Federal home loan bank money unused

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SAN DIEGO ? The Federal Home Loan Bank system is a good source for money for Native housing and economic development, having funded about $50 million to date. In some cases, however, tribes are not taking full advantage, said a prominent tribal attorney.

Attorney Cate Stetson, a former director of the Federal Home Loan Bank of Dallas, pointed to a $25-million loan program for water or wastewater facilities available from the district bank that, to her knowledge, has been untapped by Indian tribes.

"Not a single tribe has asked for the money," Stetson told the annual meeting here of the National American Indian Housing Council.

Stetson, founder of Albuqueque, N.M.-based Stetson Law Offices PC, said the program provides up to $5 million per loan at a low interest rate and is targeted to tribal areas, the Southwest Border region and the Lower Mississippi Delta region.

"This money is there for you," she told Indian housing leaders at a panel session about the Federal Home Loan Bank system at the NAIHC conference. "In many cases it's not being asked for."

Stetson noted that 45 percent of all mortgage finance in the country comes through member financial institutions of the FHLBs, who in turn borrow money, called "advances," from their district banks.

The session detailed the efforts by the 12 individual Federal Home Loan Banks to finance Native housing, mostly through their Affordable Housing Programs (AHP) and Community Investment Programs (CIP).

James Yacenda, Community Investment officer of the San Francisco FHLB, went over various programs his and other district banks make available in Indian country, including AHP, CIP, and Advances for Community Enterprise (ACE).

San Francisco has funded an Indian healthcare village in Humboldt County, Calif., through ACE, he said. The funding can be used for things like infrastructure, small business lending, childcare facilities and charter schools.

CIP is a low-rate loan program, both for rental projects and individual buyers.

Mortgage purchase programs started by two of the FHLBs have potential to do business in Indian country. The Federal Home Loan Bank of Seattle, for instance, has committed to buy $100 million of federal Title VI loans, although it has yet to buy any; the Chicago FHLB has a mortgage purchase effort as well.

While no overall American Indian total was given for the 12 banks, which are regulated by the Federal Housing Finance Board of Washington, DC, approximately $50 million has been financed to date. Since AHP money is intended as "gap" finance to finish deals, the leveraging capacity of that money may be ten times that amount.

The Federal Home Loan Banks are required by law to invest 10 percent of their profits into their affordable housing efforts.

The Federal Home Loan Banks of Seattle, San Francisco, Dallas, Topeka and Des Moines, Chicago and Atlanta have funded Indian housing, and Des Moines has just formalized a Native American Housing Initiative, where it will set aside $250,000 for use on Indian projects annually.

According to informed estimates, Seattle has funded about $18 million in Indian projects, Des Moines $18 million, San Francisco $4 million, and Dallas about $3 million.

Stetson urged Indian housing leaders to become involved with the affordable housing advisory councils of the 12 banks, as well as their board of directors.

She said Kevin Gover, former head of the BIA, served on an FHLB Board, as has Robert Gauthier, director of the Salish & Kootenai Housing Authority in Montana.