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Indian housing loses block grant money, lending authority

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WASHINGTON - American Indian housing not only will lose $7 million in block grants under the Bush Administration's proposed fiscal 2005 budget, but more than $200 million in lending guarantee authority.

Softening the blow somewhat, the lost $7 million represents not a true drop in funding, but money that was added to the Native American Housing Assistance and Self Determination Act block grant late in the fiscal year 2004 process, essentially flat-lining the program at original 2004 levels of $647 million.

And the loss of guarantee authority, contained in a $21 million "rescission" from the Department of Housing and Urban Development Title VI Indian loan program, represents money that was not used in previous years. The program will remain functioning, as $2 million in additional Title VI guarantee money has been proposed for 2005.

The lost $21 million would actually be sufficient to guarantee many times that amount of lending. In fiscal 2002, for instance, the $6 million Title VI set aside was estimated by HUD to be able to guarantee $55 million in loans.

According to Kristy McCarthy, governmental affairs director for the National American Indian Housing Council, "the budget document targets the unobligated balance remaining from funds appropriated in fiscal year 2004 and prior years, presumably because of underutilization of the program. HUD officials have warned that carrying large balances in the loan programs could invite rescission."

Similarly, the budget proposes a drop of $4.3 million in guarantee authority for the HUD 184 guaranteed Indian mortgage program (from $5.3 million to $1 million), which would translate to tens of millions in lost lending authority.

HUD Assistant Director for Public and Indian Housing Michael Liu recently told an NAIHC meeting that for the two programs, as of Nov. 30, 2003, $591 million of credit authority remains unused for HUD 184, in which loans to individual Indians, tribes, or Indian Housing Authorities are 100 percent guaranteed.

For Title VI, which is 95 percent guaranteed by HUD and collateralized by future NAHASDA grants, $372 million in credit authority remained unused, Liu said.

The HUD 184 program has made more than 1,300 loans since inception, averaging $100,000 per loan. Title VI, used more for big project loans, has been utilized less but has achieved one blockbuster loan, a $50 million funding for the Cherokee Nation of Oklahoma.

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In another reverse, HUD's Indian-friendly Rural Housing and Economic Development program has been zeroed out by the budget. In recent years, Indian housing and economic development projects have taken at least a quarter of the $25 million appropriated each year.

Here, too, there is a silver lining: the Bush Administration has tried twice before to zero out RHED, only to have Congress vote it back in.

Also zeroed out, according to an analysis by NAIHC, is $2.2 million awarded to NAIHC in 2004 for technical assistance and training. Apparently, according to an NAIHC spreadsheet, some $10 million for Native Hawaiian housing has been zeroed out as well, although the same thing happened in both fiscal 2003 and fiscal 2004, only to have the funding restored by Congress.

NAIHC chairman Russell Sossamon recently called for a fiscal 2005 increase in the NAHASDA block grant to $700 million, as a first step toward an eventual level of at least $1 billion a year.

Sossamon, who is also executive director of the Housing Authority of the Choctaw Nation of Oklahoma, testified before the Senate Indian Affairs Committee that he was "disappointed" in the Bush Administration budget request, because even with level funding, "inflation has risen steadily over the past four years, the cost of construction continues to increase, and the Indian population is growing."

He told the senators that NAIHC calculates that $319.75 million will be available to build new housing in fiscal 2005 under the proposed funding levels.

"With an average cost of $125,000 per unit, tribes should be able to build approximately 2,550 new units of housing nationwide in 2005. According to the Census, more than 40,000 Indian houses are overcrowded."

Sossamon also recommended a doubling of the Indian share of the Community Development Block Grant program, to $150 million, reinstating RHED at $25 million, an increase to $35 million in the Bureau of Indian Affairs Housing Improvement Program, restoration of the $2.2 million in NAIHC TA money, and an increase in infrastructure funding. He also urged removal of a restriction that forbids Indian Health Service infrastructure funds to be used for homes that have received HUD funding.

He told the committee members, "we urge you not to forget the desperate housing conditions Native Americans are enduring day after day."