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Cost-Based Valuations Allowed on Indian Property

ANAHEIM, Calif. - A temporary fix to help alleviate the almost total lack
of mortgage infrastructure on Indian lands has been introduced by mortgage
agency Fannie Mae.

The agency, at the annual meeting of the National American Indian Housing
Council, addressed the issue of "comps," comparable sales prices on other
properties gotten routinely in most parts of the country. However, on
Indian land, often there are no comps to be had due to lack of real estate
sales or a mortgage market.

Fannie Mae will now allow a cost-based property valuation on Indian
mortgages it buys, getting around the comps problem and allowing a comps
market to build up slowly as sales are done.

The agency has pledged to invest $1.25 billion in tribal areas over 10
years, the largest housing commitment ever made, either through equity
investment or by buying mortgages made by lenders.

In other convention news, longtime NAIHC chairman Chester Carl returned to
lead the board of the group, defeating his successor, Russell Sossamon, who
heads the Housing Agency of the Choctaw Nation of Oklahoma.

Carl, who had served several two-year terms prior to stepping down in 2002,
said he stood for election because of what he perceives as threats to the
Native American Housing Assistance and Self Determination Act (NAHASDA.) He
is the long-time head of the Navajo Housing Authority.

In other NAIHC news, Kermit Mankiller, director of training for NAIHC, said
that states must be open to more Indian awards under the Low Income Housing
Tax Credit program. That program, which provides funds for rental housing,
is administered by states and gets $1.75 per citizen in the state. Since
Indians are counted in the per capita, Indian projects are eligible.

But, Mankiller said at a Portland, Ore. meeting of the National Council of
State Housing Finance Agencies, tax credits have yet to be awarded to some
tribes in certain states.

The session heard, from California Indian Legal Services attorney Jenny
Kim, that at least seven California tribes have been turned down recently
to participate in the tax credit program.

Under the LIHTC, developers are awarded tax credits, which they then sell
to investors as an equity stake in the housing project. The investor not
only gets a tax reduction, but typically can buy the credits at a discount,
getting a double benefit.

Two groups, Raymond James Tax Credit Funds and Travois, Inc., have been
successful in packaging some $100 million in tax credit deals in Indian
country.