advance Responsible Tribal Homeownership Act. \3\
---------------------------------------------------------------------------
     \3\ Tchourumoff, Alene. ``Housing for Native Americans: Review of 
Federal Programs, Barriers, and Opportunities''. P. 9.
---------------------------------------------------------------------------
    The titling process and appraisal situation can extend the 
timeline for completion of Indian Country projects in ways that 
disadvantage them. The Bureau of Indian Affairs (BIA) title 
status report (TSR) process is frequently cited as a hurdle for 
loans in Indian Country. A 30-day timeline for BIA title 
processing is a reasonable goal and could ease lending in 
Indian Country.
    Steps have been taken to improve the TSR process, but data 
are not available to gauge any progress. Anecdotal evidence 
suggests there is variation across BIA offices, and that the 
process can sometimes take more than 6 months. \4\
---------------------------------------------------------------------------
     \4\ Colombe, James. ``Shortening the TSR Timeline: A Proposal To 
End Delays That Hinder Native Homeownership''. Federal Reserve Bank of 
Minneapolis, September 2020.
---------------------------------------------------------------------------
    In addition to titling, we often hear about delays or extra 
costs incurred due to the appraisal process. Real estate 
markets in rural areas typically feature fewer transactions 
than in metro areas. Thus, the appraisal methods that work in 
more densely populated areas can be less effective. Things 
become even more complicated when adding in the infrastructure 
and unique land-ownership structure in Indian Country.
    Cost-based appraisals, which focus on the value of 
improvements on a piece of property, are a viable alternative. 
Some organizations are already attempting to popularize this 
type of appraisal, \5\ which can circumvent some of the most 
common barriers to more-prevalent appraisal techniques' 
application in Indian Country. Appraisers are usually empowered 
to choose the cost-based-appraisal method. But we often hear 
that appraisers are untrained in or unwilling to apply the 
technique.
---------------------------------------------------------------------------
     \5\ See, for example, Fannie Mae's ``Appraising Properties on 
Tribal Lands''.
---------------------------------------------------------------------------

Access to Credit

    Credit is generally harder to come by and more expensive in 
Indian Country. CICD research shows that consumers looking for 
a mortgage pay higher prices on reservations. \6\ Testimony 
from Indian Country leaders indicates that credit is also often 
more expensive for tribal governments, developers, and small 
businesses. Evidence from loan guarantee programs like HUD's 
Section 184 suggest that the higher-interest costs are not 
entirely based on objective measures of risk and may be 
influenced by lenders' misperceptions of risk in Indian Country 
investments.
---------------------------------------------------------------------------
     \6\ Feir, Donna, and Laura Cattaneo. ``The Higher Price of 
Mortgage Financing for Native Americans''. Federal Reserve Bank of 
Minneapolis, September 2019. P. 1.
---------------------------------------------------------------------------
    The increased cost of credit impacts borrowers at an 
individual level, as they pay money in interest that could be 
spent elsewhere. Evidence suggests that the Native-White wealth 
gap in the United States is high, and that the home ownership 
gap contributes to this disparity. \7\ At an institutional 
level, Indian Country's ability to leverage Federal and other 
resources is limited, because the costs of debt service in 
Indian Country are higher. Higher-cost, harder-to-find credit 
can harm privately financed projects, and also means the reach 
and efficiency of Federal programs that rely on public-private 
collaborations may be limited. \8\
---------------------------------------------------------------------------
     \7\ Ibid. P. 6.
     \8\ See, for example, Freddie Mac's examination of Low Income 
Housing Tax Credit (LIHTC) usage in Indian Country. Freddie Mac, the 
largest funder of affordable housing in the United States, did not 
finance a LIHTC investment in Indian Country until 2019, 35 years into 
the program's existence.

Q.2. What policy recommendations for the manufactured-home 
market should we consider to lower the cost of mortgages for 
home buyers, especially Native Americans, purchasing a 
---------------------------------------------------------------------------
manufactured home?

A.2. Manufactured housing is one of the largest sources of so-
called ``naturally occurring affordable housing.'' \9\ Advances 
in manufacturing and transportation make the sector well-
positioned to play a part in the future housing market. Even 
accounting for the costs of transporting and installing a 
foundation, a typical manufactured home can offer significant 
price advantages over site-built homes. \10\
---------------------------------------------------------------------------
     \9\ ``Factory-Built Housing for Affordability, Efficiency, and 
Resilience''. Evidence Matters, HUD, Winter/Spring 2020. Accessed July 
13, 2021.
     \10\ ``Manufactured Homes: An Affordable Housing Option''. Tribal 
Leaders Handbook on Homeownership, Chapter 11, Federal Reserve Bank of 
Minneapolis, 2018.
---------------------------------------------------------------------------
    However, higher interest rates for manufactured-home 
owners' mortgages eat away at these savings. And other 
procedural barriers and possible market imperfections can make 
the purchase of a manufactured home unnecessarily difficult.
    Like many people in rural areas, would-be purchasers of 
manufactured housing face a number of challenges in obtaining 
financing. Standard appraisals can be an issue, due to a lack 
of volume of comparable sales, and many lenders fail to invest 
significant resources in pursuing business in smaller markets 
for smaller-dollar loans. Manufactured-home buyers seeking 
loans face some outdated perceptions about the quality of 
manufactured housing itself, and often need to pursue chattel 
loans as opposed to standard mortgages. Lenders and State 
housing finance agencies report difficulties in or are unaware 
of options for selling manufactured home loans to a secondary 
market--when such options even exist.
    Evidence suggests that some of the barriers to purchasing 
homes and building wealth for some manufactured home buyers are 
even more present in Indian Country. These issues can be 
addressed--and, if they are, consumers may enjoy greater access 
to a potential source of affordable home ownership.

Loan Type and Quality

    Manufactured homes are distinct from other types of housing 
in that they may be purchased on credit with either a chattel 
loan or a mortgage. Chattel loans apply only to the physical 
structure of the home, whereas a mortgage encompasses the land 
underneath the home. Chattel loans have fewer protections for 
borrowers, \11\ are more expensive, \12\ and are subject to 
much higher denial rates. \13\
---------------------------------------------------------------------------
     \11\ Ibid.
     \12\ Ibid.
     \13\ Russell, Jessica, Nora O'Reilly, Karl Schneider, Nicolas 
Melton, Nick Schwartz, and Sam Leitner. ``Manufactured Housing Finance: 
New Insights From the Home Mortgage Disclosure Act''. Consumer 
Financial Protection Bureau, May 2021 (hereafter CFPB Manufactured-
Housing Study). P. 5.
---------------------------------------------------------------------------
    Chattel loans may still be advantageous in some situations 
where a borrower does not own the land underneath a home. 
However, data show that borrowers of color or Native Americans 
are more likely to receive a chattel loan, even when they own 
the land underneath the home. \14\ By one estimate, as many as 
53 percent of chattel loan recipients may have been eligible 
for a standard mortgage. \15\
---------------------------------------------------------------------------
     \14\ CFPB Manufactured-Housing Study. Report summary website.
     \15\ See n. 9.
---------------------------------------------------------------------------
    In many other cases, including in Indian Country, a 
borrower may hold a lease on the land underneath a manufactured 
home. Their leaseholder rights can last longer than standard 
mortgage-loan terms--that is, a leaseholder might be given a 
99- or 50-year lease, longer than the standard 30-year mortgage 
term. This makes the difficulties in attaining a mortgage even 
more confounding.
    Market concentration may raise prices for borrowers and 
limit lending volumes. Borrowers have relatively few options 
for structures and loans in the manufactured-housing market. 
\16\ As of 2016, the four most-active manufactured-home loan 
companies in Indian Country captured 80 percent of the total 
market \17\--and two of those companies are owned by a single 
firm, Clayton Homes. \18\ In some cases, lenders will only work 
with specific manufactured-housing dealers. \19\
---------------------------------------------------------------------------
     \16\ See n. 14.
     \17\ Johnson, Kevin, and Richard Todd. ``Manufactured-Home Lending 
to American Indians in Indian Country Remains Highly Concentrated''. 
Federal Reserve Bank of Minneapolis, December 2017.
     \18\ Ibid.
     \19\ See n. 10.
---------------------------------------------------------------------------
    Whether owing to the market concentration or some other 
reason, manufactured-home owners are also much less likely to 
refinance their mortgages compared to site-built-home owners, 
even when market conditions are very favorable for refinancing 
(like they are now). \20\
---------------------------------------------------------------------------
     \20\ CFPB Manufactured Housing Study. P. 21.
---------------------------------------------------------------------------
    Site-built-home owners in metro areas may have become 
accustomed to receiving regular, unsolicited offers to 
refinance their homes. Manufactured-home owners, on the other 
hand, may struggle to find a lender willing to work with them 
on a refinance.
    This phenomenon is worth further study. The lower refinance 
rate may be partially due to manufactured-home loans' smaller 
size, which reduces the potential savings from a lower interest 
rate relative to the origination costs of a refinance. \21\ 
However, the lower refinance rate may be due to factors 
mentioned in this response--including market concentration, 
conventional lenders' unfamiliarity with the manufactured-
housing market, or a lack of secondary market options for 
manufactured-home loans.
---------------------------------------------------------------------------
     \21\ Ibid.
---------------------------------------------------------------------------

Lack of Access to Secondary Markets

    A lack of access to secondary markets is often cited as a 
downward pressure on the manufactured-housing market. \22\ 
Fannie Mae and Freddie Mac both curtailed their purchases of 
these loans in the 1990s. \23\ Both GSEs are exploring pathways 
to supporting manufactured-home markets via their duty-to-serve 
processes, and assertive action on their part may improve 
borrowers' options.
---------------------------------------------------------------------------
     \22\ See, for example, Prosperity Now's October 2019 report of its 
survey of State housing finance agencies. P. 1.
     \23\ Todd, Richard, and Kevin Johnson. ``Race, Location, and 
Manufactured-Home Loans on American Indian Reservations''. Federal 
Reserve Bank of Minneapolis, December 2018.
---------------------------------------------------------------------------
    Some avenues to the secondary market exist already for 
manufactured-home owners who are able to pursue a mortgage, 
such as through Fannie Mae's MH Advantage program.
    More generally, Fannie Mae has recently begun signing 
memorandums of understanding with tribes to expand access to 
the secondary market for some home loans made on trust land. 
Thus far, Fannie Mae has signed such memorandums with four 
tribes. \24\ The memorandums require tribes to establish 
certain ordinances and processes related to housing to protect 
lenders and borrowers.
---------------------------------------------------------------------------
     \24\ ``Native American Homeownership''. Fannie Mae. Accessed on 
July 8, 2021.
---------------------------------------------------------------------------
    If tribes are able to bring Fannie Mae's mortgage products 
onto their lands, a door may be opened for more lenders to 
serve manufactured-home buyers. Additional resources, like 
outreach or technical assistance, could increase the number of 
tribes pursuing such agreements.
    Tribes and states can also support the manufactured-housing 
market by offering clear guidance on how and when manufactured 
housing can be treated as real property. For example, in New 
Hampshire, lenders can simply create and perfect a security 
interest in a manufactured home, thus allowing manufactured-
home owners to receive the same foreclosure protections as 
other single-family-home owners. \25\
---------------------------------------------------------------------------
     \25\ Titling Requirements for Manufactured Homes. Fannie Mae, 
2020. Accessed on July 8, 2021.
---------------------------------------------------------------------------
    Lenders of chattel loans do not currently have a route to 
sell their loans on the secondary market. Fannie Mae proposed a 
pilot program for chattel loans at one point in the duty-to-
serve planning process, but this pilot was ultimately left 
unpursued. The idea is worth exploring again. The GSEs could 
consider an Indian Country specific focus for such a pilot, or 
expand its scope. In either scenario, the GSEs should be able 
to design a pilot that provides significant value to chattel-
loan borrowers who present minimal additional risks relative to 
conventional mortgage borrowers.

Loan Denial and Interest Rates

    From 2004 to 2016, denial rates for manufactured home loan 
applicants in Indian Country have fluctuated between 40 and 75 
percent. \26\ They have always been significantly higher than 
for site-built home loans, and data suggest these denial rates 
are also higher than the rates for manufactured housing outside 
of Indian Country. \27\
---------------------------------------------------------------------------
     \26\ See n. 23.
     \27\ See n. 23.
---------------------------------------------------------------------------
    When borrowers are approved, they pay higher interest 
rates. Native Americans in Indian Country are generally more 
likely to have high-cost loans, and this is even more true for 
those who are borrowing for a manufactured home. \28\
---------------------------------------------------------------------------
     \28\ See n. 6.
---------------------------------------------------------------------------

Policy Solutions

    Policymakers interested in affordable housing are 
increasingly turning to so-called ``naturally occurring 
affordable housing,'' or unsubsidized housing, as an 
alternative or supplement to subsidized housing. Manufactured 
housing is currently the largest source of unsubsidized housing 
in the United States. \29\
---------------------------------------------------------------------------
     \29\ See n. 9.
---------------------------------------------------------------------------
    Gains from public investments in manufactured housing will 
be limited if consumers are not better served, however. The 
costs from higher mortgage interests alone can offset 
consumers' gains from manufactured housing's cheaper 
construction costs. Those higher interest rates may be driven 
by some lenders' outdated or inaccurate perceptions of the risk 
involved in manufactured-housing loans--a reality that is also 
true of some lenders' general perceptions of Indian Country.
    Education for consumers about their financing options--and 
for lenders about the value and quality of manufactured 
housing--would be valuable. Consumers may be unaware of their 
options for refinancing or of the relative value of a mortgage 
compared to a chattel loan. Lenders may be unaware of advances 
in manufactured-home technology or policylike the fact that HUD 
has effectively established quality standards. \30\
---------------------------------------------------------------------------
     \30\ See n. 10.
---------------------------------------------------------------------------
    Funding set-asides for manufactured-housing pilots or 
projects may send a stronger signal. Indian Country represents 
a prime potential location for such a pilot. Half of the 
homebuyers on reservations already buy manufactured homes. \31\
---------------------------------------------------------------------------
     \31\ See n. 10.

Q.3. In Nevada, very few home loans were made with HUD's 
Section 184 loan guarantee. The report, ``The Higher Price of 
Mortgage Financing for Native Americans'', states that the 
Section 184 Indian Home Loan Guarantee Program and other loan 
guarantee programs offered by the Housing and Urban Development 
(HUD) Office of Native American Programs have been ``largely 
ineffective on tribal lands with a few clear exceptions.'' What 
factors make the program ineffective and what should we do to 
---------------------------------------------------------------------------
improve the program's effectiveness?

A.3. Barriers to use of the Section 184 program on tribal lands 
are longstanding but subject to improvement. Congress could 
improve the titling process, increase lender and tribal 
participation in the program, and support organizations that 
can act as an intermediary between lenders and borrowers.

Improving the Titling Process

    To increase the program's reach onto reservations, the 
Federal Government could improve the titling process for trust 
land. Our brief, Shortening the TSR timeline: A proposal to end 
delays that hinder Native home ownership, \32\ describes seven 
considerations for doing so:
---------------------------------------------------------------------------
     \32\ Colombe, James R., ``Shortening the TSR Timeline: A Proposal 
To End Delays That Hinder Native Homeownership'', Federal Reserve Bank 
of Minneapolis. September 2020.

    Preserve success within the BIA. Expand best 
---------------------------------------------------------------------------
        practices where possible.

    Require regular reporting on TSR-processing 
        timelines.

    Bring all BIA offices into compliance with existing 
        timelines and consider statutory deadlines for title 
        recording and certified TSRs.

    Create an electronic portal for residential 
        mortgage packages to provide certainty and efficiency 
        to borrowers and lenders.

    Create an interagency report card, with regular 
        updates, to spur collaboration between tribes and 
        Federal agencies, build a foundation for 
        accountability, and help identify solutions to trust 
        land title issues for residential mortgages.

    Remove barriers between tribes and tribal land 
        records.

    Consider a centralized mortgage-processing center.

Increasing Lender and Tribal Participation

    Increased lender and tribal participation could also 
increase the program's effectiveness. Nationwide, 201 of the 
574 federally recognized tribes have taken the steps necessary 
to participate in the Section 184 program. \33\ Tribes are 
required to pass housing ordinances that define and enforce 
lenders' and borrowers' rights in the lending transaction.
---------------------------------------------------------------------------
     \33\ ``Section 184 Participating Tribes List''. HUD. Accessed June 
30, 2021.
---------------------------------------------------------------------------
    The maximum total loan value Section 184 can guarantee in 
recent years has been set at $1 billion. In fiscal year 2018, 
lenders guaranteed about $600 million worth of mortgages. \34\
---------------------------------------------------------------------------
     \34\ ``FY 2020 Congressional Justifications: Indian Housing Loan 
Guarantee Fund'' (Section 184). HUD. P. 10-2. Accessed July 13, 2021.
---------------------------------------------------------------------------
    About 108 lenders participated in the Section 184 program 
in a given year from 2005 through 2015; half of the loans over 
that time period were made by just 10 lenders. \35\ Thus, when 
a tribe is registered to take part in the Section 184 program, 
its members often have few choices for a lender.
---------------------------------------------------------------------------
     \35\ Listokin, David, Kenneth Temkin, Nancy Pindus, and David 
Stanek. ``Mortgage Lending on Tribal Land''. HUD, January 2017. P. 13 
and Appendix B-7.
---------------------------------------------------------------------------
    The relative shallowness of the pool of lenders doesn't 
just have implications for today's Indian Country home buyers; 
it also highlights a potential vulnerability in the program. If 
one of the largest lenders were to exit the market, borrowers 
would face an even steeper uphill climb to finance their homes 
and thousands of loans may fall through the cracks.
    HUD does have one potential option to increase the number 
of available lenders: further utilize a ``sponsored entity'' 
provision that allows HUD 184/184A direct guarantee lenders to 
``sponsor'' brokers like Native CDFIs. Additional training and 
support are needed by Native CDFIs to more fully participate in 
this capacity.

Identifying Borrowers

    There were 121 lenders registered to participate in the 
Section 184 program in May 2020. \36\ Of these, 75 serve only a 
handful of States--or even a single State--and may only be 
familiar to certain tribes within those states. \37\ Consumers 
elsewhere in the United States, on the other hand, might expect 
to have virtual or physical access to the thousands of lenders 
willing to underwrite a conventional mortgage.
---------------------------------------------------------------------------
     \36\ ``Section 184 Participating Lenders List''. HUD. Accessed 
June 30, 2021.
     \37\ Ibid.
---------------------------------------------------------------------------
    Low participation in Section 184 reflects a general absence 
of lenders in Indian Country. Without a physical presence or 
longstanding history in communities, banks may have a harder 
time identifying qualified and interested borrowers. According 
to some banking contacts, this increases the cost of 
originating loans.
    Intermediary organizations like Native CDFIs may have the 
relationships necessary to connect willing lenders with a 
potential clientele.
    This was demonstrated in a pilot project in HUD's Section 
502 lending program. Native CDFIs in South Dakota worked with 
the USDA and lenders to greatly increase the number of loans 
made through that program on reservations.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR LUMMIS
                     FROM ALENE TCHOURUMOFF

Q.1. I want to start with some questions about how the census 
may have inaccurately counted, because it's so difficult, the 
number of Native Americans and how many are living in each 
household? You know, if you have a Native American household 
where there are multiple generations, there are extra workers, 
they are trying to keep everybody housed, perhaps in housing 
that is smaller than would normally be considered in the United 
States adequate for that many people, then some--the census 
comes along and maybe they're reluctant to discuss how many 
people are living in their household.
    So, question number one, is counting--is the census an 
issue, and is it contributing to undercounts? . . . And if you 
have some thoughts about concrete steps we can take to address 
this, I'd love to have you submit them in in writing. \1\
---------------------------------------------------------------------------
     \1\ Per the hearing transcript.

A.1. Thank you for allowing me the opportunity to elaborate on 
the issue of undercounting of American Indians and Alaska 
Natives (AIANs) in tribal areas in the American Community 
Survey (ACS) and the decennial census. The undercounting of 
AIANs in previous censuses is an important concern for tribal 
governments and has been widely reported. \1\ For example, 
after a post-enumeration survey, the U.S. Census Bureau 
determined that the AIAN population living in tribal areas was 
undercounted by 4.9 percent in the 2010 Census \3\ (compared to 
a 0.9 percent overcount for the same population in the 2000 
Census). This undercount can compromise the effective 
allocation of Federal funds to tribes, amounting to hundreds of 
millions of dollars in lost funds. \4\
---------------------------------------------------------------------------
     \2\ DeWeaver, Norm. ``American Community Survey Data on the 
American Indian/Alaska Native Population: A Look Behind the Numbers''. 
National Congress of American Indians (NCAI), February 18, 2013; and 
``The American Community Survey: Serious Implications for Indian 
Country''. NCAI, October 11, 2010. See also ``Disaggregating American 
Indian and Alaska Native Data: A Review of Literature''. NCAI, July 
2016.
     \3\ ``Census Bureau Releases Estimates of Undercount and Overcount 
in the 2010 Census''. U.S. Census Bureau news release, May 22, 2012.
     \4\ Reamer, Andrew. ``Counting for Dollars 2020: The Role of the 
Decennial Census in the Geographic Distribution of Funds, Report #2''. 
George Washington Institute of Public Policy, March 2018. P. 1. We use 
these estimates of the cost of the undercount per person per State per 
year as a range of the impact of the undercount of the AIAN population 
living on reservations.
---------------------------------------------------------------------------
    The U.S. Census Bureau has already taken proactive steps to 
address the undercounting of AIANs in tribal areas, including 
through partnerships with tribes and Native organizations. 
However, there are additional ways to improve the accuracy of 
both the decennial census and the ACS in the future. \5\
---------------------------------------------------------------------------
     \5\ Starting in 2011, the U.S. Census Bureau made changes to its 
enumeration of individuals living in tribal communities. First, the 
bureau no longer uses mail, Internet, and phone interviews for all 
individuals who have unmailable addresses and exclusively uses in-
person interviews. All locations in remote Alaska, many of which are 
located in Alaska Native Villages, are treated as unmailable. The U.S. 
Census Bureau has also started to consult with tribal leaders to 
further improve the accuracy of population counts in tribal areas. For 
more description of these improvements, see the bureau's Handbook for 
Consultation With Federally Recognized Tribes.
---------------------------------------------------------------------------
    Our chief suggestion pertains to new privacy measures 
implemented by the U.S. Census Bureau in the 2020 Census and, 
possibly, the ACS in the near future. Research conducted by 
Randall Akee, a professor at the University of California, Los 
Angeles and research affiliate with CICD, has shown that on 
reservations with fewer than 5,000 people--the large majority 
of reservations--the bureau's new privacy algorithm will 
decrease the measured population by 34 percent. \6\ Relatedly, 
use of the most-recent privacy algorithm (Demonstration Project 
PLB 12.2) \7\ will cause some smaller tribes to report no 
population in the 2020 Census even though their communities are 
populated. I recommend that the U.S. Census Bureau allow tribal 
governments to determine how to trade off inaccuracy with 
privacy considerations when the bureau implements privacy 
measures. \8\
---------------------------------------------------------------------------
     \6\ Gus Wezerek and David Van Riper. ``Changes to the Census Could 
Make Small Towns Disappear''. New York Times, February 6, 2020.
     \7\ Yvette Roubideaux and Gwynne Evans-Lomayesva. ``What's the 
Price of Privacy? 2020 Census Disclosure Avoidance System Impacts on 
Tribal Nation Census Data''. NCAI, May 18, 2021.
     \8\ This recommendation is consistent with the recommendation by 
the NCAI to honor the Government-to-Government relationship between 
tribes and the Federal Government when determining the right tradeoff 
between privacy and accuracy in the 2020 Census. See the NCAI's 
research and policy recommendations website for more details.
---------------------------------------------------------------------------
    Another promising approach to addressing the undercount is 
to employ more tribal members as enumerators in future data 
collection. This helps to overcome issues of trust and allows 
the decennial census to reach more American Indians and Alaska 
Natives. This suggestion echoes the concern of tribal leaders 
and advocates. \9\
---------------------------------------------------------------------------
     \9\ For example, Carol Evans, chairwoman of the Spokane Tribal 
Business Council, recently stated, ``That's why it's important that 
we're able to hire people to go out and talk to our tribal members and 
explain why it's so important to complete the census. If we're able to 
hire our own people, these are people that the tribal members will 
trust.''
---------------------------------------------------------------------------
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
             SENATOR CORTEZ MASTO FROM MICHAEL GOZE

Q.1. Can you elaborate on the role of the Indian CDBG program 
to your tribes and its impact on affordable housing and 
community development?

A.1. The Ho-Chunk Nation has long utilized the ICDBG grant 
program for community development projects to improve our low-
income communities. The greatest utilization of these grants 
has been in the improvement and expansion of community 
infrastructure. Using the ICDBG the Ho-Chunk Nation and Ho-
Chunk Housing and Community Development Agency, have provided 
community water and sewer systems to 8 HCN villages throughout 
Wisconsin. Infrastructure and lot development have allowed the 
HCN to expand the affordable housing footprint for the Ho-Chunk 
Nation and increase economic development opportunities for 
tribal members. The Ho-Chunk Nation has also used ICDBG funds 
for the development of several community facilities that have 
enriched HCN communities. These development projects included 
park development, construction of an HCN Law Enforcement 
administration building, construction of a daycare facility 
providing daycare using the Montessori Method for over 50 
children, construction of community centers in four of our HCN 
communities, the construction of Head Start schools, and 
rehabilitation of a youth learning facility. Finally, HHCDA has 
used ICDBG funds to install photovoltaic solar panel systems on 
over 150 affordable housing rental units, lowering the monthly 
housing expenses for resident families. In conclusion, the 
ICDBG program has had an enormous positive impact on our 
affordable housing communities, both through the economic 
impact of new job creation and through community enhancement.

Q.2. Can you discuss the impact of the additional ICDBG funds 
allocated through the CARES Act? What was the impact of those 
funds on your tribes?

A.2. The funding impact of the additional ICDBG funds was a 
tremendous boost to the Ho-Chunk Nation and Ho-Chunk Nation 
Tribal members. The majority of funds used, was in direct 
assistance grants to tribal members struggling with rent, 
mortgage, and utility payments. HHCDA also used these funds to 
procure and distribute a great deal of cleaning supplies and 
PPE.
    Ho-Chunk Housing and Community Development Agency (HHCDA) 
applied for the funds as the TDHE (tribally designated housing 
entity) of the Ho-Chunk Nation and received 1,500,000. HHCDA 
used these funds to provide assistance to Tribal members in the 
following areas.

    Providing Rental Assistance, HHCDA began providing 
        rental assistance to both low and high income families 
        that reported having difficulty paying rent due to the 
        COVID-19 crisis.

    Providing Mortgage Assistance, HHCDA began 
        providing rental assistance to both high and low income 
        families to reported difficulty paying rent due to the 
        COVID-19 crisis.

    Utility Grants of $350, to Ho-Chunk Nation Elders 
        that are income eligible.

    Purchase of PPE to be distributed to Ho-Chunk 
        Tribal members, with the purpose of protecting 
        themselves and their families for the current COVID-19 
        Crisis. Gloves, face shields, masks, and protective 
        gowns.

    To date, HHCDA has been able to financially assist over 830 
households with rental, mortgage or utility assistance and we 
were able to distribute cleaning supplies and PPE to over 700 
households. Currently HHCDA is still processing assistance 
applications with this funding.
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
            SENATOR CORTEZ MASTO FROM ERIC SHEPHERD

Q.1. Do you think the Nation's 11 Federal Home Loan Banks 
invest appropriately with the Nation's Native American tribes?
    Do you think a set-aside for Native American communities is 
necessary for tribes to gain investments from the Federal Home 
Loan Banks?

A.1. Response not received in time for publication.

Q.2. Can you elaborate on the role of the Indian CDBG program 
to your tribes and its impact on affordable housing and 
community development?

A.2. Response not received in time for publication.

Q.3. Can you discuss the impact of the additional ICDBG funds 
allocated through the CARES Act? What was the impact of those 
funds on your tribes?

A.3. Response not received in time for publication.