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Housing needs are still dire, but hope is growing

WASHINGTON - A March 22 hearing of the Senate Committee on Indian Affairs on housing issues among tribes offered a stark contrast between a familiar story and a strange new one.

The familiar story is that Indian country is under-housed, and in some cases un-housed, without the funding it requires to catch up.

Oglala Sioux Tribe President John Yellow Bird Steele spoke for the familiar perspective. In dwelling on his own personal family situation, he seemed to command an extra measure of respect in the ultra-hushed hearing room. His two children have 12 children between them. Both live with their families in overcrowded conditions, using cast-off materials to patch up and improve their homes. Heating in the high Plains winters calls for unsafe improvisations with wood-burning stoves. Outhouses stand in for plumbing.

Their situation isn't unusual on the tribe's Pine Ridge Reservation, where hundreds of families dwell in overcrowded circumstances, Steele related. But the overcrowding doesn't register in housing surveys, he stated in written testimony, because the adults know overcrowding may violate regulations and constitute grounds for eviction. ''So they have become very skilled at moving people into hiding whenever our reservation housing personnel conduct surveys.''

Newlyweds live with parents or other relatives, elders as well, and children share a bedroom or a bed with multiple siblings. Overcrowded housing aggravates the full slate of social problems on Pine Ridge, from unemployment to alcoholism to domestic abuse, school dropout and crime. ''This is all reflected in our tribal court records.''

George Rivera, governor of Pojoaque Pueblo in New Mexico, seconded Steele's account.

The strange new story, strange and new because it's a relative success story in the field of Indian housing, came from Orlando Cabrera, assistant secretary for Public and Indian Housing within the Department of Housing and Urban Development. Without for a moment doubting the dire specifics offered by Steele and Rivera, Cabrera described the measurable successes of HUD's Indian Housing Block Grant and loan guarantee programs.

During fiscal year 2006, the block grant program enabled tribes and tribally designated housing authorities to build, acquire or ''rehab'' more than 1,600 rental units and more than 6,000 homeownership units, Cabrera said. ''Each of these units became a home to a Native American family.''

In addition, Cabrera insisted that the ''Section 184'' Indian housing program (so called after its place in the Housing and Community Development Act of 1992) is developing a secondary market for home mortgage loans in Indian country, previously an impossibility because Indian land is held in trust by the federal government, inalienable, and so ineligible as collateral toward home mortgage loans.

In the wider society, the secondary market for home mortgage loans assures the average American that he or she will be able, for instance, all else being equal, to sell a home in one location and buy one in another. The assurance is possible because banks have the liquidity - the ready capital - to make the loans. This is because home mortgage loans are packaged as an aggregate asset and sold as investments on the capital markets; the interest on the loans produces a profit to investors, who in turn supply liquidity to the banks. The secondary market works because of the mortgage principle - homes and the land underlying them are put up as collateral on the loans and can be repossessed in the event of default.

For years, a secondary market for home mortgage loans has been a holy grail in Indian housing, long sought but rarely sighted. Some experts in Indian housing consider the secondary home mortgage loan market in Indian country too piecemeal to qualify as a true secondary market - that is, secondary markets can be found on separate reservations or in tribal jurisdictional areas, but as of yet the separate markets do not span Indian country. The hurdle has always been the trust status of Indian land, which cancels its value as collateral.

The Section 184 home loan guarantee program provides access to private mortgage financing on trust land or land located in an American Indian or Alaska Native jurisdictional area, Cabrera said. ''The program may be used by the individual to acquire a mortgage, or by the tribe to build new homeownership units within a community.''

In FY '06, he added, the Section 184 program guaranteed 1,138 single-family loans to American Indian home purchasers, representing a $190 million investment. In current FY '07, 470 loans have been guaranteed, totaling $77.5 million.

''This represents an 80 percent increase in the number of loans guaranteed when compared to FY 2005 program activity, and a 90 percent increase in the dollars invested. FY 2007 first-quarter totals represent a 49 percent increase in dollar value over the same period in FY 2006,'' Cabrera said.

It wasn't clear from the hearing how far Cabrera meant to go in describing a secondary market for home mortgage loans in Indian country. But from the views set forth in his testimony, the statistics clearly signal a start.

HUD can guarantee the Section 184 loans for any fiscal year only to the extent that Congress has appropriated funds, Cabrera noted.

He described great progress in the little-publicized problem area of expending the funds appropriated for Native housing programs. Unexpended appropriations are of the first concern in Congress because they suggest that the purposes of the funding are not being achieved.

''In an effort to ensure that grant funds are disbursed in a timely manner, HUD identifies those [tribal or tribally designated] recipients with undisbursed grant funds more than three years old and works with them to reduce those balances. In 2005, program managers identified more than $285 million in such funds and were successful in reducing that amount by more than 50 percent. In 2006, $230 million in undisbursed, older-than-three-years grants were reduced by almost 30 percent,'' Cabrera said.

''This represents substantial progress and indicates that tribes are increasing their capacity to comprehensively manage and grow their affordable housing programs.''