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House Votes to Reinstate Title VI Guarantee Authority

WASHINGTON - The federal government's Title VI lending program for American
Indian projects got a vote of confidence recently when the House of
Representatives voted to reinstate its original guarantee level of 95
percent of the loan amount.

The percentage of guarantee had been reduced to 85 percent on Title VI
loans, which have been used for large-scale housing and infrastructure
projects on Indian land.

H.R. 4471, which now moves to the Senate for consideration, is intended to
boost lender interest in the program by decreasing their risk from 15
percent of the loan amount to 5 percent. Sponsored by Rep. Rick Renzi,
R-Ariz., the Homeownership Opportunities for Native Americans Act of 2004
follows the first-ever Congressional housing hearing on Indian land May 3
on the Navajo reservation, at which the reduction in authority was
mentioned as problematic.

To date, $77 million in loans have been guaranteed under Title VI, which
takes its name from the section of the Native American Housing Assistance
and Self Determination Act (NAHASDA) that created it. The biggest to date
has been a $50 million loan to the Cherokee Nation of Oklahoma.

The underused Title VI has encountered significant challenges recently, as
loan guarantee amounts (rather than percentages) have been reduced through
recision to the Treasury. The program has seen hundreds of millions of
dollars in guarantee authority go unused, and now the rest of the unused
guarantee money may go back to the Treasury under an Administration
proposal. The program would continue, but with less guarantee money than in
previous years.

The law does not address the lost guarantee money, only the percentage of
each loan that is guaranteed.

The Federal Home Loan Bank of Seattle has helped the program by buying one
of the Title VI loans in the secondary mortgage market. It has committed to
buying $100 million in Title VI loans, but the small volume of loans made
and the fact that they make good loans to hold in a bank's own portfolio
(because of the Federal guarantee) have limited the market to buy and sell
them.

The National American Indian Housing Council lauded the bill's passage.
Chester Carl, the recently-elected chairman of NAIHC (he has served several
previous terms and is a well-known spokesman for Indian housing issues),
said "legislation providing improved tools for Indian housing is something
that is desperately needed, as there are thousands of Native families
residing in poor-quality, overcrowded homes awaiting a chance for better
housing." Carl is also executive director of the Navajo Housing Authority,
the nation's largest Indian housing authority.

Rep. Renzi,. whose large Arizona district includes the Arizona portion of
the Navajo Nation, the Hopi, and two Apache tribes as well as smaller ones,
has been busy on the Native legislation front.

He recently introduced legislation to reinstate the 1971 Navajo Community
College Act, noting that Dine College facilities have declined over the
years. This has created "serious health and safety risks to students,
employees and the public," he said. The bill would provide funding to help
the college modernize, repair and rehab itself.

The Congressman also recently successfully fought to have funding for
Native American health care and education put back into the federal budget.
In his district, this action will provide $19 million for the construction
of a health clinic at Red Mesa and $2 million for staffing at the Pinon
clinic on the Navajo. Another $1 million will fund planning for hospitals
at San Carlos and Kayenta.

The action also provides for a restoration of BIA school funding levels to
$60 million nationwide and $2 billion in total Indian health care money.
That $2 billion represents a net gain of $97 million from the previous
budget.

Finally, Rep. Renzi co-sponsored a Tribal Forest Protection Act which
passed the House Resources Committee. It is intended to encourage tribes to
assist in forest care projects like removing burnables.

Renzi noted that last year, 20 wildfires swept over Indian lands, including
a deadly series in California that left 10 people dead and burned two
rancherias to the ground.