WASHINGTON - The first loan has closed under Title VI of the Native American Housing Assistance and Self Determination Act, a new method of financing with a big potential to help fill the pressing need for housing on Native homelands.
The loan, $1.7 million from First National Bank of Anchorage, will finance eight units of housing in Mountain Village, Alaska, for the Asa'carsarmiut tribe.
Three more applications for Title VI loans are just about ready to be sent to the U.S. Department of Housing and Urban Development for its guarantee, and others are in the planning stages.
Title VI allows tribes or their housing entities to "leverage" the amount they get from HUD to fund additional housing need by five times, 95 percent guaranteed by the federal government. Tribes are responsible for guaranteeing the other 5 percent, which they can do by placing a certificate of deposit with the lender or a letter of credit. Bonds are also allowed under Title VI, though there have been no proposals for any yet.
A tribe receiving $1 million in NAHASDA housing block money annually, can designate $400,000 of that grant to maintain its current stock of assisted housing and $600,000 for "additional need."
It could then get a bank loan for five times the "additional need" $600,000, or $3 million, under Title VI. That would stretch its original $1 million into $4 million.
Title VI could help make a dent in the estimated 200,000 units of housing needed to shelter the million people who live in tribal areas until recently redlined by lending institutions.
The intent of NAHASDA was to encourage tribes to break free of the welfare-like doleout of housing money from Uncle Sam into more vital partnerships with lenders and Wall Street to help solve the intractable problems that resulted in Third World-like conditions on reservations.
HUD's Title VI guaranty authority currently is at about $150 million.
Title VI was part of the original NAHASDA legislation, which went into effect in 1997, but it wasn't well-publicized and tribes weren't making proposals to get the money. So last year HUD made a grant to IHA Management Systems Inc. of Phoenix to market and provide technical assistance to tribes on Title VI.
Three more packages should be sent to HUD for approval by Sept. 30, says Valerie Harris, a systems associate. Tribal entities include the Pojoaque Housing Authority in New Mexico, which wants to fund infrastructure for 30 units of housing and an office building, the Northern Arapahoe Tribe in Wyoming, which is asking about $250,000 for infrastructure in a subdivision of about 10 units, and the Lac Courte Oreilles Tribe of Wisconsin, which is looking for about $1.6 million to help finance a 40-unit development.
In addition, Harris said the Catawba Tribe of North Carolina is said to be close to submitting a package.
Mortgage agency Fannie Mae has agreed to provide a secondary market by buying Title VI loans from the lenders.
IHAMS has hired Aneva Yazzie, Navajo, to provide technical assistance to the Pojoaque Housing Authority, and David Melchior to provide the service to the Asa'carsarmiut. They join president Chuck Merritt and associates Harris, Al Fishman, Jim Hamilton, Keith Tryck and Charles Anderson.
Yazzie said she is also working with the Jicarilla Apache Tribe of New Mexico and the Rosebud (S.D.) Housing Authority on proposals for Title VI financing. Rosebud is looking for additional money to help complete a manufacturing facility, she said.
Yazzie said NAHASDA has "opened a lot of doors" for financing housing and economic development, but noted that some tribes and their housing entities are still behind the curve on the availability of the funds.