Liu adds to legacy through HUD 184 expansions


WASHINGTON - The federal government's top Indian housing official initiated
a series of rapid expansions in programs during his last month in office.

A fourth set of tribes has expanded the areas in which the Housing and
Urban Development Section 184 guaranteed mortgage can be offered, while the
first loan under the 184A program for Native Hawaiians has been guaranteed.

Michael Liu, HUD's assistant secretary for Public and Indian Housing, was
set to leave HUD at the end of April, but acted aggressively in the last
weeks of his tenure to increase the scope of the HUD 184.

Most importantly, he approved applications by six tribes to increase the
"Indian area" where HUD 184s can be extended to tribal members. Until just
last year, tribes could offer HUD 184 mortgages only to those members on
reservations or the "Indian areas" of states without reservations, like
Alaska and Oklahoma.

Now, they can petition to be allowed to facilitate loans to tribal members
living in areas where the tribe has a traditional presence, or where
significant numbers of tribal members live now.

Four Midwest tribes added the states of Michigan, Indiana and Minnesota to
their territories in the most recent of these expansions.

They are the Bay Mills Indian Community of Michigan and the Sault Ste.
Marie Tribe of Chippewa Indians, both of which are expanding their Indian
areas to the whole state of Michigan.

The Pokagon Band of Potawatomi Indians now will be allowed the entire state
of Indiana as its Indian area, and the Mille Lacs Band of Ojibwe will now
have the entire state of Minnesota for HUD 184s.

The Pascua Yaqui tribe of Arizona recently expanded its HUD 184 territory
to the entire state of Arizona, while the Ho-Chunk Nation of Wisconsin also
recently expanded its area. The first tribe to take advantage of this
expansion, the Seminole Tribe of Florida, late last year expanded its
territory to the entire state of Florida.

One of the expanded territory provision's clear targets is urban Indians.
To date, the cities of Miami, Chicago, Minneapolis and Phoenix have been
added to eligible areas.

HUD announced its current total of 2,159 home loans guaranteed by the HUD
184, for $216 million in finance, making it by far the most successful
government mortgage program in Indian country.

HUD guaranteed $64 million of HUD 184s in fiscal 2004, and set a goal of
$100 million for this fiscal year, which ends Sept. 30. The expansions
should help it meet its aggressive goals. Fiscal 2004 volume was nearly
triple that recorded in fiscal 2003.

Tom Wright, a former housing official with the Grand Traverse Band, is the
current head of HUD's loan guarantee program, which includes the HUD 184
and the lesser-used Title VI loan program.

It is unclear who will replace Liu, who served as assistant secretary of
Public and Indian Housing since September 2001.

The HUD 184 guarantees 100 percent of a private lender's outlays to
eligible Indians, tribes, or tribally-designated housing entities. It can
be used for new construction, rehabilitation or refinancings. The Title VI
program guarantees 95 percent of outlays and is collateralized by tribes'
federal housing block grant money. It has been used for construction and
infrastructure funding.

Liu, in an exit interview, said he hoped the states of California, Nevada
and New Mexico can also be opened up to the HUD 184.

He also suggested tribes get involved in creating a "secondary" market for
HUD 184s. In a secondary market, a mechanism buys the loans from the
originating lender, giving the lender more funds they can use to make
additional loans.

There is already a nascent secondary market for the HUD 184, as they can be
packaged into Government National Mortgage Association securities, which
are sold to investors. The conduit Liu suggested would be in addition to,
and compete with, Ginnie Mae.

Liu, who is partly Native Hawaiian, was also able to announce before
leaving office that HUD is guaranteeing its first loan under the HUD 184A
program in Hawaii.

The construction loan from Wells Fargo Home Mortgage will build 20 units
for Natives through the Department of Hawaiian Home Lands in Waiohuli,

In another positive development, HUD 184 loan limits have been lifted in
high-cost places like Alaska. Limits have been lifted to match those used
by the Federal Housing Administration's Section 214 loan programs. For
single-family homes, that means a boost in eligible prices from $290,000 to
$435,000; and for two-family homes, from $372,000 to $558,000.

In addition, Liu said there will be no problem in combining public housing
section 8 subsidies with the 184 program to help low-income families