[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
IMPROVING HOUSING OPPORTUNITIES
FOR NATIVE AMERICANS
=======================================================================
FIELD HEARING
BEFORE THE
SUBCOMMITTEE ON
HOUSING AND COMMUNITY OPPORTUNITY
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
MAY 3, 2004
__________
Printed for the use of the Committee on Financial Services
Serial No. 108-83
U.S. GOVERNMENT PRINTING OFFICE
96-546 WASHINGTON : 2004
____________________________________________________________________________
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HOUSE COMMITTEE ON FINANCIAL SERVICES
MICHAEL G. OXLEY, Ohio, Chairman
JAMES A. LEACH, Iowa BARNEY FRANK, Massachusetts
DOUG BEREUTER, Nebraska PAUL E. KANJORSKI, Pennsylvania
RICHARD H. BAKER, Louisiana MAXINE WATERS, California
SPENCER BACHUS, Alabama CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware LUIS V. GUTIERREZ, Illinois
PETER T. KING, New York NYDIA M. VELAZQUEZ, New York
EDWARD R. ROYCE, California MELVIN L. WATT, North Carolina
FRANK D. LUCAS, Oklahoma GARY L. ACKERMAN, New York
ROBERT W. NEY, Ohio DARLENE HOOLEY, Oregon
SUE W. KELLY, New York, Vice Chair JULIA CARSON, Indiana
RON PAUL, Texas BRAD SHERMAN, California
PAUL E. GILLMOR, Ohio GREGORY W. MEEKS, New York
JIM RYUN, Kansas BARBARA LEE, California
STEVEN C. LaTOURETTE, Ohio JAY INSLEE, Washington
DONALD A. MANZULLO, Illinois DENNIS MOORE, Kansas
WALTER B. JONES, Jr., North MICHAEL E. CAPUANO, Massachusetts
Carolina HAROLD E. FORD, Jr., Tennessee
DOUG OSE, California RUBEN HINOJOSA, Texas
JUDY BIGGERT, Illinois KEN LUCAS, Kentucky
MARK GREEN, Wisconsin JOSEPH CROWLEY, New York
PATRICK J. TOOMEY, Pennsylvania WM. LACY CLAY, Missouri
CHRISTOPHER SHAYS, Connecticut STEVE ISRAEL, New York
JOHN B. SHADEGG, Arizona MIKE ROSS, Arkansas
VITO FOSSELLA, New York CAROLYN McCARTHY, New York
GARY G. MILLER, California JOE BACA, California
MELISSA A. HART, Pennsylvania JIM MATHESON, Utah
SHELLEY MOORE CAPITO, West Virginia STEPHEN F. LYNCH, Massachusetts
PATRICK J. TIBERI, Ohio BRAD MILLER, North Carolina
MARK R. KENNEDY, Minnesota RAHM EMANUEL, Illinois
TOM FEENEY, Florida DAVID SCOTT, Georgia
JEB HENSARLING, Texas ARTUR DAVIS, Alabama
SCOTT GARRETT, New Jersey CHRIS BELL, Texas
TIM MURPHY, Pennsylvania
GINNY BROWN-WAITE, Florida BERNARD SANDERS, Vermont
J. GRESHAM BARRETT, South Carolina
KATHERINE HARRIS, Florida
RICK RENZI, Arizona
Robert U. Foster, III, Staff Director
Subcommittee on Housing and Community Opportunity
ROBERT W. NEY, Ohio, Chairman
MARK GREEN, Wisconsin, Vice MAXINE WATERS, California
Chairman NYDIA M. VELAZQUEZ, New York
DOUG BEREUTER, Nebraska JULIA CARSON, Indiana
RICHARD H. BAKER, Louisiana BARBARA LEE, California
PETER T. KING, New York MICHAEL E. CAPUANO, Massachusetts
WALTER B. JONES, Jr., North BERNARD SANDERS, Vermont
Carolina MELVIN L. WATT, North Carolina
DOUG OSE, California WM. LACY CLAY, Missouri
PATRICK J. TOOMEY, Pennsylvania STEPHEN F. LYNCH, Massachusetts
CHRISTOPHER SHAYS, Connecticut BRAD MILLER, North Carolina
GARY G. MILLER, California DAVID SCOTT, Georgia
MELISSA A. HART, Pennsylvania ARTUR DAVIS, Alabama
PATRICK J. TIBERI, Ohio
KATHERINE HARRIS, Florida
RICK RENZI, Arizona
C O N T E N T S
----------
Page
Hearing held on:
May 3, 2004.................................................. 1
Appendix:
May 3, 2004.................................................. 77
WITNESSES
Monday, May 3, 2004
Gonzalez, Gilbert G. Jr., Acting Under Secretary for Rural
Development, U.S. Department of Agriculture.................... 30
Green, Pattye, Senior Business Manager for Native American
Housing, Fannie Mae............................................ 44
Hatathlie, Freddie, Mortgage Consultant-Emerging Markets, Wells
Fargo Mortgage................................................. 46
Kitcheyen, Kathleen, Chairwoman, San Carlos Apache Tribe......... 10
Konski, Renee, Senior Loan Specialist, American Financial
Resources, Inc................................................. 49
Liu, Hon. Michael, Assistant Secretary for Public and Indian
Housing, U.S. Department of Housing and Urban Development...... 33
Maryboy, Mark, Chairperson, Navajo Nation Council................ 50
Parks, Lawrence H., Senior Vice President, External and
Legislative Affairs, Federal Home Loan Bank of San Francisco... 52
Paul, Kent E., Chief Executive Officer, AMERIND Risk Management
Corporation.................................................... 54
Sabatinos, June, Vice President, Ambulatory Care Services, Tuba
City Regional Health Care Corporation.......................... 57
Shirley, Joe Jr., President, Navajo Nation....................... 15
Smith, Chadwick, Principal Chief, Cherokee Nation of Oklahoma.... 17
Sossaman, Russell, Chairman, National American Indian Housing
Council........................................................ 60
Taylor, Wayne Jr., Chairman, Hopi Tribe.......................... 19
Winfield, Johnny, Vice Chairman, White Mountain Apache Tribe..... 12
APPENDIX
Prepared statements:
Ney, Hon. Robert W........................................... 78
Matheson, Hon. Jim........................................... 80
Renzi, Hon. Rick............................................. 83
Waters, Hon. Maxine.......................................... 84
Gonzalez, Gilbert G. Jr...................................... 86
Green, Pattye................................................ 102
Hatathlie, Freddie........................................... 111
Kitcheyen, Kathleen (with attachments)....................... 115
Konski, Renee................................................ 131
Liu, Hon. Michael............................................ 139
Maryboy, Mark................................................ 147
Parks, Lawrence H............................................ 150
Paul, Kent E................................................. 153
Sabatinos, June.............................................. 164
Shirley, Joe Jr.............................................. 168
Smith, Chadwick.............................................. 174
Sossaman, Russell............................................ 178
Taylor, Wayne Jr............................................. 193
Winfield, Johnny............................................. 199
Additional Material Submitted for the Record
Shirley, Joe Jr.:
Written response to questions from Hon. Rick Renzi........... 208
Arizona Department of Housing, prepared statement................ 213
Cameron Chapter Housing Testimony................................ 217
Indigenous Community Enterprises, prepared statement............. 219
Navajo Partnership for Housing, prepared statement............... 222
Rosebud Sioux Tribe, prepared statement.......................... 236
Salt River Community Housing Division, prepared statement........ 241
Tribally Designated Housing Entities (TDHEs), prepared statement. 253
IMPROVING HOUSING OPPORTUNITIES
FOR NATIVE AMERICANS
----------
Monday, May 3, 2004
U.S. House of Representatives,
Subcommittee on Housing and
Community Opportunity,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to call, at 12:00 p.m., at
the Greyhills Academy High School Auditorium, Tuba City,
Arizona, Hon. Robert W. Ney presiding.
Present: Representatives Renzi and Waters.
Also Present: Representative Matheson.
Chairman Ney. The subcommittee will come to order.
I wanted to explain the process a little bit before we
start and make an opening statement and then we will have other
members make opening statements.
But the Financial Services Committee of the U.S. House is
chaired by Mike Oxley of Ohio, and the ranking member is Barney
Frank of Massachusetts, and we have the Subcommittee on Housing
and Community Opportunity, which is what this subcommittee is
of the U.S. House.
My name is Bob Ney. I'm the chairman of the subcommittee.
I'm from the State of Ohio. We also have our ranking member to
my right, Maxine Waters of California. To my left, everybody
knows Congressman Renzi of Arizona. And I assume that applause
is for all three of us right now. To my extreme right,
Congressman Matheson of Utah. You can applaud for him, too.
This is an official hearing of the U.S. House of
Representatives subcommittee. We have a timer, and we basically
run the timer. It makes a beep, I think. We will give you a
little tap here. That doesn't mean we are going to cut you off
right at that spot in the middle of your sentence, but we keep
it to five minutes of testimony from each witness. And I think
we have 16 witnesses today, so we are going to try to hold it
to five minutes and then the members up here will have five
minutes to ask questions. But, again, if you are in the middle
of your statement, feel free to complete it. But that way, if
we hold you to the five minutes, that will give us time.
And anything you want to submit for the record, we will do
that without objection. And you can submit the rest of your
testimony for the record. So, without objection, all of the
opening statements will be made part of the record of the U.S.
House.
I also wanted to tell you the Subcommittee on Housing last
year--and I want to praise our ranking member, Maxine Waters of
California, and the rest of the members frankly, that couldn't
be here today--we passed approximately 11 housing bills that
actually went on to be signed into law. And that was done, and
I'm very proud of our roll call vote in the subcommittee. It
doesn't mean we didn't have our differences or didn't speak our
peace on things, but the subcommittee, I think, acted on a
bipartisan basis. And I wanted to commend our ranking member,
Maxine Waters, and members of the committee who really tried in
a diligent way to do something about housing. Sixty some
percent of Americans have housing. The minority rate is 50
percent. That is unacceptable, and we have taken some steps,
there are a lot more steps to be taken, so everybody can share
in the American dream.
I do want to tell you how this particular subcommittee
hearing came about. It happened about 2:00 o'clock in the
morning. We were having one of those late night votes, and
Congressman Renzi--I will let him tell you the story when he
makes his own statement, but he came to me and he had seen some
very, very deplorable conditions when it came to housing. The
housing subcommittee also oversees Indian housing, so
Congressman Renzi asked the question of myself, which we said
yes to, and with the cooperation of our ranking member, Maxine
Waters, we are here today along with our colleague, Congressman
Matheson, who is concerned about this issue.
When Congressman Renzi asked for this hearing, we started
to research back--this is Tallman Johnson of our staff, and
also Cindy Chetti is here in the back, and I know Congresswoman
Waters will introduce the staff that's here for the minority.
But we researched back, and there had never been a hearing on
Indian land in the history of the United States by a housing
subcommittee. So this is the first time in the history of the
United States that there is a hearing. I want to thank
Congressman Renzi for making that possible. I guess I could say
it's long overdue.
So it's a historic day for our Subcommittee on Housing and
Community Opportunity, and as chairman, it's my honor to
preside over today's proceedings which, again, is the first
time this subcommittee has ever held in the history of the
United States a hearing on tribal land.
Presently, the Native American population is estimated at
2.5 million. While the national poverty rate is 12 percent, the
rate among Native Americans is more than twice as high. Forty-
five percent of all Native American households are located on
tribal lands, and housing is one of the most pressing issues
for Native Americans living on tribal lands.
Over 32.5 percent of the homes located on tribal lands are
overcrowded; 7.5 percent of the Native American homes lack safe
water or sewage systems; less than 50 percent of the homes on
reservations are connected to public sewer systems, and 16.5
percent of homes on native lands are completely without any
form of indoor plumbing. About 40 percent of tribal homes are
considered substandard compared to a national average of six
percent.
Native Americans today are experiencing chronic housing
affordability problems. Approximately half of the Native
American households in tribal areas pay over 30 percent of
their income for housing expenses compared to the 23 percent of
all U.S. residents who pay more than 30 percent of their income
for their housing expenses. Much of this is due to the unique
relationships, I believe, that Indian tribes have with the U.S.
Government. Native Americans while residing on reservations are
U.S. Citizens, but their tribes are recognized as domestic
sovereign nations with treaty relationships with the U.S.
Government. The fact that the Bureau of Indian Affairs, BIA,
holds much of the land in trust means that tribes are allowed
only limited sovereignty over their lands. This special
relationship limits the types of economic activity for which
Indian lands may be used, and I'm hoping today this hearing
will be the step to try to bridge that so that more things will
be able to happen.
One of the most important cornerstones to a strong
community is homeownership. It creates stability and serves as
a strong economic staple in our overall U.S. economy. While the
national homeownership rate has steadily risen and is at an
all-time high of over 68 percent, there are sectors of the
population for whom homeownership remains unattainable. In
fact, the homeownership rate for Native Americans is well below
50 percent. Clearly, more can and should be done to help all
families realize the dream of owning a home.
The changing land status issues, diversity of tribal laws
and governments, lack of mortgage information and credit issues
all contribute to the challenges in mortgage lending in Indian
country. Developmental programs delivered to Indian lands
should be highly flexible and adaptive to the very unique and
specific circumstances in each tribal setting. Native Americans
must be able to take full advantage of partnerships and
partnering and leveraging efforts across institutions and at
all levels of our government and through all agencies where
it's available. If we begin to succeed at these initiatives,
then opportunities will move into these rural areas.
As we work to help strengthen homeownership opportunities
in Indian country, together we will continue to play a
significant role in improving the quality of life for all
families.
And with that, I will yield to our ranking member, Ms.
Waters.
[The prepared statement of Hon. Robert W. Ney can be found
on page 78 in the appendix.]
Ms. Waters. Thank you very much, Mr. Chairman.
I would first like to thank you for responding to
Congressman Renzi and Congressman Matheson, recognizing the
need for such a hearing and getting it done. I have enjoyed
working with you. I think that you have shown your concern for
poor people and people of color and others who do not enjoy
homeownership to the same degree that our majority of the
population enjoys, and I'm very pleased that I have an
opportunity to participate in this hearing today.
I'm very pleased to be here in Tuba City to participate in
the first hearing on Native American housing issues ever held
on Navajo land. And, again, Mr. Chairman, it's because of you
and Congressman Renzi and Congress Matheson that we are here. I
would like to thank both of our staffs for the wonderful work
that has been done in putting this visit together.
The tour that we were on this morning was awfully
revealing, and I wish every member of Congress could see what
we saw today. A special thanks to our staffers, Jeff Riley, who
is our counsel; and Jaime Alisiga, who is our parliamentarian,
along with the other staff members and all who have helped to
work to put this tour together and this hearing together.
I am very concerned about the many barriers that Native
Americans face when they seek to pursue homeownership. Whether
it stems from Native American poverty or the heavy hand of
bureaucracy at the Bureau of Indian Affairs when prospective
homeowners seek BIA approvals, we cannot accept a process that
produces so many fewer opportunities for Native Americans to
own their homes and thereby build wealth than for others who
live in America.
While I know that you sought the BIA's appearance at this
hearing, Mr. Chairman, I'm disappointed that the Bureau of
Indian Affairs is not represented on one of the panels today.
This government agency, more than any other, needs to step up
to the plate and work together with the tribes, HUD, RHS and
the secondary market to formulate solutions to the housing
problem on Native American lands.
While I am glad that we are discussing the significant
housing challenges faced by Native Americans, I'm hopeful that
we can all work together, the Congress, the administration, can
work together to increase appropriations for assistive housing
programs. And we all, I think, because of what we are learning,
can take another look at any proposed budget cuts for the year
2005. I just think that the more we know, the less we can
accept budget cuts.
I look forward to the insights of our witnesses, especially
our tribal witnesses, as to how we can develop solutions that
meet your needs for housing and homeownership opportunity while
respecting your culture and your sovereignty.
Mr. Chairman, when land was taken from Native American
tribes, the United States gave its solemn promise to protect
the rights of the tribes to govern themselves and to provide
for the health, education, and well-being of tribes. That
commitment, the trust responsibility, is not a handout but a
contract, a contract that unfortunately has been broken time
and time again by our own government.
I believe that an essential element of the federal
government's trust responsibility is that it must take the
steps necessary to make homeownership opportunities as
available to the members of tribes as they are to the rest of
America's population. With a Native American homeownership rate
of only about 33 percent as compared to an overall
homeownership rate approaching somewhere around 68 percent,
it's clear that much work will need to be done.
The Native American population is one of the fastest
growing groups in the United States. Unfortunately, it is also
one of the poorest segments. According to the U.S. Census
Current Population Survey, the poverty rate of Native Americans
in the late 1990s was about 26 percent while the national
average was 12 percent. By any calculation, the increases in
population are creating housing needs which continue to far
outpace the funding that we are providing.
While land and home are viewed as central to family life in
the Navajo culture, the housing problems of the Navajo Nation
are nonetheless particularly severe. The Navajo Nation is the
largest reservation in the country. It covers over 16 million
acres in three states. It is the size of West Virginia. There
are 255,543 enrolled members of the tribe with about 180,000
living on tribal land. The median age, we understand, is about
22.5 years.
According to the 2000-2001 Comprehensive Economic
Development Strategy Report from the Native Nation Office on
Economic Development, 56.1 percent of Navajo people live below
the poverty level, the per capital income is only about $6,212,
and the unemployment rate is about 43.65 percent. Some 31
percent of the homes on the reservation lack complete plumbing,
60 percent lack telephone service, and about one-fifth of
owner-occupied units on the reservation are mobile homes. The
development of housing on the Navajo Nation is even more
complicated than it is on other reservations, as 94 percent of
Navajo land is tribal trust land, the most difficult type of
land to develop.
Mr. Chairman, strong communities are built one home at a
time. To strengthen reservation communities, we must provide
safe, decent, affordable housing for all families living in
them. Today, approximately 40 percent of all reservation
housing is inadequate. Twenty percent do not have plumbing.
Mr. Chairman, the unmet housing needs in Indian country are
simply enormous. HUD at one point estimated that current
NAHASDA funding levels would only meet five percent of Native
Americans' needs for housing. Without going much further, when
we talk about NAHASDA funding or some of the proposed cuts,
because of what we know and what we are learning, I think we
are going to have to all work together to review any proposed
cuts and, again, get the administration together with the
Congress of the United States and do the right thing, just do
what we need to do.
In closing, let me say to Congressman Renzi that your
guidance on the tour this morning was absolutely fascinating
and certainly appreciated. You know your district and you
certainly understand these concerns, and I'm very appreciative
for the time that you took to put this meeting together and the
statistics, this data, that was gathered for me by my staff. I
want to thank you, and Congressman Matheson, I want to thank
you for working together with us. Mr. Renzi as you address
these very complicated and tremendous problems that you're
confronted with.
Thank you very much, Mr. Chairman.
[The prepared statement of Hon. Maxine Waters can be found
on page 84 in the appendix.]
Chairman Ney. Thank you.
I also want to note, I, too, am disappointed the BIA is not
here, and we will talk at a follow-up hearing, also. Since this
is the first-ever hearing, I would prefer they be here on
Indian tribal land, but we will follow up with them, also, in
Washington.
The gentleman from Arizona, Mr. Renzi.
Mr. Renzi. Thank you very much.
Let me begin by thanking Chairman Ney, Ranking Member
Waters, and our neighbor to the north, Congressman Matheson of
Utah, for traveling this far, for taking the time. I also want
to recognize the leaders of the Coconino County board of
directors. Deb Hill is here. We have council delegates from the
Navajo Nation, from the Apache Nation, from the Hopi Nation,
our leaders, our chairmen, our presidents are here, which we
will introduce them a little bit later. I thank all of you for
finally coming together and helping me and working with us to
pull off this field hearing which, as we have heard, is
historic. It's long overdue.
I represent more Native Americans than anyone else in
Congress. I've told President Shirley on many occasions it's
hard for me to go home to Washington, to go home to my ranch,
and call myself a congressman after I've been to Kaibito and
seen the deplorable conditions up there. The first time I went
up there, I saw six children living in a mud hut with their
grandmother raising them, and they had dysentery. And, so, to
be able to sit with myself and look at myself in my own mirror,
I have to--and be a representative, I'm so very thankful for
Chairman Ney who, when I went back to Washington after seeing
that, on the floor at 2:00 o'clock in the morning, he committed
that he would come out here and have this hearing this morning.
So, Chairman Ney, thank you for coming all the way out from
Ohio and bringing a full-blown Congressional hearing to the
Navajo Nation to address this issue. My district is over 60,000
square miles, larger than the State of Illinois. Our Speaker of
the House is from Illinois, and I have a tendency to tell him
my district is bigger than your State, I need more money, I
need more help.
And it's my privilege to represent the Navajo. There are
Hopi members within this district, the Zuni, the San Juan
Paiute, the Tonto Apache, Yavapai Prescott tribe, the San
Carlos and White Mountain Apache tribe. Strong, wonderful
people who give and serve this nation and who deserve the very
best, and they deserve our government to meet their treaty
obligations. This is why we are here today.
Home ownership in America is many times referred to as an
American dream, but how much of a reality is that dream here on
native--in Indian country? We are learning that homeownership
has a beneficial effect. Obviously, it helps marriages;
obviously, it helps reduce crimes and helps with law
enforcement in communities. But have you ever heard that there
are studies that now show that math achievement and reading
recognition scores are seven percent higher among young
children and graduation rates are 13 percent higher among
families who own their own home? Who would have thought that
the fruits of homeownership actually go all the way down to
test scores.
In addition, families can build equity in their homes. It
allows them to borrow against the equity to get their kids to
go to college, to be able to borrow against their homes and
form their own small businesses. I'm able to become a U.S.
Congressman because I borrowed a second mortgage on a home in
Sierra Vista, Arizona, built a little insurance agency and then
was able to go to law school and then run for Congress. And
yet, unfortunately, homeownership among Native American
families is less than one-third. So one out of three Native
American families actually own their own home.
And as we saw today, and as Ranking Member Waters pointed
out, we saw children living in nothing more than wooden shacks
without electricity, without modern sanitation and without pure
water. We met a woman today whose water well is contaminated by
oil. And so these are chronic problems where health officials
are recognizing that these conditions are contributing to
physical and mental defects in our children, and in particular
in these areas.
In the first district of Arizona, we also have the problem
with the Bennett Freeze. This is an area of 1.3 million acres
in size which, due to conflicting claims, the federal
government in 1966 imposed a ban on further construction. We
have seriously never addressed the adverse conditions which are
imposed by this wrong policy.
Now, I've got to give it to Chairman Taylor and the
Honorable President Joe Shirley, because these two people are
working together to seriously address the issue of the Bennett
Freeze and we are coming very close to an agreement and a
compact.
Finally, it is my hope that this first hearing will not
only shed light on the issue, but out of it will come direct
objectives and missions. We will have results, not just words,
to talk about. I am going to follow up with a workshop. I'm
going to ask Chairwoman Kathy Kitcheyen of the San Carlos
Apache to host it. We will have a workshop. We will bring in
private industry, the banking, financing, the credit people
will come in and begin to address the ideas of how this first
generation of Native American people can break through the
impediments to homeownership, whether it be putting more
counselors on the Navajo or the Hopi or the Apache Nations, so
that the young people can enjoy homeownership, so the
application process itself doesn't become a wall or an
impediment to homeownership. So I'm looking forward to
following up and asking your leadership with that workshop.
Mr. Chairman, if I have your permission, I would like to
introduce a guest that we have. With us today is Mr. Eddie Cody
of the Navajo Nation. He is a recent recipient of USDA home
repair funds. Mr. Cody needed an addition to his home and we
were able to help him through the USDA 504 Home Ownership
Repair Program.
One of the things that's so important, real quick, about
these programs is the Navajo people, the Hopi people, the
Apache people don't want to send their elders down to Phoenix
to nursing homes. And having the ability to add on additions to
their homes allows them to bring the elders in for respite care
and elder care in their homes rather than shipping them off to
a nursing home. With this kind of a program we are able to fund
additions onto the homes and reach out to our elders in our
community.
So, with that, I want to thank the people of northern
Arizona, particularly those who have taken their time away from
their families to come here today.
Mr. Chairman, I yield back. Thank you.
Is Mr. Cody with us in the audience? Mr. Cody, thank you.
[The prepared statement of Hon. Rick Renzi can be found on
page 83 in the appendix.]
Chairman Ney. Thank you.
Congressman Matheson from Utah, who borders the entire
state of Arizona, and who spent time with Congressman Renzi
today sharing their concern, and also some of the groups.
Obviously, that border between the two states doesn't exist
when it comes to Indian affairs.
Mr. Matheson. Thank you very much, Mr. Chairman. Thanks for
holding this hearing. I want to extend my thanks to you. I'm
also really glad to join you and Ranking Member Waters and
Congressman Renzi today.
This hearing is, as Congressman Renzi suggested, probably
long overdue and I'm pleased we're here. Thank you for your
leadership in making this happen. I really look forward to
hearing testimony today from this distinguished group of
witnesses.
I would especially like to, before I start with my
statement, welcome my constituent, Mr. Mark Maryboy, delegate
from Utah on the Navajo Nation Council. I believe we will hear
from him on the third panel.
Many Native Americans continue to live in appalling housing
conditions, and this is taking place at the same time while
much of our nation is improving in this regard. Now, the Senate
Committee on Indian Affairs has released a report that shows
American Indian and Alaska Native populations live in housing
that is often and justifiably compared to third world nations.
One out of every five Indian homes lacks complete plumbing
facilities and over 90,000 American Indians and Alaska Natives
are homeless or underhoused.
I have had the opportunity to see firsthand the need for
housing in Indian country when I visited the Utah portion of
the Navajo Nation, which I represent in Congress, and also the
tour we took this morning through parts of Arizona. I have met
with families and individuals who have expressed their
frustration with the process of building and owning a home on
tribal lands. My constituents have raised a number of
challenges to homeownership, including duplicative tribal and
federal bureaucracy of obtaining homesite lease, trust status
of tribal lands, lack of basic electrical and water delivery
systems, lack of roads, lack of federal funding, and the
difficulties these individuals face in trying to obtain
conventional mortgages.
During my time on the Navajo Nation, I have had the
opportunity to become acquainted with one particular grassroots
non-profit organization, Indigenous Community Enterprises. I
have seen their approach to addressing the housing needs of the
often-forgotten Navajo elders. Utilizing a NAHASDA subgrant and
local resources, including, in the case of one I visited in
Utah, the Monument Valley High School vocational students and
Utah Navajo Trust Fund financial support, ICE constructed an
elder hogan home that will be traditionally blessed this
Friday, May 7th. The ICE elder hogan home incorporates the
traditional octagon hogan in its design. The design respects
the traditional space but adds the basic amenities of a modern
kitchen and bathroom.
ICE employs a community-based approach of personal
responsibility and capacity building to build hogan homes.
Collaborating with local high schools, Navajo Nation entities,
banks and community and family members, ICE seeks to address
the underlying problems to homeownership on the Navajo
reservation by not only construction of a hogan home but by
offering financial literacy, Individual Development Account
savings programs, homeownership skills and credit counseling.
Additionally, ICE uses small diameter timber from the regional
forest thinning and is moving towards using straw bale products
that can be manufactured from the Navajo Agriculture Products
Industry.
Innovative ways to provide homes, the use of local
resources, and ensuring that individuals have the necessary
financial knowledge and skills can make homeownership a reality
in Indian country. We can no longer look toward any government
to simply provide homes. It will require innovative,
collaborative efforts such as this to address the housing needs
that I witnessed on the Navajo Nation. It will also require a
deeper understanding of all parties involved of the true
obstacles to adequate housing, be they a lack of
infrastructure, supply, mortgage products, or incentives to
build.
Again, Mr. Chairman, thank you for holding this important
hearing today. I look forward to hearing from each panel to
better my understanding of the issues that the federal
government, tribal governments, housing entities and financial
institutions face in addressing the housing shortage in Indian
country. I look forward to hearing their recommendations for
improving housing opportunities for Native Americans and I look
forward to working with my colleagues to implement any
necessary legislative solutions. Thank you very much.
[The prepared statement of Hon. Jim Matheson can be found
on page 80 in the appendix.]
Chairman Ney. Thank you. I want to thank all the members
for their testimony. And as far as the panel of witnesses,
without objection, their written statements will be made part
of the record and their five minutes will begin.
Let me introduce the panel and then we will get right to
the testimony. First member of the panel is Kathy Kitcheyen,
and she is the chairwoman of the San Carlos Apache. The San
Carlos Apache Indian reservation encompasses more than 1.8
million acres in southeastern Arizona. Welcome.
Dallas Massey, Sr., the tribal chairman of the White
Mountain Apache Tribe. Its 12,000 members reside on 1.6 million
acres of its ancestral homeland on the Fort Apache Indian
reservation about 200 miles northeast of Phoenix. Welcome to
you.
And Joe Shirley, Jr. is the sixth President of the Navajo
Nation. The nation has approximately 225,000 members and a land
base of 7.5 million acres across New Mexico, Arizona and Utah.
Welcome, President Shirley.
And Chief Chadwick Smith is the principal Chief of the
Cherokee Nation of Oklahoma, based in Tahlequah. Am I close.
Mr. Smith. Close. Tahlequah.
Chairman Ney. Tahlequah, Oklahoma. Welcome, Chief.
And Wayne Taylor, Jr. Is the chairman of the Hopi Tribe.
The Hopi reservation covers 1.5 million acres in northeastern
Arizona and is bound on all sides by the Navajo reservation.
Welcome, Chairman Taylor.
We will start with Chairwoman Kitcheyen.
STATEMENT OF KATHLEEN KITCHEYEN, CHAIRWOMAN, SAN CARLOS APACHE
Ms. Kitcheyen. Good afternoon, Chairman Ney, Ranking Member
Waters. You better reset that because I think I lost 30
seconds.
Chairman Ney. That's right. You speak up.
Ms. Kitcheyen. Good afternoon, Mr. Ney, Chairman; Miss
Waters, Ranking Member; Mr. Matheson from Utah, and also our
very own Rick Renzi, who has a very passion about his work. And
we thank you for coming and being able to organize this, Mr.
Renzi. Thank you very much.
As you've just heard, my name is Kathy Kitcheyen. I'm the
chairwoman of the San Carlos Apache Tribe based in San Carlos,
Arizona. I am very honored to be here to testify today.
As you've already mentioned, it's an historic occasion.
It's been a long time coming. We have been dealing with the
United States government for over 500 years and never have we
seen people of your caliber come out to our part of the
country.
So I thank you very much for your compassion, for your
humility, and for your courage. Thank you. Today, I am joined
by Robert Olivar, who is on the council and is the chairman of
our housing authority. And also there is a delegation, Ronald
Boni, who is executive director of housing; Opal Kees, staff
person; Chuck Hills, staff person; and also Debbie Ho as well.
Also in the--well, before I begin, again, I would like to
thank you for addressing the needs of housing in Indian
country. What you saw today is probably what you see on other
Indian reservations as well. We appreciate the dedication that
you have to this serious issue. I'm sure it's not easy being
far away from Washington D.C. And all the Starbucks.
To better understand the housing needs of my tribe, it is
helpful to know our history. The aboriginal territory of the
Apache Nation included the western part of Texas, Arizona, New
Mexico, and the country of Mexico as well. Pursuant to the
Treaty of Santa Fe of 1852, lands were set aside for a
permanent Apache tribal homeland and the United States promised
to provide for the humane needs of the Apache people.
The San Carlos reservation was established in 1871. Through
the concentration policies of the United States, various bands
of the Apaches were forcibly moved to the San Carlos
reservation. Throughout history, the United States diminished
the size of the reservation several times due to the discovery
of silver, copper, coal, and water. The reservation now spans
three Arizona counties: Gila, Graham and Pinal. The reservation
currently has a land base of 1.8 million acres. It's mostly
rural and lacks basic infrastructure in many parts. The total
population is 12,532 members.
A majority of our members live on the reservation, 84
percent of them. While we have worked hard to develop our
reservation economy, there is still a high unemployment rate of
76 percent. We suffer from a poverty level of 77 percent. The
tribe has designated the housing authority to operate and
administer the tribe's housing program. We have two critical
housing needs, a severe housing shortage and severely
inadequate utility infrastructure. These inadequacies create
unsafe and unsanitary conditions.
This situation is simply unacceptable in this great country
of ours. Let me be clear that the San Carlos Apache Tribe
supports our troops in Iraq and other parts of the world. The
Apaches have many decorated war veterans that have served with
distinction. In fact, the San Carlos Housing Authority has an
employee named Percy Via, an army reservist, who has worked for
them for 20 years. He was called to duty and was part of the
first wave of army soldiers to invade Iraq. He just returned
home three weeks ago, and we are very proud of him.
However, I wonder about some of the priorities of the
United States when Indian communities, my community, the San
Carlos Apache reservation, was never built the way it should
have been, when our needs were never addressed the way it
should have been; why we have overcrowded conditions when there
are people, disabled people, living without the proper ramp,
without proper facilities in the bathroom.
When I hear about the billions of dollars the United States
is spending to rebuild Iraq, homes and infrastructures for
them, I wonder why the United States will help them but put the
issues of the first Americans aside. I cannot stress enough the
dire housing shortage on the reservation. There are
approximately 2,400 families on the reservation in need of
homes. Thirty-nine percent of families live in substandard
housing and 40 percent of families live in overcrowded
conditions.
We have calculated that it would take building 125 homes a
year for ten years to meet the housing needs of tribal members.
Also, 94 percent of our families are considered low income. Mr.
Olivar, the chairman of our housing board, recently stated that
he receives at least six visits a day from families who have no
place to go and are in desperate need of housing. It is
heartbreaking to tell these families that the waiting list is
too long and that there are no homes for them. I know other
council members meet with families with the same plights as
often as Mr. Olivar. I have a couple pictures over here to my
right that depict a couple of the homes on the reservation, and
there are many more like them.
One area that needs improvement is the environmental review
process required for HUD's Indian Housing Block Grants. The
tribe is frustrated with the long amount of time that it takes
for HUD to approve these environmental reviews. The tribe
submitted environmental reviews for two of its housing projects
over a year ago and there has been no action taken by HUD. As
discussed above, we have tribal members who are homeless or in
need of serious rehabilitation. These delays, therefore, take a
huge and sometimes irreversible toll on our people. We
recommend that HUD be given more resources to handle the huge
loads and we also recommend that HUD streamline and expedite
the process.
And tied to our housing needs are our utility
infrastructure. The tribe's utility infrastructure is sorely
inadequate. Without improved infrastructure, it will be
difficult to provide decent housing. Specifically, our sewage
treatment systems are in such bad shape that they are causing a
health risk to nearby communities as well. The hydraulic
capacity of our existing sewage treatment facilities have been
exceeded by approximately 16 percent. Due to the lack of funds,
the existing sewer ponds are filling with too much sludge and
the berms have been deteriorated.
In an attempt to address our sewage system problems, the
tribe did seek funding from USDA's Rural Housing Service a few
years ago. However, the Rural Housing Service did not have
enough funding to allow us to fix our sewage system problems.
The tribe's current water storage facilities are also
inadequate. The storage tanks are too small and do not meet the
tribe's demand by 24 percent. In order to provide and build
more homes, adequate storage and distribution systems need to
be installed. Unfortunately, the tribe does not have the
funding to upgrade or build the required systems to meet
demands. We would certainly appreciate your assistance on these
matters.
As a final point, I was in attendance at the signing of an
executive order by President Bush related to Indian education
of the No Child Left Behind Act last week. Rod Page, Secretary
of Education, and Gale Norton, Secretary of Interior, are to
spearhead the interagency Indian Education Groups.
The simple fact is that if our children are to be
successful, they need adequate housing. And with that, I rest
my case. Thank you for the opportunity to testify, and please
come again.
Chairman Ney. Thank you very much. I appreciate your
testimony.
[The prepared statement of Kathleen Kitchen can be found on
page 115 in the appendix.]
Chairman Ney. And next, I introduced him as Chairman
Massey, but actually Vice Chairman, Johnny Winfield, filling in
for Chairman Massey.
STATEMENT OF JOHNNY WINFIELD, VICE CHAIRMAN, WHITE MOUNTAIN
APACHE TRIBE; ACCOMPANIED BY ANEVA YAZZIE, MANAGEMENT
CONSULTANT, WHITE MOUNTAIN APACHE HOUSING AUTHORITY
Mr. Winfield. Good afternoon. My name is Johnny Winfield. I
represent the White Mountain Apache Tribe as the vice chairman.
I would like to welcome each and every one of you, the
Subcommittee on Housing and Community Development, to the
Navajo Nation within the State of Arizona within Indian
country.
I'm here on behalf of the White Mountain tribal chairman,
Dallas Massey, who is unable to make it due to other
commitment, so I'm going to follow through with what he brought
to my attention.
We are knowledgeable of new housing legislation, NAHASDA,
that was enacted in 1996. Under that new federal housing
program for Native Americans, we had designated our housing
authority, the White Mountain Apache Tribal Authority, as a
Tribal Designated Housing Entity and we have been very
successful in carrying out our effort of housing opportunity
for our tribal members. I believe we are at the forefront of
tribes across the country to take full advantage of leveraging
opportunity with willing financial partners that have opened
under this new Indian housing law.
We have accomplished a lot of first ever initiatives, such
as:
One, issuing a tax exempt bond in the amount of $25 million
to build 250 homes, which has increased to 317 due to a cost
savings measure in our construction method. This bond issuance
was only possible through the collateralization of HUD's
Section 184 loan program on each of the construction mortgage
loans executed with our lending institution, Bank One. We call
this lending purchase mortgage-based homeownership program
Apache Dawn.
Two, since the creation of this housing authority back in
1963, for the first time under the Apache Dawn, we used our own
tribal resource for material, Fort Apache Timber Company, Fort
Apache Timber Company Home Center, White Mountain Apache Tribe
Public Works and contractors utilizing our tribal employees in
significant numbers for the construction of homes.
Item three, we were also the first tribe in Arizona to
receive a low interest loan to address our infrastructure needs
from the Arizona Water Infrastructure Financial Authority,
WIFA, in the amount of $5 million. This was a true tri-
governmental relationship between our tribes, state and federal
agencies. WIFA had to qualify as an approved lender under HUD's
Title VI Loan Guarantee Program in order to minimize this risk
and make the loan possible for our tribe.
Since the creation of the housing department under the
State of Arizona by our own good friend, Janet Napolitano, who
is the first governor who has shown a true concern and is
proactive in addressing our tribal housing situation in the
State of Arizona, we were the first tribe to partner with their
office in addressing our badly needed rehab needs for our
housing units through both their tax credit and state housing
fund programs. We are fortunate to have a very strong state
government relationship in all our housing endeavors.
In addition to these first ever initiatives, the White
Mountain Apache Housing Authority has aggressively applied for
HUD and other outside grant sources that have enabled a total
of over $80 million to be infused into our tribal communities
since 1998. This is--this has proved that the new Indian
housing law can work for tribes with a capable and committed
team on the housing staff, expert consultants combined with
strong tribal and community support.
We have also received strong support from both our local
and national HUD office. As stated above, we have had a very
successful relationship with Phoenix, Denver, and headquarter
administration of the Native American Housing Program. The new
Indian housing law allows the opportunity to work with other
funding agencies to address rehab and/or new construction
needs, including costly offsite infrastructure systems.
In working with other agencies, we have encountered several
obstacles in our attempt to increase the assistance needed for
our tribal members. This includes:
One, partnership with the Federal Home Loan Bank's
Affordable Housing Program. We have encountered several program
differences for delivery assistance to Native American
communities. This includes the unique need to address the trust
land issue in the execution of regulatory agreements, the low
income threshold requirement under the NAHASDA, unique BIA land
issues, and risk issues for future banking relationships.
In partner with the U.S. Department of Health and Human
Service's Indian Health Service technical arm, we have
encountered one major regulatory prohibition that hinders
assistance for tribal members. The tribes are prohibited from
obtaining assistance for homes if the homes are receiving
assistance from HUD. Since the resources for funding are both
federal assistance, IHS statute and program regulation
restrictions should be removed to allow its use in a
coordinating manner at the local level or reallocate such funds
to a national level from IHS to HUD to address infrastructure
needs from one federal funding source.
Even through this is a sensitive issue to those tribes that
are not obligated to their funds in a timely fashion and
possible to be subject to recapture the funds and returned to
the U.S. Treasury; rather, a mechanized need to be put in place
to reallocate those funds to tribes that have proven track
record of effective address of their homes need to be timely
manner. While this may not be uniformly addressed, each tribe's
respective needs it will be addressed in the overall backlog
housing needs for the tribes in aggregate from the
Congressional point of view and all funding would still be
directed at the address of the vast problem rather than
returning to the general fund back to the Treasury, not
addressing the housing problem.
A means of stable employment is necessary for tribal
members in order to make housing payables. This leads to the
need for the economic development for sustaining tribal
communities and to become truly self-determined. Therefore, the
program regulations should be able to allow economic
development as an eligible activity as it relates to affordable
homes.
This should not be considered an exhaustive list but are
those that we have seen as obstacles and as experienced by the
White Mountain Apache Tribal Housing Authority that needs
immediate attention by responsible federal officials for the
sake of all tribes. We stand ready to address and work
cooperatively towards working solutions to enable all tribes to
better address and solve their housing need.
We have used the USDA Agriculture Rural Development Program
to receive combination grant and loan funding to address our
infrastructure needs. These funds are supplemental to NAHASDA
and WIFA funds as described above to provide the construction
of regional water and wastewater treatment facility at Hondah.
This is greatly increasing in capacity, accommodating the
planned expanding of our homes at Hondah home sites and Apache
Dawn home funding under NAHASDA. The White Mountain Apache
Tribal Housing Authority also plans to utilize the USDA's Rural
Housing Service, rural development housing service in the near
future to expand the home assistance serving our tribe.
All of our land is trust land. With the assistance of the
federal loan guaranteed programs offered under HUD Section 184,
Title VI provide NAHASDA, we are able to bridge the housing
need for both subsidized and mortgage-based programs with
approval of BIA land leases for two consecutive period of 25
years for our tribal members. The maximum lease period of 50
years specified in the NAHASDA statute needs to be changed to
allow for even longer period of time.
Steps that can be taken to increase private market
initiative is to maintain and to increase the level of federal
loan authority under the two HUD loan grant guarantee programs
that have worked successfully for our tribe, namely the Section
184, Title VI program. Eligibility criteria should also be
expanded to fill the pocket of needs of those families that are
not low income which is a growing segment of the tribal
population and cannot secure mortgage financing on trust land
without some form of many federal loan guarantee. Education----
Chairman Ney. I'm sorry. Not to interrupt you, but time has
expired.
Mr. Winfield. Thank you.
Chairman Ney. Wrap it up.
Mr. Winfield. Wrap it up?
Chairman Ney. Yes.
Mr. Winfield. Education about these programs should also
continue to both tribes and the private financial sector on how
these programs work. Heavy education should also be continued
for Native American on benefits of true homeownership as well
as financial literate education. And this is the statement that
was brought to my attention from the tribal chairman. Thank you
very much.
Chairman Ney. Thank you. We will have the rest of it in the
record.
[The prepared statement of Johnny Winfield can be found on
page 199 in the appendix.]
Chairman Ney. Again, I'm just trying to hold it to five
minutes so we can get some questions in. Thank you. President
Shirley.
STATEMENT OF JOE SHIRLEY, JR., PRESIDENT, NAVAJO NATION
ACCOMPANIED BY CHESTER CARL, CHIEF EXECUTIVE OFFICER, NAVAJO
HOUSING AUTHORITY
Mr. Shirley. Thank you, Mr. Chairman, members of the
committee.
I feel very honored to share your presence with us here on
Navajo land and I want to welcome you. And thank you,
Congressman Renzi, for doing everything you could to make this
hearing possible. You have done much and I'm looking forward to
continue to work with you.
Mr. Renzi. Thank you, Mr. President.
Mr. Shirley. With me here today is Chester Carl, who will
help answer questions maybe afterwards.
Gentlemen, Ms. Waters, I'm Joe Shirley, Jr., President of
the Navajo Nation. There are a myriad of challenges facing us
related to housing, related to Navajos, sovereign Native
Americans, but I want to zero in on a particular issue at this
time because of the limited time and will share the rest with
you in written testimony.
The Navajo Nation and the Navajo Housing Authority are
deeply concerned that a recent HUD decision will reduce Indian
Housing Block Grants for the Navajo Housing Authority by over
$5 million. HUD's policy determination, made without consulting
with Indian tribes as mandated by federal law, subverts the
letter, intent and spirit of NAHASDA and will prevent the
Navajo Nation and many other tribal governments on Indian
reservations throughout the country from serving the critical
housing needs of our people.
These drastic reductions are caused by HUD's decision to
use for the first time the so-called multi-race census data in
the Indian Housing Block Grant formula. As you know, the 2000
census allowed those responding to questions on race and
ethnicity to check one or more of the listed race categories.
In 1990, when only a single race category could be selected,
almost two million people checked the American Indian and
Alaskan Native category. Yet, in 2000, over four million
identified themselves either as American Indian and Alaskan
Native alone or as American Indian and Alaskan Native in
combination with one or more other races. This amounts to an
incredible 110 percent American Indian and Alaskan Native
population growth rate compared to the U.S. Population growth
rate of only 13 percent.
In 2000, those who identified themselves as American Indian
and Alaskan Native alone was 2.5 million, a figure much more
realistic and closer to the population growth rate nationally.
Moreover, studies have shown that a substantial majority of
those who indicated they are American Indian and Alaskan Native
and another race would have selected a non-American Indian and
Alaskan Native race if they had been asked to designate only
one category. Yet, despite the fact that American Indian and
Alaskan Native alone data more accurately reflects the true
Indian population under the NAHASDA definition of Indian as any
person who is a member of an Indian tribe, HUD has nevertheless
mandated the use of the multi-race data in the Indian Housing
Block Grants formula.
When the multi-race data is plugged into that formula,
large sums of housing funds are shifted away from areas with
populations that self-identify as American Indian and Alaskan
Native alone, which tend to be reservation lands, to areas of
populations that self-identified as American Indian and Alaskan
Native in combination with other races, which tend to be more
urbanized, non-reservation areas.
Although Congress intended NAHASDA to help tribes and their
members improve their housing ambitions and socioeconomic
status, HUD's decision disregards the bedrock principle of
self-determination and self-governance of the tribe's rights to
determine its members.
HUD's own preliminary estimates using multi-race data
reveal that with a reduction of over $5 million, the Navajo
Nation will suffer the largest single cuts in funding, vital
funds that will be taken away from Navajo families desperately
in need of basic housing.
Other tribes located right here in Arizona will also face
severe reductions. For example, the Tohono O'Odham tribe will
lose upwards of $743 million, an 11 percent reduction. The Hopi
tribe will lose over $613 million, a 17 percent reduction. The
Salt River Pima will lose over $738 million, a 24 percent
reduction. And the Chochiti will lose $111,820, a 35 percent
reduction.
Congress must not allow this untenable and unfair result to
stand. We respectfully request that HUD use tribal enrollment
figures as the best indication of who are Indian under, and
entitled to the benefits of, NAHASDA or, in the alternative,
use the 2000 Census American Indian and Alaskan Native alone
count as most compliant within the NAHASDA definition of Indian
and most reflective of NAHASDA's intents and purposes.
I might just add also that we are trying our best, Chairman
Ney, to defrost the Bennett Freeze. I think you've seen a
couple houses in that area, and it's very undeveloped. We had
to go through a lot of red tape and bureaucracy to get in any
infrastructure. Hopefully, in the near future, we will overcome
that. And if we do that, we will need all the help we can get
putting in infrastructure and housing and the like. Thank you
very much.
Chairman Ney. Thank you, President Shirley.
[The prepared statement of Joe Shirley Jr. can be found on
page 168 in the appendix.]
Chairman Ney. We will move on to Chief Smith.
STATEMENT OF CHADWICK SMITH, PRINCIPAL CHIEF, CHEROKEE NATION
OF OKLAHOMA
Mr. Smith. Good afternoon, Chairman, and honorable members
of the committee. My name is Chad Smith, and I am the principal
chief of the Cherokee Nation. We are located in eastern
Oklahoma.
One of the highlights of being principal chief is being
able to visit a remote location hidden in the hills of eastern
Oklahoma. Even before you are able to see what is happening,
you can hear hammering, sawing and humming of generators, all
interspersed with the sound of the Cherokee language. You hear
the laughter of children playing in the nearby woods. These are
sounds of a house being built in a Cherokee community by a
Cherokee community.
This is a pilot project. Houses are being built with
materials purchased by Cherokee Nation funds using NAHASDA.
Community members provide the labor. Instruction and
supervision is provided by the Cherokee Nation through USDA
funds as well as tribal funds. A flexible, stable funding
source such as NAHASDA allows the Cherokee Nation to determine
what works best for our members. It is very important to put
our common members in a situation where they can rebuild their
communities, acquire new capacities and expand their
capabilities to help themselves.
The leadership of the Cherokee Nation can, quote, make
ourselves useful, by thinking strategically about how to use
our resources in a manner that enhances opportunities for
tribal citizens to help themselves. By thinking in a broader
context, the Cherokee Nation seeks to build people, not just
physical structures.
Let me share with you one example. One of our self-help
participants is a full blood Cherokee in his mid 40s who has
caught chickens at a processing plant all of his life. This is
back-breaking work that is demanding and often physically
debilitating through the years. This man often puts eight to
ten hours of work in each day catching chickens, then he helps
build houses in Cherokee communities for four to six hours on
the same day. He just learned how to use a tape measure and
thinks he may want to build houses for a living. He wants to
volunteer to assist and to teach other Cherokees what he has
learned.
The Cherokee Nation would like to see more instances of
this to make our limited funding go further and create an
epidemic of this type of excitement and activity and self-help.
The Cherokee Nation has used NAHASDA in many other
strategic ways to promote capacity building and housing
opportunities. We fund Individual Development Accounts, or
IDAs, that require matching the private savings of individuals
dollar for dollar. We also provide materials only projects for
low income individuals who need to rehabilitate their
privately-owned house. We have trained and certified staff to
eliminate lead-based hazards, lead-based paint hazards in the
housing of low income Indians. We are utilizing a Rural Housing
and Economic Development grant to establish a structural
insulated panel, or SIT panel, manufacturing facility. All
these initiatives and others will allow the Cherokee Nation to
house more of the neediest.
The Cherokee Nation has leveraged several resources, such
as the Low Income Housing Tax Credit, to build several projects
and we are the single largest user of the loan guarantees under
Title VI of NAHASDA. We plan to aggressively market not only
Section 184 loan guarantees, but also USDA's 502 program to our
citizens.
There are some issues that, if resolved, would better
enable the Cherokee Nation to strategically address the housing
needs of our members. These issues include improving or
coordinating processes to allocate Indian Health Service
Sanitation Facilities Construction funding; standardizing the
environmental, or NEPA, process across federal agencies, and
streamlining the residential leasing procedures through the
Bureau of Indian Affairs. Stable, consistent funding and
processes would allow us to more strategically use the very
limited resources available.
Another example of more effective utilization of resources
is the Indian Community Block Grant. We could better plan
housing, infrastructure development and economic opportunities
if we received funding through an allocation formula like large
cities do under the public CDBG or, for that matter, NAHASDA.
I would like to also comment on NAHASDA formal allocation
for funding and the use of the U.S. Census. The Cherokee Nation
citizens and other Indians in our area are undercounted by
whatever census classification or count, whether it be by
single race or multiple race. However, Census information at
this point is the only available information collected
systematically in which we have confidence and the use of which
has been determined through the negotiated rulemaking between
tribes and the Department of Housing and Urban Development. The
use of census information should be used as long as it
approximates tribal citizenship. We believe that any other use
of Census classifications, such as a restriction to only using
a single race, becomes purely a race-based policy rather than a
proxy or an index for citizenship in federally recognized
tribes when the effect is to artificially underestimate the
amounts of tribal citizens in an area. The use of the multiple-
race classification from the U.S. Census results in a more
accurate estimate of the tribal citizens in our area, even
though that number itself is undercounted.
We support any system--I want to reiterate this--we support
any system that is verifiable and reliable that best reflects
the number of citizens of federally recognized tribes and
Alaska Natives for specific formula areas.
In closing, I would like to express our appreciation for
the contribution of Congress, the attention of this committee.
What you have done for the Cherokee Nation and other Indian
tribes and your support of Indian Nation programs and self-
government and its self-determination are very valuable for our
continued existence and our efforts to regain the dignity and
status that we once historically held. Thank you very much.
Chairman Ney. Thank you, Chief.
[The prepared statement of Chadwick Smith can be found on
page 174 in the appendix.]
Chairman Ney. And Chairman Taylor.
STATEMENT OF WAYNE TAYLOR, JR., CHAIRMAN, HOPI TRIBE
Mr. Taylor. Chairman Ney, honorable members of the
subcommittee, welcome, and thank you so much for coming to
visit our homeland. My name is Wayne Taylor, Jr., and I am
Chairman of the Hopi Tribe.
My remarks today focus on the need to increase the
opportunities for Hopi people to live in quality and affordable
housing and to improve our participation under NAHASDA. In
addition, I will offer my thoughts on some of the critical
legislative and policy issues related to housing that require
the attention of our Congressional delegation and Congress
generally.
By way of background, the Hopi people and their ancestors
have lived in northern Arizona and the southwest in general for
many thousands of years. Our ancestors' once thriving but now
abandoned villages can be found throughout portions of Arizona,
New Mexico, Colorado and Utah. In 1882, the United States set
aside a small portion of our former ancestral home as a
reservation intended as a permanent home and abiding place for
Hopi. The Hopi village of Oraibi was a bustling community many
centuries before the coming of the European explorers and today
is recognized as the oldest continuously inhabited community in
North America.
Our reservation, some 1.6 million acres of land, is
situated in the middle of the Arizona portion of the Navajo
Reservation. The 12 villages of the Hopi reservation are within
a two-hour drive of the non-Indian border towns of Flagstaff,
Winslow and Holbrook. We are cross-town neighbors to the Navajo
community of Tuba City. According to the most recent population
data, the Hopi tribe has an on-reservation population of 8,000
tribal members with another 4,000 members living off the
reservation. The average household income for families in the
Hopi communities is $26,553, which is almost six thousand,
almost seven thousand less than the income for neighboring non-
Indian communities in Coconino and Navajo counties.
The Hopi have a long history of housing development. As
settled village dwellers, the Hopi built and maintained
community development projects throughout thousands of years of
their history preceding the founding of the United States. Hopi
communities were designed and constructed not simply as
shelters from the elements, but rather as places of safety and
social cohesion. The Hopi village was a place where individual
families could live comfortably, practice their agrarian
economy, attend to their religious obligations and build a
society that took care of their community members and offered
them a clear direction toward future security and prosperity.
Anyone visiting the Hopi villages today will see Hopi homes
built by Hopi hands that have been passed down through family
and clan inheritance for many hundreds of years. Generations of
Hopi people have literally been born, raised, and passed on in
Hopi housing built by their ancestors.
Unfortunately, our ability to keep pace with the need of
new housing through modern housing programs has not come close
to matching the ingenuity and adaptability of our ancestors.
Hopi people simply do not have sufficient quality and
affordable housing to meet existing and projected needs.
Housing is currently one of the greatest challenges facing the
Hopi people. Housing development faces a number of challenges.
Finding suitable locations for new housing can be extremely
difficult because of our system of village and clan land
holdings that restrict the building of new homes in close
proximity to the historic villages and reserves much of the
land for agriculture and religious practices. Of course, this
is a matter within the political control of the Hopi Tribe and
their villages and will have to be worked out according to
those political processes.
Our solution is to move new housing into areas not subject
to such restrictions. However, in such locations, we face the
difficulty of developing basic infrastructure, including water,
sewer, electricity and roads and the lack of funds for
construction activity. As our Hopi population grows and the
demand for housing increases, we fear these problems will only
get worse.
The statistics related to affordable housing for the Hopi
Tribe are disturbing and discouraging. According to the recent
surveys conducted by the Hopi Tribal Housing Authority, there
are 2,485 families living on the Hopi Reservation, of which
2,043 are low income; 1,215 Hopi families live in substandard
housing units, and nearly 691 families live in overcrowded
conditions, usually sharing the same household with other
family members.
The same survey shows that 1,116 owner-occupied units and
137 renter-occupied units under the HUD housing program, for
total units of 1,253. The statistics for these 1,253 units are
startling but not surprising. Of the 1,253 units, 436 are in
standard condition; 337 require minor rehabilitation; 439
require substantial rehabilitation, 29 are dilapidated and
require replacement; and ten are of unknown structural
condition. Financial assistance is badly needed to repair and
rehabilitate 773 units and to rebuild 29 new units.
The above statistics apply only to the Housing Authority
Indian Housing Plan for 2004. How am I doing on time?
Mr. Renzi. Wrap it up.
Mr. Taylor. Okay. What are we doing about the current
situation? A number of years ago, the Hopi Tribal Council
approved a comprehensive values plan, and within this plan
designed five new community sites to be located on the Hopi
partition lands. One such site is the Tawaovi community. The
new community of Tawaovi is located 15 miles north of Second
Mesa along BIA Route 4, also know as Turquoise Trail. The
Tawaovi community provides for mixed-use housing, commercial
and industrial development, and other government facilities. We
are working with the local housing authority to plan new
housing for these communities. We need Congressional support to
make the plans a reality.
I have some recommended legislative and policy matters that
we would like to have your subcommittee in Congress assist us
with. They have been generally addressed already, so I will
leave that as part of my written record.
Chairman Ney. It will be accepted without objection.
Mr. Taylor. Thank you.
Chairman Ney. Thank you, Chairman.
[The prepared statement of Wayne Taylor Jr., can be found
on page 193 in the appendix.]
Chairman Ney. I want to thank all of the panelists.
Let me ask our ranking member, Ms. Waters, I'd like to ask
a question about something we saw today. It's a generic
question on behalf of us.
I saw a hogan, and there was a power line. I could visibly
see that power line, and the line was there, but it can't be
connected. And it's due to a----
Mr. Renzi. Arizona Public Service.
Chairman Ney. Arizona Public Service, and then I think the
Bennett Freeze. So the question I want to ask is, in my mind,
what benefit is it when you can stand and see that power line
and not be hooked up? It's not a matter of money, in my
opinion. Let's say it costs five hundred dollars to hook it up.
We say here is the five hundred, but it can't be hooked up
because of the Bennett Freeze? Is that correct? Anybody like to
answer that?
Mr. Taylor. Mr. Chairman, Wayne Taylor, Hopi Tribe
Chairman.
What we are dealing with in certain parts of this area here
are what is called the Bennett Freeze areas. This is currently
in litigation and has been the subject of many court battles.
It has been appealed to the Ninth Circuit and has been remanded
now to the lower district court in Phoenix and we are awaiting
some kind of a decision by the judge in that case.
Unfortunately, that has been there in the courts for quite a
long period of time.
I would like to commend the leadership for the Navajo
Nation. Starting with President Kelsey Begay, we began to have
negotiations to try to settle this land issue so that we can
unfreeze the so-called Bennett Freeze. When President Joe
Shirley became the next President, we continued these
mediations, and I am happy to report that we have now reached
an agreement in principle on a compact that we will now be
taking to Washington D.C. Where we hope that the Department of
Interior would also sign off on this particular compact.
We then will have a product that we can take to our
respective tribal councils for ratification. This will address
the unfortunate delays in getting people to get serviced.
Chairman Ney. So does the Bennett Freeze prevent that power
line from being hooked up today, or is it an arrangement you
have to make between the two nations or between the two tribes?
Mr. Taylor. What happens is any kind of development has to
get--of course, it begins with the Navajo Nation. They go
through their review process. Once that's concluded, then it
goes to the Hopi Tribe because it's those lands that we have
litigation over so we have to concur on these developments. And
the development has to--the permit for these developments have
to come through the Hopi Tribe. We have to concur before
development can begin.
And there is a process in place for that, and I would say
that 98 percent of those requests that come to the Hopi Tribe
are approved. It's just that it's a lengthy process.
Chairman Ney. One thing that confused me. We reviewed the
Bennett Freeze, which in 1961, Bennett was in Congress. But,
for example, this was a unit that--ICE did a real good job of
building this, you know, and helping the family. But if we are
talking about development, that was built so--the actual home
was built, so it's hard for me to understand why the line
couldn't be hooked up because the actual home was built. Is
there also a problem with Arizona Public, or power supplies? Is
that another side? Let me try to make it more clear. I'm
probably not making it clear enough.
If it's a matter of development, why could the actual home
be built but why couldn't the line come 20 feet into the home?
If it's a matter of development of the Bennett Freeze, then the
home shouldn't have been built. I'm just trying to rationalize
it. I'm not blaming anybody, I'm just trying to rationalize it
in my mind.
Mr. Shirley. Chairman, members of the committee. One of the
things that also is going on besides what Chairman Taylor has
alluded to, the bureaucracy in getting power to homes because
of the Bennett Freeze, there is also jurisdiction regarding
power companies. We have our own.
The Navajo Nation has its----
Chairman Ney. The jurisdiction of what?
Mr. Shirley. Power companies.
Chairman Ney. Power companies?
Mr. Shirley. Yes. Arizona Public Service is an entity
that's outside Navajo land. The Navajo Tribal Utility Authority
is the tribe's own power source. It hooks up electricity,
power, water, sewer to homes. So, because of the Bennett
Freeze, we have to also negotiate on the cost sometimes. And
sometimes APS could come in and sometimes NTUA could come in
for whatever reason. So that's one of the reasons why.
Chairman Ney. Thank you. My time is up. I will yield to our
ranking member.
Ms. Waters. Thank you very much, Mr. Chairman.
I would like to thank our panelists for being here today.
I'm particularly pleased to see and meet the leadership of not
only the Navajo, but the Hopi.
And I am looking for some guidance. I need you to tell this
panel what your priority suggestions would be for helping to
remove some of the barriers, whether that is with lending
agencies, Congress cutbacks, administration cutbacks, or with
tribal court cases or the Bennett Freeze that's been talked
about.
Now, as I understand--let me just backtrack a little bit.
As I understand, it appears that the courts--the Bennett Freeze
settlement is now in the hands of the court.
Mr. Taylor. Correct.
Ms. Waters. But you also indicated that the tribes were
getting together in addition to what the court is doing.
Should you reach an agreement or settlement prior to the
court finishing its work, would that take precedence over the
courts and then the court would no longer have to be involved
in this decision? Mr. Taylor
Mr. Shirley. It is my understanding, Miss Waters, the Hopi
Nation, working with the Navajo Nation, is trying to come to an
agreement where we are going to put an end to the litigation.
And once we reach agreement, hopefully, for everybody, that
will happen. And then from there, infrastructure and housing
will start going into Bennett Freeze.
Ms. Waters. So you're saying that a settlement between the
tribes would supersede the court work that's being done now so
you may not have to wait for another year or six months on a
court decision? Is that correct?
Mr. Taylor. Congresswoman Waters, the case is in the lower
district court, as I mentioned, and we have been waiting for
the judge to make some kind of a ruling on this particular
case, but that, unfortunately, has not been forthcoming for
quite a long time.
So that was what prompted the two tribes to begin to talk.
And what we have done is we have asked the courts to assist us
in this effort, and they have assigned one of the judges from
the Ninth Circuit court and so that judge is helping to mediate
between the two parties.
So once the--all the parties have signed on to the
agreement, then that will end this case.
Ms. Waters. That's great and that's very encouraging. We
visited a location today where an elderly woman was living in a
very substandard housing situation because her home had burned
down and she could not replace it because of the dispute. So
this would be wonderful if the tribes can reach an agreement,
and we would certainly encourage, encourage, encourage you to
do that. And I suppose once that's done, that would help to
move the issues of housing development in some very profound
ways.
If I have time, Mr. Chairman, the next thing I want to know
is what can we do, what do you suggest that we do with the
financial services community? What would you say to banks and
financial institutions about providing loans and mortgages to
families when they say that they can't do it or it's very
difficult for them to do it because there's a lack of ownership
by individual families to own trust land and there is not a lot
of income by Indian families for collateral? Do you have any
suggestions or any ideas about what we can do? What could we
say to those financial institutions?
Mr. Shirley. Chairman and Ms. Waters, let me defer that
question to my technical person, who is also the chief
executive officer of the Navajo Housing Authority, Chester
Carl, to help me answer that question.
Ms. Waters. Yes. Please identify yourself for the record.
Mr. Carl. Thank you very much, Congresswoman Waters and
Chairman Ney, and, of course, Congressman Renzi and Congressman
Matheson. Thank you for the opportunity to ask these questions.
One of the barriers that we see is related to possibly the
enforcement of the Community Reinvestment Act. Currently, on
the Navajo Nation, we only have five banking facilities, while
on the streets of Washington D.C., you'll find five banks in
one block. And because of the lack of investments, Navajo
opportunities of every American dream to establish
homeownership is not possible.
So, because of those challenges that we face, a lot of
times banks are able to post an acceptable score in using other
neighboring communities on how they invest their money in
Indian country. So as a committee empowered with that
authority, we would like for you to look at how community
reinvestment works in Indian country.
The second part of that is there's been a lot of discussion
on Section 184. When Section 184 was implemented, it was a
dream to allow opportunities to Native Americans who were not
at the acceptable level for conventional loan programming.
Somewhere along the way through the bureaucratic process, it
became where you almost had to be goldplated in order to get a
loan through the Section 184 program. When we started the
program, the approval was done at the field offices of the
Native American program, and eventually that got centralized to
the national office and it became problematic, so it hasn't
been at a level where it should be. So the recommendation would
be possibly move it back down to the field offices because we
work with those offices hand-in-hand and one-on-one, and we
will try to work with those programs as well.
The third part of that is the BIA. You noted that the BIA
is not at the table. Part of that is a recommendation for
procedures, and there is a commission that's been established
called the Land Title Commission by Congress, and if we could
fast track that and have that commission go into effect so we
can start to get some of these issues resolved, then, through
sovereign rights of tribes, to establish a title plan with the
tribe and BIA for those functions.
Ms. Waters. Thank you very much. Those are very concrete
recommendations and I'm sure that our members of Congress
representing the area can move on those kinds of
recommendations to remove some of these barriers. And of
course, if they don't, their friends will nudge them. All
right. Thank you.
Chairman Ney. Thank you. Gentleman from Arizona, Mr. Renzi.
Mr. Renzi. Thank you, Mr. Chairman.
Chairman Kitcheyen, in your testimony, you spoke about
infrastructure needs. You also mentioned the fact that if we
build 125 homes a year for the next ten years, we would only
begin to meet the current housing need.
What is the number one impediment at San Carlos Apache that
doesn't allow the, this generation to purchase homes? What is
the number one impediment you're finding?
Ms. Kitcheyen. Currently, the number one barrier is the
fact that over a year ago, the tribe submitted to HUD
environmental reviews. And because they are so slow in doing
their job, we are two years behind in spending our dollars.
Mr. Renzi. Tell me a little bit about that submittal,
please. It was to the HUD for environmental review.
Ms. Kitcheyen. Okay. There's two projects, Congressman,
that we did. And I'm not sure how many homes we're talking
about, but I'm sure that, I think it is about two housing
units, so that would be four, and they are behind, like I said.
And right now that's the current barrier. We need to use those
dollars, and we just don't, you know, we waited--and what we
would need is for the government to give more leverage to the
southwest office in Phoenix so they can have the additional
support to speed up that process.
Mr. Renzi. Thank you. We have officials here on the second
panel who will be testifying. He is the Under Secretary for
Public and Indian Housing, and I want to be sure that Michael,
when he does come up, heard your words, particularly the fact
that you have two projects that are ready to go, we just need a
little bit of help.
President Shirley, you also spoke and devoted much of your
testimony towards, also, a need at HUD. What would you like to
see--and, again, forgive me for asking you to repeat, but just
encapsulate as it relates to the census issue. What would you
like to see the solution being? You can speak directly to the
HUD people who are here listening to your voice right now.
Mr. Shirley. My testimony surrounds the multi-race, the use
of the multi-race data, and we feel that it's outside of
federal law. I guess what I would like to see is getting back
to federal law where you work with tribal members to get who is
a member of tribes, who is supposed to be benefitting from the
allocations for housing from the federal government. That would
be my recommendation.
Mr. Renzi. I also want to call attention and thank you for
your leadership, along with Chairman Taylor, on the Bennett
Freeze issue. I know no one together has worked as tireless as
you two guys have to come up with what is on the verge, I
believe, of a beautiful compromise.
Finally--yes. That deserves some recognition. It really
does.
President Shirley, you have been looking for creative ways
to build your own payroll. Monies are being spent on
surrounding communities. Can you quickly help us understand
what we need to do in order for that dollar to stay on Navajo
lands so that it will be recycled and how that would affect
your people.
Mr. Shirley. We need economic growth returned. And right
now, the Navajo Nation has as one of its initiatives to develop
a small business sector of Navajo Nation economy, and that
would involve bringing in big boxes like Wal-Mart and Super
Target to create jobs, create additional revenues. If we can
create jobs here, that's revenues that will flow within the
Navajo land and out of the border towns.
Mr. Renzi. By creating the jobs, you are going to have the
ability to borrow and have the credit and ability to lend.
Finally, as far as the White Mountain Apache are involved,
sir, thank you for coming and filling in for Chairman Massey.
We were able to accomplish together a project that both the
governor's office, the State, as well as the federal
government, this facility called Apache Dawn. It was one of the
first areas where we were able to lend money, to get the Home
Loan Bank out of San Francisco, through an Arizona bank, to
lend money to you all.
And I think the issue came down to--obviously, traditional
lenders won't lend because of the sovereign land. They won't
attach collateral to sovereign land. This is one of the big
issues as it relates to the traditional lending arms of a
commercial facility looking at attaching to sovereign land.
They don't do it.
Can you quickly tell the people here how you were able to
overcome that obstacle and how this model has become a model
for, I believe, many of the Native American people around the
nation?
Mr. Winfield. One of the things I would like to express to
the committee here is that I think White Mountain Apache Tribe
has been really looking forward for some great opportunity, and
I think that they came when the national President expressed
about these kind of projects, and we got into the picture and
we entered, got ourself into it to the point where we decided
to go after some of these projects. So I have a young lady from
the housing program with me so I will let her express, explain
this thing. I would like to call Miss Yazzie to come over.
Mr. Renzi. State your name for the record, please.
Ms. Yazzie. My name is Aneva Yazzie. I'm a management
consultant to the White Mountain Apache Housing Authority.
In response to your question, Congressman, what we have
utilized in order to make this whole transaction possible was
to take advantage of HUD's federal loan guarantee programs
offer under the Section 184 program, as well as HUD's Title VI
loan guarantee program to overcome--to minimize financial
institutions' risk on reservation land for the White Mountain
Apache Tribe.
So in that regard, we were able to put in the underwriting
with the various bankers, Bank One, Countrywide Home Loans for
the Apache Dawn program, and then the WIFA state agency as well
is a qualified lender.
Mr. Renzi. So to get those financial organizations to lend
money to the Apache Nation, and they can't collateralize the
land, did we post a bond to collateralize? What collateral did
you all provide to make them comfortable with lending the half
million dollars you got in order to finish the infrastructure?
Ms. Yazzie. What collateralized under that bond
underwriting process was the Section 184 loan program. Let me
explain that process real quickly and as simply as I can.
What we have done is we have utilized HUD's 184 loan
program to get the construction loan for each home that was
built with Bank One. I'll name the financial institution that
we partnered with. Bank One then, in turn, sold the mortgage
loan to a loan servicer, Countrywide Home Loans. Countrywide
Home Loans then, in turn, pooled those loans into a Ginnie Mae
security. The Ginnie Mae security then was sold to the bond
trustee. In this case, the bonds were sold, which they held the
notes to pay the investors.
Mr. Renzi. So that creative financial instrument was then
able to allow and effectuate how many homes at Apache Dawn?
Ms. Yazzie. We initially planned 250, but we are building
now 317 homes for $25 million.
Mr. Renzi. 317 homes, new homes, as a result of this
creative financing.
Mr. Chairman, I see my time is up. I want to thank you very
much. Chairman Taylor, I didn't get a chance to ask my question
of you, but we'll talk later.
Thank you, Mr. Chairman.
Chairman Ney. Thank you. The gentleman from Utah.
Mr. Matheson. Thank you, Mr. Chairman.
I have to say this panel, in reviewing their testimony, has
offered a number of specific recommendations. I'm very
impressed with the quality of the testimony. I think it gives
the committee a lot to cue on and consider. I've sat in on a
lot of congressional hearings in my short career, and this is
very impressive in terms of your testimony. I appreciate that.
A couple things I wanted to ask about. First of all, there
are a number of impediments. There is no simple answer to these
issues. We have talked about the problem with the trust and
tribal lands, the lack of infrastructure in terms of water,
electric, roads. We have talked about working with federal
bureaucracies. I understand that there are a number of
challenges here, but there is another one we haven't talked
about too much, and that's the overall funding level. And, as
you know, there is a concern about the budget, consideration
going on in Congress right now what the funding levels are
going to be and if they are going to be cut or not.
I hear it's going to take, from Mr. Taylor's testimony, 123
years to meet current demands. And I assume that's because
right now, based on the funding stream coming to you, that's
what it equates to, 123 years to meet your current demand.
Mr. Taylor. That's correct, Mr. Congressman.
Mr. Matheson. He said yes. I'll answer for him.
What I hear from the San Carlos Apache is that you have to
build 125 homes a year for ten years? Is that a rate that you
are achieving right now with the funding stream you've got.
Ms. Kitcheyen. No, sir.
Mr. Matheson. What rate----
Ms. Kitcheyen. It's not what we're achieving right now.
Currently, we have 2,400 families on the reservation that need
homes, and 39 percent of families live in substandard housing.
And we also have 40 percent of families that live in
overcrowded conditions. Ninety-four percent of 3,067 total
families are considered low income under NAHASDA.
So what we need is more money committed to build homes on
the Indian reservations.
Mr. Matheson. I don't want to oversimplify. I said at the
start of my comments you can't oversimplify. And just more
funding is not the only solution here, but I think we need to
put that issue out as one of the variables we ought to be
talking about. We ought to talk about the fact that the budget
considerations in Congress right now, I do not think are
adequate. This majority would probably agree with that comment.
I wanted to switch to Chief Smith. You mentioned in your
testimony how the Cherokee Nation is the largest user of the
loan guarantees under Title VI of NAHASDA, and you're actually
looking to expand it because relatively few tribes outside the
Cherokee Nation have been taking advantage of this program.
What is it that has allowed you to take advantage of this
program in such a successful way.
Mr. Smith. Probably the necessity of the moment. The
funding by the government is very marginal. We have to be very
creative and aggressive. We have had the cooperation of the
local banks and HUD and other agencies. We borrowed $50
million. We anticipate it's going to build 550, 600 houses. We
have already got 400 on the ground.
Mr. Matheson. I would just suggest it sounds to me there
may very well be a lessen to be learned in terms of your
relationship, you said with your local banks and whatnot, that
other tribes could benefit from as well in terms of this
program. I think that's another piece of information not just
for us, but for the other folks on the panel. That's a good
lesson we could take some advice in.
One more question I have on the trust status of lands and
its impediments to moving forward. I read in one of my pieces
of material that I was provided to prepare for this meeting
that under the current backlog with BIA title searches, that
there is a 113-year backlog.
How are you ever going to make progress on your housing
shortages with that kind of backlog? Maybe there is no answer
to that, quite frankly, but tell me if that's a significant
issue in trying to make progress in the housing. And I'm asking
no one in particular, but how is that affecting you when you
have BIA that slow in doing the title searches?
Mr. Shirley. Right now, that's--you're right, Congressman
Matheson, that the BIA just hasn't been there for tribes. In
our case, the Navajo Nation, right now we are trying to go
through a reorganization, trying to just get at that. They
should have gotten that fixed decades ago. And right now it's a
big hinderance because of the lack of their progress, or the
lack of being there for tribes. And all I can say is that
because of them, my gosh, on Navajo land not only are we behind
on improving housing, but we are behind by $435 million.
Mr. Matheson. I know my time is up, but one last question.
In terms of this trust land status and how it's been an
impediment to you making progress on the Navajo Nation in terms
of housing--and I know this hearing isn't specifically about
housing, but is that also affecting you in terms of moving
forward, in terms of commercial development and economic
development within the Navajo Nation as well?
Mr. Shirley. Yes, it has. In terms of leasing, same with
Congressman Renzi addressing collateral and borrowing money, we
can't put up the land as collateral to borrow money. That has
been one of the biggest impediments.
And, also, because of trust land status, the BIA has to
have a hand in every business that is leased. And right now, we
are trying to lock up on the loans to get away from that. If we
could do our own leasing, I think that would go a long way
towards putting economic development on the fast track.
Mr. Winfield. I would like to express a few items that were
brought up about the need of housing.
Today in the United States there is 500 Indian tribes that
the unmet needs are so great that what you brought up, 113
years possibly to catch up. I am involved in the National
Budget Tribal Committee with the western region. There is 12
Indian tribes throughout the United States that have been
putting the 2006 budget together. And the last two, three weeks
ago, we were back in D.C. And sat with the committee and the
Department of Interior to start on a financial budget for 2006.
Just to let the public be aware, United States BIA tribal
prioritized budget allocation for 2006, we are going to see
$253 million budget cut for Indian tribes throughout the United
States. For 2005, we experience over $50 million budget cut
already. So, through the President of the United States, we
have experienced for 2005-2006 a big, major budget cut for
Indian country. And we are trying to request for top priorities
on the allocation, and on the list, housing is one of them that
is a main need. But we are continually seeing ourself being
involved in budget cut from Department of Interior.
We don't know how we're going to see ourselves in another
so many years, 2007, how our budget will look, but 2006, it
hurts to see $253 million budget cut for United States Indian
tribes, twelve region, 500 Indian tribes. You are involved in
the committee is great for housing. That's the greatest thing.
We even put the Housing Improvement Project, they call it HIP,
into our top priorities, and that has hit a major cutback
already, too, from the BIA.
So talking about HUD here, HIP is getting major cuts and
we're hurting. Indian tribes is hurting. Your visit to Navajo
Nation, if you visit the whole 500 Indian tribes, you would
come to a similar housing need for Indian people. So, you know,
I hope that this meeting will come to something very special
and major so that one day we can see improvement in Indian
country because of great equal housing.
Like the San Carlos Chairwoman said, 2,000 plus need; White
Mountain is about, somewhere close, near the same number for
our people. Thank you.
Mr. Matheson. I appreciate that.
Ms. Kitcheyen. Chairman Ney, if I may, please. I forgot to
include this as part of the formal testimony. I'd like to enter
it at this time, please.
Chairman Ney. Without objection.
Ms. Kitcheyen. Thank you.
Chairman Ney. Let me just note in closing this panel that
we need to--and, unfortunately, the BIA is not here today.
Another thing we need to do between now and then.
I wanted to state that this brings up some issues, and
although all of us value housing, these new bits and pieces of
things work more correctly when you start to look at other
areas where housing is done. For example, in my area, how
housing is done now, there's the trust, the deed, a variety of
factors.
But it also seems that if monies go through HUD, some
monies go through BIA, some monies through veterans, they are
going to come to a log jam at every point involved in the BIA.
And what is going to happen is, if you want to talk about
budgeting, is people in Washington that deal with budgets are
going to look at and it say, well, the money was given to the
Indian community but they didn't use all of it so, therefore,
the money is coming back that wasn't used.
And you can understand that. That's part of the process of
thinking. I'm not saying it's always correct, but that's part
of the process of thinking.
I think also, I'd like to know as the monies come out where
they go, what holds it up. So, obviously, if there is a 113-
year log jam, we have a problem with--magically, today, if
there was enough money to build homes--getting titles. So I
think we need to look at that.
I want to thank the great panel. You have provided a lot of
information. You have done a lot of good today. After
listening, I understand, and I'm also a little confused, which
is not bad. It makes us ask more questions. So I want to thank
the panel.
We will move on to the second panel.
[recess.]
Chairman Ney. The hearing will come to order if it could,
please. We will now continue with panel two. Please take a seat
and we will go on with panel two.
The first person to testify for panel two is Gilbert
Gonzalez, Jr. Gilbert Gonzalez, Jr. is the Acting Under
Secretary for Rural Development, the U.S. Department of
Agriculture. He oversees three agencies--if we can come to
order, please, so we can hear the second panel, which is
important. Can we come to order. Okay, you're being tougher
than Congress is. If we can please come to order.
Mr. Gonzalez oversees three agencies, the Rural Business
Cooperative Service, the Rural Utilities Service and the Rural
Housing Service that together provides $14 million annually in
grants, loans, and technical assistance to rural residents,
communities and businesses.
Mr. Gonzalez has been active in banking, housing and
economic development efforts in the State of Texas. He was the
founding President of the Community Development Loan Fund, a
for-profit loan and development corporation, a collaborative
effort between the city of San Antonio and 21 banks. The
corporation served the credit needs of small minority-owned and
women-owned businesses in San Antonio.
Michael Liu is the Assistant Secretary for Public and
Indian Housing at the U.S. Department of Housing and Urban
Development. He oversees the administration of all public
housing, Section 8 rental systems, and Native American
programs. Programs are comprised of over 60 percent of the
housing budget, over $30 billion.
Prior to his assuming his position at HUD, Mr. Liu served
as a managing committee member for the Federal Home Loan Bank
of Chicago.
We want to thank both gentleman for coming the distance
here to Arizona and we will start with Mr. Gonzalez. Thank you.
STATEMENT OF GILBERT G. GONZALEZ, JR., ACTING UNDERSECRETARY
FOR RURAL DEVELOPMENT, U.S. DEPARTMENT OF AGRICULTURE;
ACCOMPANIED BY ED BROWNING, STATE DIRECTOR FOR ARIZONA
Mr. Gonzalez. Thank you, Chairman Ney, members of the
Committee, for the opportunity to discuss how USDA Rural
Development is working to support housing opportunities for
Native Americans.
But before I proceed, I would like to introduce our State
director for Arizona, Eddie Browning, and some of our Native
American and housing specialists.
It is personally gratifying for me to lead a team of
professionals who work every day with families and communities
of various Native American nations and other rural areas and to
see and hear how Rural Development programs are impacting the
lives of people living in rural areas.
Mr. Chairman, the housing programs authorized by this
subcommittee are changing lives and are bringing new hope where
it didn't exist before. Rural Development is proud to be part
of this effort to increase housing opportunities for Native
American families. We are also proud of our commitments, to
assist families and communities with overall economic and
community development needs.
Rural Development is essentially a large bank with an $86
billion loan portfolio. Our mission is to increase economic
opportunity and to improve the quality of life for all rural
communities. Our vision is to be a catalyst and to help rural
communities to diversify their economics and to increase the
flow of capital for homeownership, for entrepreneurship and for
infrastructure.
Homeownership is the oldest form of building equity. Rural
Development has seen a 20 percent increase in single family
housing direct loans to Native Americans over the last three
years. In our single family housing guarantee program, we have
seen nearly a 50 percent increase.
Supporting existing housing: For example, the families in
Le Chee have received repairs and renovations that have brought
new ``luxuries'' that we take for granted, such as indoor
plumbing, electricity, et cetera.
Other housing opportunities: The White Mountain Apache
multi-family housing complex was dedicated last Thursday. It
has 22 units that will provide decent, safe, and affordable
housing. Displayed to my right is the multi-family project that
I am describing. And, obviously, there is a celebration with
the Crown Dancers, celebrating the grand opening of that multi-
family project.
Entrepreneurship is the economic engine of the U.S.
economy.
Rural Development invested $31 million in grants and low
interest loans for local revolving loan funds for individual
business startups and expansions, and 16 business loan
guarantees.
The third leg of economic development for rural areas is
infrastructure, and I want to cite one example of what we are
doing in rural America. Our broadband program and other
technologies are bringing and providing rural communities the
ability to compete domestically and globally.
An example of this is our distance learning and
telemedicine program and our broadband program. Both bringing
economic opportunity and quality of life for those in rural
communities. The Wellpinit School District on the Spokane
Indian reservation, which serves 450 students K through 12, is
one of the examples where we provided assistance. Several years
ago, the school district was concerned with dropout rates of
the students. Becoming aware that they lacked access to a
variety of classes their students needed, they decided they
needed to create global classrooms where students have access
to educational opportunities worldwide in a job corps training
center. They applied for and received a distance learning
telemedicine grant from Rural Development to help create these
classrooms and training facilities.
Since then, they have received a second distance learning
telemedicine grant. This past year, the school district had a
100 percent graduation rate, and all 13 graduates went on to
attend college. As a group, they received nearly a half million
dollars in scholarships.
Secretary Venaman announced in May 2003 $20 million in
grants to support additional advances in technology and
broadband. Of that, eight million is going to support Native
American ventures, three here in Arizona, for over $760,000.
Coming from the private sector myself and coming to the
government, there definitely is a lack of coordination.
Successful economic development requires working together,
cooperation, coordination with federal and private sector
partners, and more importantly with educational partners.
Many who are present here today, Fannie Mae, the banks like
Wells Fargo, credit unions and others, Rural Development in the
past two and a half years has partnered with HUD, the Small
Business Administration, Treasury, CDFI program, Congress, its
EDA program and HHS, just to name a few. Banking partners in
my, in my experience are capital providers who will bring
economic opportunity to rural communities.
Since the beginning of the Bush Administration, we have
utilized in Rural Development 40 plus programs administered by
Rural Development to invest over $37 billion to support local
economic and community development efforts, investments that
will improve overall living and economic conditions in rural
communities, including communities in the nations represented
here today.
Our philosophy is that it's all about local ownership and
local control, and when local leaders drive these
opportunities, businesses flourish, more families become
homeowners, access to health and educational services are
improved, and the community as a whole begins to reap the
benefits. The Bush Administration has been working hard with
American Indian, Alaskan Native tribes, tribal communities,
tribal organizations and individuals to provide a greater
understanding of the investment opportunities available and
assist with guidance on how to access Rural Development
financing.
Since the beginning of the Bush Administration, Rural
Development has doubled the investments made to Native American
communities. In fact, Rural Development has provided nearly a
quarter of a billion towards this effort; every year, setting
new records and providing financial assistance for housing,
community facilities, economic development, and infrastructure.
To my far right is a second set of graphs that shows in
2001, Rural Development provided $177 million in Native
American communities. In 2002, we provided $191 million in
Native American Communities. In 2003, Rural Development
invested about $234 million in rural investments in Native
American communities.
Mr. Chairman, your hearing today provides us with an
opportunity to share with you and members of the subcommittee
ways in which we are administering Rural Development programs
to maximize federal resources with other federal, tribal, state
and local government and private sector partners, as well as
individual investments to supplement the resources provided
through Rural Development. This becomes particularly important
as we seek to reach more communities and individuals.
I believe we are making progress, but I also believe we
must continue to find new ways to do more. I have shared in my
written testimony many of the successful efforts we have
undertaken over the past three years, particularly in support
of Native American families and their communities.
Mr. Chairman, I am happy to answer any questions you may
have at this time.
Chairman Ney. Thank you, Mr. Gonzalez.
[The prepared statement of Gilbert G. Gonzalez Jr. can be
found on page 86 in the appendix.]
Chairman Ney. Mr. Liu, to you.
STATEMENT OF HON. MICHAEL LIU, ASSISTANT SECRETARY FOR PUBLIC
AND INDIAN HOUSING, U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT
Mr. Liu. Mr. Chairman, members of the committee, thank you
for inviting me to this very important hearing on improving
housing for Native Americans. My name is Michael Liu, and I am
the Assistant Secretary for Public and Indian Housing,
responsible for the management, operation and oversight of
HUD's Native American programs. These programs are available to
562 federally recognized Indian tribes. We serve these tribes
directly or through their tribally designated housing entities
by providing grants and loan guarantees designed to support
affordable housing and community and economic development
functions.
Tribes are improving housing conditions for their members.
This momentum needs to be sustained as we continue to
collaborate to create a better living environment for these
families.
At the outset, let me reaffirm the Department of Housing
and Urban Development's support for the principle of
government-to-government relations with federally recognized
Indian tribes. HUD is committed to honoring this fundamental
precept in our work with American Indians and Alaskan Natives.
Over the seven years that funding has been made available
under the Native American Housing Assistance and Self-
Determination Act, NAHASDA, over $4.4 billion has been
appropriated through HUD to try to get tribally designated
housing entities to provide decent, safe and affordable housing
throughout Indian country. During this same period, HUD's
Indian CDBG program helped address the economic development,
infrastructure and community development needs of federally
recognized tribes with $485 million in funding.
The Section 184 loan guarantee program, which made its
first loan in FY '97 has guaranteed over 1,500 loans worth more
than $151 million. The program provides the answer for many
families, tribes, and TDHEs who want to obtain home mortgages
on trusts or restricted lands, as well as fee lands where there
is a service area or area of operation that has been assigned
to the tribes. These are places where private market lenders
never did business before.
The Title VI program allows the tribe to jump start and
enhance its housing programs with federally guaranteed loans.
Loan guarantees amounting to $77 million are in place under the
Title VI program. I encourage you to review my written
testimony which begins by briefly outlining our programs, going
over the numbers in the FY '05 budget request, and then
discusses an issue that I want to focus in on today: The large
credit authority balances and our loan funds and how we are
working aggressively with tribes and lenders to get much needed
capital into Native American communities for homeownership.
We have two loan guarantee programs that I touched on a
moment ago. I would like you to consider them when you think
about homeownership. The Section 184 Indian Housing Loan
Guarantee Program certainly is in line with one of the
administration's highest priorities, and that is creating more
homeownership for America. While 70 percent of all American
households own their own homes, the number is significantly
less for Native Americans, especially for those on the rural
trust lands that constitute most Indian reservations.
Section 184 provides a 100 percent guarantee for loans to
income eligible and creditworthy Native American families,
Indian tribes, or their tribally designated housing entities.
Borrowers can purchase, construct, or acquire single-family
homes on Indian trust or restricted lands, land within the
service area of an IHBG grant recipient, and in other
designated Indian areas.
The reluctance of banks and lenders to engage in mortgage
lending on trust land prompted creation of the program. It has
made homeownership a reality for many Native American families.
The 100 percent guarantee, combined with lower closing costs,
is attractive to both lenders and borrowers, and if used on
trust lands, tribes must have a functioning tribal court system
or enter into an agreement with another ajudicatory entity and
enact ordinances covering foreclosure, eviction, and related
matters.
A direct result of the program is it provides an
opportunity for lower and moderate income families living on
reservations to move from subsidized housing units and thus
freeing up that housing for use by low income families.
The GAO, in 1997, pointed out that from 1992 to 1996, only
92 conventional home mortgage loans were closed on tribal
lands. Half of those were on a reservation where the tribe
owned the bank. As I mentioned earlier, working with now nearly
over 200 lenders, including Wells Fargo, Bank One, US Bank and
Washington Mutual, among many others, including small banks,
HUD has assisted over 1,500 families with their housing needs
by guaranteeing mortgages where others would not.
Section 184 loans have been sold to 18 entities, including
two Federal Home Loan banks, Fannie Mae, Freddie Mac,
Countrywide, M and T Mortgage, and the Alaska, New Mexico,
North and South Dakota state housing finance agencies. Both the
Navajo Nation and the White Mountain Apache tribe are active
184 borrowers. They have developed several projects using 184,
including Carigan Estates in St. Michaels, which is near Window
Rock, and the Apache Dawn project which you have heard about
this afternoon.
On the Title VI guarantee program, we are focusing on
developing and strengthening reservation economies on a larger
scale than just purely housing. Through this experience, we
realize that tribes need more access to banks and other
financial institutions.
One of the best ways to gain access and foster this
relationship is to look at leveraging public funds with private
investments and gain greater economic benefit. The Title VI
program is available to Indian Housing Block Grant recipients
in need of additional funds to engage in affordable housing. A
private lender investor provides the loan and the government
guarantee ensures repayment in the event of default. If there
is a default, the government will seek repayment through the
borrower's IHBG funds.
Title VI projects are usually larger, more sophisticated
endeavors, using a variety of funding sources, but that is not
a program requirement.
Loan guarantee funds and the balances and initiatives. I
have directed the Office of Native American Programs to focus
attention on how to improve participation in both the 184 and
Title VI programs. ONAP will accelerate its outreach to
lenders, tribes and TDHEs and more aggressively market the
programs. We have significantly increased our loan guarantee
training sessions and included segments about them in other
trainings and other public events whenever possible. At every
available forum, I am educating the public about the programs
and inviting whoever is interested to come and talk to HUD
about how the program works and how to improve the program to
make it more user friendly.
But those millions of dollars will not be available for an
unlimited time. I'd like to address just for a moment now the
proposed cancellation of these loan programs.
The Department proposes to cancel unused credit subsidy
totalling approximately $54 million which has accumulated in
the----
Chairman Ney. I'm sorry. What was the amount?
Mr. Liu. $54 million in credit subsidy which has
accumulated over the past five years.
These proposed cancellations will enable us to preserve
full funding in our '05 budget at the '04 request levels for
all Native American programs. The rescissions will not occur
until the end of fiscal year '05. Any unused credit subsidy
that has been committed by that time will not be rescinded. We
ask all here who are interested, we want to use them so that we
don't lose them.
In conclusion, sir, HUD respects and supports the progress
being made by tribes and their TDHEs in providing affordable
housing to Native American communities.
This concludes my remarks, and I stand happy to respond to
any questions from you or your members. Thank you.
[The prepared statement of Hon. Michael Liu can be found on
page 139 in the appendix.]
Chairman Ney. I want to thank both gentlemen for your
testimony.
Let me just point out a couple of things. Of course, much
of the Native American land is held in trust--before I do, let
me ask one question of Mr. Gonzalez.
When you are assisting with housing, or programs on Indian
land, do you also at the end of the day have to have the BIA
involved the same way as HUD would?
Mr. Gonzalez. I've got some of our technical staff, but I
would say in perfecting our liens and deeds of trust, the BIA
does play a role in terms of title processing.
Chairman Ney. There are issues about the trust, the trust
status, the type of economic activity sometimes that can be
allowed on Native American lands according to some reports, so
I wonder how that affects either one of your abilities.
Also, the inspector general report states several things.
It says when projects are assisted by multiple programs, there
are conflicting admission requirements. So if you're one
department, the veterans perhaps have some money for housing,
USDA, HUD, BIA. So this report says when they are, again,
assisted by multiple programs, there is conflicting admission
requirements. So one would require, you know, more for
admission than another.
Also, it goes into the TDHEs. Now, as far as the TDHEs, it
says something about some of their unfamiliarity with the
NAHASDA requirements. So the nature of my question, I guess, is
this--and, of course, that's no different than the public
housing authorities that will run into some problems. And HUD
has to work--you know how the system works with the housing
authorities.
With regards to the BIA and this backlog, and obviously you
issue X amount of millions of dollars which has not been spent
so therefore, eventually, we all know what's going to happen.
It's going to be taken. Having said all that, is there
something that Congress needs to do to sit down with all the
parties involved, whether it's the veterans, whether it's the
USDA, HUD, and BIA, or can this be done by internal rulemaking
authority, or can Congress sit down and somehow be able to work
with you all to make this work for the better?
And I'm aiming at what's been testified to as a backlog by
BIA. Does something need to be done, or will it work out, or--
any opinions?
Mr. Gonzalez. Let me just make some observations, Mr.
Chairman. The President's Initiative on the blueprint for the
American dream is truly designed to increase minority
homeownership by 5.5 million by the end of this decade. I think
what that did is collectively bring the agencies together,
USDA, HUD, and housing programs like the VA and any other
agency, FDIC, to provide that counseling and actually bring
these agencies together to try to address what are some of the
barriers and obstacles to homeownership.
And I'd say at this point that we are seeing some tangible
results there. I think in this case, I think what we need to do
is actually work with BIA, work with David Anderson, and try to
remove some of these barriers to homeownership on the Native
American lands.
Mr. Liu. I certainly can't speak on behalf or for the
bureau. I will echo some of the comments of Mr. Gonzalez in
regards to this I think we are having some success in certain
regional offices with BIA where we have seen some best
practices from other parts of the country and applied them. For
instance, in our office in Ashland BIA.
But I think from HUD's perspective, we certainly would
welcome involvement from Congress and working with us and
working with BIA to assist in establishing the priorities that
we think are important in regards to the need to have all of us
working together and functioning correctly so we can streamline
and get the process and get the paperwork done.
Mr. Gonzalez. If I can add one more thing. I know that
Michael and I talked about this last week, but, essentially,
the One-Stop Mortgage Initiative in Indian country, which is an
initiative with Fannie Mae and RD and BIA and HUD to try to
really come up with uniformity and processing of the
applications, and I think that could be a big help.
Chairman Ney. I think that's an issue we can look at, the
uniformity and also what we can do to help in Congress. And
then, when we get back to the Capitol, we have a follow-up
hearing with the BIA, and I think we need to ask them, you
know, this is what is stated as a backlog, why has that
happened and what can be done to correct that?
Ms. Waters. First of all, I would like to thank Mr.
Gonzalez and Mr. Liu for making up our second panel here today,
and I thank you for providing us with additional information
that helps us to understand the complexity of this problem.
It seems to me that we have resources but somehow they are
underutilized for the most part. It seems to me that some
training has gone into how to consolidate services but, again,
it may not be working as well as we would like it to work. One-
Stop, that's a great idea, and it seems to me that that should
bring all of the entities together and make it easier to
navigate these various agencies.
But let me ask about the under expenditure of the
guaranteed loan, the loan guarantee monies. It's a little bit
upsetting to know that we have funds in these loan guarantee
programs that are going underutilized. Whenever that happens,
it usually points to a problem in getting people to implement
and usually you have to do something about building capacity.
If people are underutilizing funds, it means that they need
some assistance in being able to learn how to utilize those
funds. We have discovered this in some other programs that we
have been involved in.
What have you done and what can you do to build capacity so
that these funds can be utilized rather than us sitting here
and letting them roll out over a five-year period of time?
Mr. Liu. You are absolutely right, Congresswoman. There
does need to be action steps, real steps to be taken and not
just the recognition of a problem. We have for the first time--
and I'm not going to lay the blame on anyone. Part of the buck
stops here.
We actually have begun, we have set, now, goals for
regional offices in terms of loan volume, stretch goals. We are
looking at, hoping to do a couple hundred million dollars'
worth of mortgages. If you average each mortgage at around a
hundred thousand dollars, that's really not that many
mortgages, but if you look at the mortgage market as a whole,
it's really fairly modest.
That in itself has focused attention of our managers in the
field on 184. I think even in this region here, Mr. Mecham, our
field office director, has done an excellent job in the past
six months in really going out into Indian country, alerting
tribes to this resource and working with them because now he
also knows he's going to be measured in terms of his
performance on whether or not his region is going to meet their
goals. That's one.
Number two, we have scheduled and have had a series of
regional meetings, bringing in tribes and financial
institutions, both retail and secondary market, to talk about
leveraging of funds, financing, utilizing 184 and Title VI in
real workgroup situations. Not just on a very broad basis, but
sitting down and trying to work through issues and specific
problems which are involved. Now, in those sessions, USDA has
been involved as well as BIA. So that process is going on, the
capacity building.
We are working with our partners who do provide TA to work
with us and also going out and focusing on these programs. So
there are action steps going on and we certainly hope to have
some real results by the end of this fiscal year.
Ms. Waters. Well, let me, after I finish this, let me just
say that I believe that the lending institutions would be happy
to have a 100 percent loan guarantee, or even an 80 percent
loan guarantee. And I just know that if this was better
marketed or if they really understood it, they would be
knocking down the door to get a loan guarantee.
Now, when you say that you go out to the tribes and you're
trying to put this all together, I would like to know whether
or not the tribes have the ability to either employ or contract
with consultants or others who could help expedite putting this
together and whether or not the institutions themselves are
appointing or identifying folks inside their structures who are
dedicated to bringing them more 184 or Section VI or 502 money.
Because I think they need to identify somebody inside the
institution who will spend time on this, who will learn it and
understand it and work with the implementers, whether that's
someone coming directly from the tribes or someone that they
hire to help them with it.
Can any of the dollars be used from the loan guarantee
program to actually support capacity building?
Mr. Liu. We actually have technical assistance and training
dollars and we have allocated substantial portions of those in
support of the 184 program. The tribes themselves, obviously,
do have the ability to use their grant funds to assist them.
I'm engaging in direct conversations with many banks right
now just on that topic that you are talking about, the
assigning of staff and individuals to support the interest in
the program.
Finally, we are doing a better job of learning a number of
unique features of 184 which can mitigate a lot of the
perception problems that still are associated with loans made
on tribal lands. The one specific point is that under the 184,
a lender has the option, in the event a loan craters in, in the
event of a default, a lender does not, under 184, have to
service that program to the end of the process before getting
reimbursed. The lender can assign that mortgage to HUD and HUD
will take care, then, of the servicing of that loan to
foreclosure or reassignment, which is very unique.
Ms. Waters. How long have you been talking to them about
this?
Mr. Liu. We have--well, actually, since I started, which is
about three years ago, and then on an accelerated basis, about
a year and a half ago. It takes time. It takes time.
Ms. Waters. Well, again, you have just made it even more
attractive in the way you have described, that they don't have
to service it, that they can give it to HUD.
I just don't understand, if you've been spending three
years on this, or even one and a half years, why they are not
beating down your door. I don't get it.
Mr. Gonzalez. If I may, Congresswoman Waters.
I just want to say, in terms of capacity building, that our
State offices here in Arizona and throughout this region are
doing the outreach on Native American lands and communities,
and are pretty effective at that. In fact, the Window Rock
location is actually an office that services these Native
American communities. We also do have an office I believe in
Flagstaff, and some of these are actually staffed with tribal
members that are familiar with doing business in tribal
communities.
I'll say with--one point I want to bring out is that Rural
Development does have a Five-Star Commitment that it kicked off
two years ago, and the focus of that Five-Star Commitment was
really to increase homeownership, but it was to lower the
guarantee fee, which is from two basis points to about one and
a half to make it more affordable. We were looking at doubling
the number of self-help grantees, and one of the applicants
that we actually went and saw today was the ICE effort. That
application is moving into the pre-application stage or
predevelopment stage.
But that's an example of what Rural Development is trying
to do to improve the quality of life and living conditions in
Native lands.
And last, what I heard earlier from the first panel is
talking about I believe some of the credit issues, the credit
issues in terms of homeownership. We do have a focus here,
again, specifically looking at a home buyer education effort in
terms of trying to teach people the ins and outs of
homeownership and addressing those issues.
Ms. Waters. As I understand it, and thanks to you, ICE is
doing a very good job of that. We were privileged to talk
extensively with them about what they are doing and we think
that's extremely important. We appreciate the support for that.
I'm going to turn this microphone over, but I cannot help
but ask--I want to know about this $54 million. The last $54
million at risk. I want to know how much of that money is at
its five-year point where we are going to lose it? Is that what
I understood you to say?
Mr. Liu. Yes, ma'am.
Ms. Waters. Could you please let me know? How much of the
$54 million--or is it more than $54 million that's now at a
point where it's going to have to be returned?
Mr. Liu. In the '05 budget request, there is a decision
clause that does combine for the Title VI and 184 program
amount to $54 million in rescission money at end of FY '05
should the associated credit not be used.
Ms. Waters. Mr. Chairman, I'm going to give this back to
you, but I wish somebody could continue this, see if we can do
something to keep from having to rescind these monies.
Chairman Ney. To follow up on that, another thing I--I
won't ask for the answer right here, but if we can also start
to dig into why. What went wrong, you know, where the stopping
point came or did the money go down and there's a problem with
maybe education, or the housing authorities, or was it the BIA
or--not to put a finger of blame here, but to find out why the
system is coming to a halt. I think that these questions are
important, what can we do, and also why is it happening. If we
could get down--and I know you can't determine on every single
case, but if we can get some generic pattern here of why this
is coming to a standstill?
Gentleman from Arizona.
Mr. Renzi. Thank you, Chairman.
Two questions, Mr. Liu. I first heard about the project on
the San Carlos today that you heard from Chairman Kitcheyen,
two projects which are ready to go. She asked passionately if
the Phoenix office could receive leverage in order to be able
to push through the environmental review process so we could
unlock some of the bureaucratic logjam.
Can you help address that? We also have, Debbie Ho is still
here, who represents the San Carlos, in case we can put you two
together. Could you address that for me, please?
Mr. Liu. Sure. I'll talk to Mr. Mecham and we will have our
office work more closely on the issue and take a look at
details as to why there is this hangup in the environmental
review situation.
I've heard of problems in other areas in the country. This
goes back to, I think, the streamlining and the need for
consolidation. And in the environmental review process, I think
there is a certain amount of confusion among the agencies as
well as with the tribes as to responsibilities and as to
perhaps work that may have already been done that can be used
for the actual project in question. But Mr. Mecham and his
staff will be addressing it.
Mr. Renzi. I look forward to hearing back from you on that
and seeing some results, please.
While I have you, you heard President Joe Shirley talk
about the census issue, the fact that the data has now changed,
or the way you gather the data. Is that correct? So we are
using multi-racial characteristics. You heard President Joe
Shirley talk about how he would like to see us go back.
I'm considering a legislative fix unless there is some sort
of a real justification as to why it is that we should allow
those monies to be diluted. The Navajo Nation is the largest
Native American Indian tribe in America. We have many tribes
with 138 members who have a casino that are much better off,
yet they get an equal distribution. Or you can have a person on
the east coast check that box now and the monies will go there
instead of coming here.
Can you help me?
Mr. Liu. Well, Congressman Renzi, as you know, any
information which is based on census information which is
recognized--which has been used since the beginning of the
NAHASDA, it's based on self-reporting, whether it's one box or
whether it's 15 boxes. It's self-reporting by that individual.
HUD has made the policy call based on recommendations from
staff as new information has become available, as it has under
the new census where an individual is able to check more than
one box. But that is the most expansive and most, most
expansive reading and provides greater ability for more, most
folks----
Mr. Renzi. Sir, I'm with you on the policy. But I'm asking
you now, as far as the dilution of monies, can you see here how
it's affecting the Navajo people? Obviously, how it's diluted
the monies, and the concentration would need to come here.
Mr. Liu. Well, Mr. Renzi, this issue was taken up by the
negotiated rulemaking committee, which consisted of 26 members,
including representatives from all tribes, from all regions of
the country. No consensus could be reached on this subject.
Mr. Renzi. So, what are we going to do about that?
Mr. Liu. Well, since we do recognize the tribes as
sovereign nations, and they have been the greatest purveyors of
the notion that we should go to negotiated rulemaking, it
shouldn't be left to Congress' jurisdiction, shouldn't be left
up to the administrations, it should be worked together in a
negotiated rulemaking setting, by the lack of the ability of
the tribes themselves to come to a consensus on this, I think
that's an indication that there's still need for discussion and
there is still need for the tribes to interact on this.
Mr. Renzi. I appreciate the answer. We will look at ways
that maybe we can address the issue and come up with at least
some sort of equal proportion or some sort of formula that
works.
Mr. Gonzalez, I appreciate your work. In particular, you
have, in your testimony, talked about increases that have
occurred. As you can see--and particularly in the first panel--
there is a major confidence, a self-determination among the
people. There is an independence. And much of this independence
of wanting to have homeownership is tied to the fact of the
inability of the Navajo people, the Hopi people, the Yavapai
Apache, the Apache people to have good, sustainable jobs. Good
jobs.
In order for self-determination, in order for the Navajo
people, the Hopi people, to be able to pull themselves up as
they want to do, in order to be able to help solve the housing
situation themselves, not just with government assistance but
the real answer--I mean, as was said here earlier, we're not
going to add billions of dollars to the budget in order to be
able to solve this problem. We need economic development,
particularly on the Hopi reservation and the Navajo
reservation. Part of that is being able to bring and attract
developers.
And I would like to ask you what kind of programs are
geared towards attracting developers? What kind of programs do
you know of that we could help with economic development. Real
jobs. I'll give it back to you. Thank you, Chairman.
Mr. Gonzalez. Congressman Renzi, I felt that same
confidence just during the tour today. This has been my first
visit to the Navajo Nation and to the communities we visited
today.
But Rural Development, as I see government, it plays a
catalyst in trying to encourage private sector investment, and
that is our goal. I say this, and I say it quite often, I say
that Rural Development is one of the few agencies in terms,
when you look at SBA, you look at HUD, that can actually build
a community from the ground up with infrastructure in terms of
water or waste, in terms of electric, telephone, broadband.
Then I go over to housing. It puts people in homes through a
self-help program, which is a critical program, I would think
here, to encourage that private investment. But to not only
build homes, but to build communities. I mean, I believe that's
what the people here on the Navajo Nation want, is to build
communities. Around that, you start to create economic
opportunity and you start to improve the quality of life in
this area.
And last, I will say a little bit about the programs. Those
are the guarantee programs, and I think what would work well on
the Navajo Nation would be our Intermediary Relending Program,
which is our guaranteed loan fund, value added development
grants, and renewable energy grants.
These are all tools that rural communities, including the
Navajo Nation, can use to bring economic diversity and create
those jobs that you are referring to.
Chairman Ney. Gentleman from Utah.
Mr. Matheson. I appreciate both your testimony and I just
want to ask a couple questions.
I get the impression that NAHASDA has been a positive step
in terms of housing programs, but I might ask just a quick,
open-ended question.
What would be the next step you would suggest from a
Congressional standpoint? Are there other improvements you can
make to work more efficient, have better results?
Mr. Liu. Well, addressing the guaranteed loan program, I
believe that--we are working on this and we have the mechanisms
now through internal rules and procedures, but I think if we
could open up the prospective as to the applicability of some
of these programs that may not, that aren't always tied just to
trust lands, where there is, for instance, in the 184 or Title
VI, where there is a significant accumulation of credit
authority. Native Americans, wherever they live, have a
difficult time. I think there's no question there. And I think
if we look at what we might do, and we are investigating that
in HUD, of opening up the programs where Native American
families, wherever they might reside, trust lands or not--
because there are, of course, millions of Native Americans who
don't live on a reservation--we can find reasonable ways,
certainly without taking away the focus of the trust lands, but
an ability to facilitate helping those families who don't live
on trust lands, I think that would be very helpful.
Mr. Matheson. There is talk about potentially changing the
loan guarantee, the 80 percent. Do you have any comment on
that, or what the status is of that.
Mr. Liu. The 184 is, of course, at a hundred percent. That
is set by statute and law.
The Title VI program, according to credit reform ONB
scoring, is worked at currently at an 80 percent level.
Mr. Matheson. Just to confirm, it has not always been at 80
percent.
Mr. Liu. No, it has not. It had been at a higher percentage
and there was some misinformation or miscommunication between
OMB and HUD dating back to 1999 until recently and that had to
be cleared up.
Mr. Matheson. So are you telling me that HUD is going to
lower that down to 80 percent.
Mr. Liu. Yes.
Mr. Matheson. I think that's something we ought to look at.
Mr. Gonzalez, if I could ask you a quick question. I
appreciate the efforts of the USDA and Fannie Mae in terms of
coordinating different products. I wonder if you can talk about
what USDA has been doing to promote the preservation of 515
housing stock.
Mr. Gonzalez. Congressman Matheson, good question. I'll
answer that question.
Last fall, former Under Secretary Dorr took an initiative
to look at the 515 portfolio and look at prepayment issues,
look at rehab of those properties and look at really the market
conditions. And, so, we went outside with a consultant.
We are in the stages right now of drafting a preliminary
report. We will share that with the congressional members, but
we should have the final report on the 515. Again, we are
looking at market conditions, we're looking at assessing
property conditions, and we are also looking at capitalization
requirements to see how they might impact those properties and
future new construction.
Mr. Matheson. Not that I would hold you to this statement,
but do you have a sense when the final report might be?
Mr. Gonzalez. We are looking at fall, if I had to gander a
date.
Mr. Matheson. I guess one thing that's kind of struck me
today--and maybe this is echoing what Congresswoman Waters said
before. This morning, I go and tour these facilities and I see
this crying need, and then I come here and I hear about certain
pockets of money or loan guarantees or whatnot that aren't
being fully utilized. And, to me, that doesn't add up and it
really has me wondering what we can do to overcome whatever the
obstacles or inefficiencies that are in our system. Clearly, we
are not firing on all cylinders and this isn't working, and I
think we need to figure it out.
Mr. Gonzalez. I just wanted to answer--maybe that's a
question you wanted to ask Mr. Liu, but in terms of my
observations and working in urban and rural settings, working
with HUD, BIA, USDA and Rural Development, Fannie Mae, FHOB,
and the private sector, we can go on and on, but a coordinated,
a really strong coordinated effort there at really bringing
those resources to Native American communities and leveraging
those with the private sector. And that's the road that I can
see.
But to encourage that kind of private investment is going
to mean addressing the uniformity and servicing of those loans
in terms of issues that we have with others. So that's why I
think we can make some ground and begin to address some of
those issues.
Mr. Matheson. Thank you, Mr. Chairman.
Chairman Ney. I want to thank the panel for being here
before the housing subcommittee. And with that, we will go on
to panel three. I do have to step away for about ten minutes.
Mr. Renzi will chair the subcommittee. Thank you. Panel three.
[Recess]
Mr. Renzi. We need to come to order, please. I want to
introduce the third panel who has joined us. Chairman Ney will
be coming back in just a few minutes.
Let me begin by introducing the panel. First we have with
us Pattye Green, who is the senior business manager for Native
American Housing at the Federal National Mortgage Association.
We also have with us today Freddy Hatathlie, who is a mortgage
consultant for the emerging markets at Wells Fargo Home
Mortgage. His office is here in Flagstaff. We have Renee
Konski, who is a loan officer with American Financial
Resources, Inc. Mark Maryboy, who is a delegate to the Navajo
Nation, who I consider a good friend, with the Navajo Nation
Council. He is chairman of the Navajo Transportation and
Community Development Committee and has done a lot of work for
infrastructure here on the Navajo Nation.
Lawrence Parks, a good friend who is senior vice president
of the External and Legislative Affairs for the Federal Home
Loan Bank of San Francisco. Kent Paul, who is the chief
executive officer of AMERIND Risk Management Corporation, who
handles a lot of specific issues around insurance and risk-
pooling alternatives. June Sabatinos who is the vice president
of Ambulatory Care Services at the Tuba City Regional Health
Care Corporation, who has an interesting story to tell today.
And Russell Sossamon, who serves as the chairman of the
National American Indian Housing Council.
I thank all of you for coming today. It's a large panel.
I'm going to ask you please to limit your testimony to five
minutes, no more than five minutes, so we can move through with
a lot of questions afterwards.
Ms. Green, we will begin with you. Pass the microphone,
please.
STATEMENT OF PATTYE GREEN, SENIOR BUSINESS MANAGER FOR NATIVE
AMERICAN HOUSING, FEDERAL NATIONAL MORTGAGE ASSOCIATION
Ms. Green. Thank you, Chairman Ney, Ranking Member Waters,
Congressman Renzi and Congressman Matheson.
As senior business manager for Native American Initiatives
with Fannie Mae, I assist the regional offices and partnership
offices in structuring mortgage transactions on and off trust
land. I am also a tribal member of the Choctaw Nation of
Oklahoma.
I want to thank you for inviting me to testify on the state
of homeownership on tribal lands and to commend you for your
leadership on this issue. Your concern and continued attention
are critical to the success of public and private sector
efforts to expand homeownership opportunities in the Native
American community. I am pleased to be here today to discuss
Fannie Mae's commitment to expanding homeownership in tribal
communities and to share with you the steps we are taking to
overcome the barriers to capital access on tribal lands.
Right here in Arizona, last September we worked with Navajo
Nation President Joe Shirley, Congressman Renzi and others in
putting together a $3 million Navajo community guarantee
initiative. The initiative will help approximately 60 families
on the reservations to purchase newly-built homes with
contributions from their own funds of $500 or even less. As
Chester Carl, chief executive officer of the Navajo housing
authority observed when the topic was announced, step-by-step,
we are identifying and filling gaps in the mortgage finance
system for the Navajo Nation, enabling more families to become
homeowners, which is an important first step in the creation of
wealth. I want to thank Congressman Renzi for his work and his
dedication on this project. This the kind of public-private
partnership that brings real results and innovative solutions
to housing challenges.
Fannie Mae has also worked with Dallas Massey, chairman of
the White Mountain Apache tribe, and the White Mountain Apache
housing authority to develop the Apache Dawn Development
Community, which included the first-ever use of tax-exempt
bonds by an Indian housing authority.
And over the years, Fannie Mae has also participated with
the Hopi, Gila River and Salt River Pima tribes, supporting
their efforts to provide information on how to prepare for home
purchase process.
I would like to briefly mention our internal Native
American Business Council, which convenes representatives from
our community development and our regional and partnership
offices to work together to expand our capacity to make
tangible investments that increase affordable housing
opportunities on tribal lands throughout the country. We are
building a stronger lender base by educating lenders about the
unique characteristics of lending to tribal communities. We are
teaching tribes how to leverage federal resources to support
the production of additional, affordable housing units.
As part of our 2000 American Dream commitment, Fannie Mae
vows to invest at least $350 million to serve 4,600 families on
reservations. Over the past five years, Fannie Mae has helped
over a hundred thousand Native American families purchase homes
by providing more than $14.8 billion in affordable financing.
On reservations and tribal jurisdictional lands alone, we have
invested over $640 million to serve over 7,100 families. We are
pleased that we have been able to reach 191 tribes with our
financing.
Fannie Mae has also teamed with PMI Mortgage Insurance
Company under their Gateway Cities initiative to provide
$125,000 in revolving funds for nonprofit development
corporations to build or renovate housing on the Pine Ridge
Reservation in South Dakota, and on the Acoma Pueblo in New
Mexico.
Earlier this year we announced our Expanded American Dream
Commitment, which will increase our efforts in Indian country
even further. Together with tribal leaders in partnership with
NAIHC, we are working to create a new Native American Strategic
Partnership to bring capital to Indian country, with a goal of
launching at least ten comprehensive initiatives in tribal
areas. We will also increase our investments to support tribal
housing initiatives during this decade to at least $1.25
billion serving 11,000 families on tribal reservations and
tribal jurisdictional lands.
Fannie Mae's approach to promoting homeownership in tribal
communities is two-pronged. First, we develop the right
products to optimize Native American access to homeownership,
and second, we expand housing capacity on tribal lands.
In 1999, we launched our Native American Conventional
Lending Initiative, known as NACLI, designed to make
conventional lending possible for Native Americans on trust
land and otherwise restricted lands. Through this initiative,
the full range of our low down payment mortgage products, as
well as specific accommodations responsive to the unique
circumstances of the Native American borrower, are available to
lenders working with tribal lands.
We currently have relationships with 112 lenders to make
loans to Native Americans on tribal lands. Some of our partners
are Countrywide, First Mortgage Company, Washington Mutual,
Bank One, American Financial Resources.
Fannie Mae is also working with tribes to support new
construction through investments in low-income housing tax
credit investments and collateralized revenue bonds. And we
have developed a secondary market for development loans
guaranteed by HUD under the Title VI. As a result, in 2002, we
purchased a $50 million Title VI loan which would help to build
538 units for moderate to low income families in the Cherokee
Nation of Oklahoma, the largest Title VI of NAHASDA.
Perhaps the greatest obstacle to increasing homeownership
in Indian country is the legal framework governing tribal
lands. Tribal governments have taken steps to clarify tribal
sovereignty and sovereign immunity, particularly regarding
business and housing development, but resolving this issue
requires partnership from the private and public sectors.
Fannie Mae has worked with HUD, the USDA, and Treasury to
support tribes in creating standardized documents and model
legal ordinances to support government guaranteed and
conventional mortgage activity.
We are also working closely with HUD to streamline the 184
process loans. Additionally, Fannie Mae no longer requires
tribes to make limited waivers of their sovereign immunity and
we also now provide for the mutual consent to tribal court
jurisdiction over conventional lending initiatives on tribal
trust land.
Finally, education poses a barrier to capital access for
Native Americans. Many Native Americans lack an understanding
or familiarity with banking, credit reporting or the loan
qualification process. And unsurprisingly, they have difficulty
obtaining credit through traditional means.
I hope that in hearing these commitments, you will begin to
understand the progress that Fannie Mae has begun to make in
expanding homeownership for Native Americans. Homeownership is
the key driver of economic growth and revitalization. By
expanding homeownership for Native Americans, we can not only
provide families with better housing but also with the power to
raise capital, accumulate wealth and to build a more secure
financial future.
I want to thank Chairman Ney, Ranking Member Waters,
Congressman Renzi, Congressman Matheson for their leadership
and their commitment to expanding homeownership opportunities
for Native Americans. You have been champions of developing
housing in Indian country and supporting tribal members'
efforts to revitalize their communities. I look forward to
working with you and other members of the committee. Thank you.
Mr. Renzi. Ms. Green, thank you for your testimony.
[The prepared statement of Pattye Green can be found on
page 102 in the appendix.]
Mr. Renzi. We will move now to Freddy Hatathlie of
Flagstaff. Freddie.
STATEMENT OF FREDDIE HATATHLIE, MORTGAGE CONSULTANT, EMERGING
MARKETS, WELLS FARGO MORTGAGE
Mr. Hatathlie. Good afternoon, Chairman Ney, Ranking Member
Waters, Congressman Renzi and other distinguished members of
the committee.
I am Freddy Hatathlie, a Wells Fargo Home Mortgage
consultant for Indian country initiatives. I'm a member of the
Navajo Nation who works directly with tribes in the northern
Arizona area. I would like to make some brief statements on how
Wells Fargo's goals relate to Native American lending and
respond briefly to some of the issues that were raised by the
subcommittee.
Before I continue, I would like to introduce Dave Howell,
who is the vice president of community and government
relations, and also Larry Price, who is the branch manager for
Kayenta.
For more than 25 years, Wells Fargo has recognized that
tribal nations have special financial needs. The challenge
might be the trust status of tribal land or a tribe's status as
a sovereign nation, or just the lack of standard financial
information that is traditionally required for project
financing. Wells Fargo is an experienced lender in these
questions and I believe has a strong commitment to finding
solutions and recognizing the unique status of tribal lands.
Arizona is a very important market for Wells Fargo, and I
would also note that Wells Fargo operates in 22 other states
that are home to nearly 90 percent of the federally recognized
tribes. Wells Fargo provides a full array of financial
services, including 15 full-service banking facilities located
on tribal reservations.
The subcommittee had asked for specific comments in
response to four questions that were raised, and I would like
to discuss these in turns.
What initiative has Wells Fargo taken part in or have
knowledge of to develop housing opportunities for Native
Americans.
I want to highlight some of Wells Fargo's contribution and
initiatives to promote housing activities in Indian country.
First, Wells Fargo Home Mortgage, with the help of the U.S.
Department of Housing and Urban Development, Section 184, can
originate 184 loans and conventional loans on trust land. Wells
Fargo Home Mortgage, through its housing foundation, is the
sole sponsor partnering with the Neighborhood Reinvestment
Corporation to provide a Native American community development
training program. This program started today and will be ending
Friday in Minneapolis. The curriculum includes training
programs for home buyers and counselors with an emphasis on
Native American communities.
Another area that is going to be addressed in the training
is how tribes can leverage resources for housing and
development projects in Indian communities.
Other contributions that Wells Fargo has been involved in
is making monetary contributions to nonprofit organizations
such as Navajo Partnership for Housing, Twilight Dawn, Fort
Defiance Housing Corporation and Indigenous Community
Enterprises. These monetary funds have been utilized for first-
time home buyers to assist with down payment and closing costs.
Wells Fargo also has a financial education in place which
includes distribution of Wells Fargo curriculum, a training
called Hands-On banking, a comprehensive curriculum available
free of charge. And we are pleased to, pleased to mention that
states have approved this curriculum for use in public school
systems. Wells Fargo also sponsors Individual Development
Accounts to help low-wage earners to become self-sufficient.
Question number two: Is Wells Fargo aware of the One-Stop
Mortgage initiative? Yes. Wells Fargo is and was represented
during the discussion. The initiative allowed for a uniform
voice to be heard at the tribal and federal level. The
initiative outlined the challenges and barriers, and
recommendations were made to promote homeownership for Native
Americans. Therefore, continuing this initiative would advance
the housing initiatives.
Question three: Trust land status. Does this affect the
private sector's ability to provide housing activities? Yes, it
does.
And what actions do you believe must be taken to encourage
greater homeownership opportunities for Native Americans? For
Wells Fargo, and with all lenders, we are aware of the process
and the complexity that it takes to complete a transaction on
trust land. The lenders, the family, secondary market, the BIA
and the tribe have come to realize this is not a transaction
that we can complete in 30 days which would be more relevant
for a traditional mortgage.
Just based on example, being a home mortgage consultant, I
have been working to obtain an environmental assessment and it
has been taking me about, more than a year to obtain one. And,
also, with the lease modifications that need to take place on
Navajo, it just--you submit a modification, the clients do, and
it just takes a while for this transaction to take place. And,
you know, you encourage customers, you know, what you need to
do is continue to put pressure on them how we can get this
modification complete.
And that's the key document, on the home side at least,
that initiates the mortgage process on trust land. So these are
issues that I constantly face as I work with Native Americans
obtaining homeownership.
Question number four: What changes or initiatives are
necessary to encourage private mortgage market to invest in
Native American areas.
My recommendations would be to establish and recognize a
uniform set of procedures at the BIA level. Example: I have a
colleague that I work with in Sioux Falls, South Dakota, which
is our processing center for trust land lending. And when I
constantly meet with him, you know, we describe what kind of
transactions we are doing. And what they do there is they do
cash-out refinances.
For Navajo, from personal experience, you know, this was
the first transaction that I pursued and I was not able to
succeed only because, you know, at that level, BIA had
mentioned this is something, a transaction that we cannot do.
So I know there are stages right now where they are going to
implement cash-out refinances, and I definitely believe this is
long past due.
Mr. Renzi. Freddie, can you wrap up, please?
Mr. Hatathlie. I would also like to add that Wells Fargo
Home Mortgage is designing an initiative where HMCs will be
certified to lend on trust land. Personally, I feel that this
is very important because we have lenders that are out there
and that want to do lending on trust land and have no knowledge
of what actually goes into lending on trust land. So that's
something that's very important that Wells Fargo is working on.
Another initiative, another plan that's going to take place
is Wells Fargo Home Mortgagee Emerging Markets vice president,
senior vice president will be coming out to Window Rock
Wednesday to assess the opportunities that are available on
trust land. So--which is very encouraging when you have high-
ranking people coming out.
In conclusion, I'd like to thank the subcommittee for
allowing me to address my concerns. Thank you.
Mr. Renzi. Thank you, Freddie.
[The prepared statement of Freddie Hatathlie can be found
on page 111 in the appendix.]
Mr. Renzi. Ms. Konski.
STATEMENT OF RENEE KONSKI, LOAN OFFICER, AMERICAN FINANCIAL
RESOURCES, INC.
Ms. Konski. Congressman Renzi, members of the committee, my
name is Renee Konski, and I'm a senior loan consultant with
American Financial Resources.
Thank you for the opportunity to provide comments on the
first-ever hearing on tribal land housing for Native Americans.
I'm here today on this panel with lenders and others who
individually and collectively are working to increase the
homeownership where it's needed the most.
My involvement in this area comes from a personal passion
and commitment. Lending as it stands now on Native American
trust land takes more. And by that, I mean it's more
complicated. It takes more of an expertise.
Experience and volume is what builds comfort and efficiency
and, quite frankly, we're not to that level yet. American
Financial Resources is an Arizona state loan corporation with
about--we lend in about six states. We have about ten years in
the mortgage banking business.
I, myself, have been involved in Native American lending
for the better part of four. In those four years, I have made
quite a few strides. The strides have been realized through my
partnerships and relationships. My written testimony offers
many experiences of how the Native American programs are
working. It offers a lender's perspective on how the largest
obstacle to improving housing opportunities for Native
Americans and it offers some recommendations for removing
obstacles.
I want to spend just a little bit of my time today to talk
about the partnerships and relationships that make it possible
for the dream of homeownership on trust land.
The HUD 184 program. I have used the program. I have used
the program for a purchase, I have used the program for a
refinance. The program works. USDA 502. I have used the
program. I have used the program for several tribes. The
program works.
Arizona Department of Housing. Through their commitment,
through their subcommittee meetings, has given me the education
and given me the experience to build relationships that have
made communication possible in getting my mortgages completed.
The Navajo Partnership for Housing, a nonprofit
organization that does provide families with home buyer
education, I also sit on that committee as a board member and a
member of the loan committee.
And, of course, my partnership with Fannie Mae. It's Fannie
Mae that's stood by me from the beginning when I decided that
this would be my challenge and my passion. Fannie Mae has been
my partner and my mortgages are sold directly to Fannie Mae.
In closing, let me say that while I feel I've made a lot of
strides in these areas, there is so much more we need to do.
Better communication and trust and a unique commitment for all
of us to come together will provide mortgages possible for more
Native Americans and the dream of homeownership to come true.
Thank you.
Mr. Renzi. Thank you, Renee.
[The prepared statement of Renee Konski can be found on
page 131 in the appendix.]
Mr. Renzi. We will move to the Honorable Mark Maryboy,
delegate to the Navajo Nation Council. Mark.
STATEMENT OF MARK MARYBOY, COUNCIL DELEGATE, NAVAJO NATION
COUNCIL
Mr. Maryboy. Congressmen Renzi, Matheson, Waters, thank you
for this opportunity to address you today.
As chairman of TCDC, I come before you today to initiate
what we hope will become an ongoing discussion between your
committee and Native American communities about how to craft
solutions to remedy the housing problem in Indian country.
We know the federal government is trying its best, but the
1997 GAO report on Indian housing reveals federal housing
programs in Indian country were essentially building ghettos in
tribal communities. The passage of the Native American Housing
Assistance and Self-Determination Act of 1996 has given tribes
new opportunities that have allowed the Navajo Nation to
provide low income housing for college students, elderly group
homes, traditional hogan-style homes for elders and veteran
housing. NAHASDA has given us more flexibility through its
block grant to leverage other federal funding for both housing
and infrastructure development.
However, the federal appropriations for Native American
housing are not sufficient and will never be enough as long as
the federal laws do not encourage much greater private sector
investment. The One-Stop Mortgage Initiative was successful in
implementing the HUD Section 184 program. Unfortunately, not
enough mortgage transactions are happening to meet the demands
for homeownership on the Navajo Nation.
There are a number of reasons for this. First, we simply do
not have enough banks. The Navajo Nation has only one bank
partner on the entire reservation, so there is virtually no
competition for private investment. In an area that covers 18
million acres, the Navajo Nation has only five banking
facilities. Second, lenders are unfamiliar with enforcing
mortgage or other debt instruments on tribal trust land. It is
not that it cannot be done, it is simply that they don't know
how to do it. Third, title searches are very difficult on the
Navajo Nation because title records are maintained in one BIA
office in Albuquerque, which is responsible for the records on
every reservation and pueblo within the entire southwest.
We urge Congress to amend the Community Reinvestment Act to
ensure banks use transactions from surrounding communities to
maintain acceptable investment scores. Some Federal Home Loan
Banks have standards that result in significantly more service
to Indian country. The Navajo Nation is currently served by
three Federal Home Loan Banks, two of which do not maximize the
opportunities to serve the Navajo Nation. The Navajo Nation
requests that it receives all services from the Federal Home
Loan Bank of Seattle, which has proven most helpful to the
provision of home loan banking service to the Navajo people.
And, finally, there is a question of legal jurisdiction.
The mortgage companies who are willing to lend in reservation
communities typically want to use state law to resolve any
dispute. The tribes, of course, want to use tribal laws.
Congress can help tribes and States avoid thorny federalism
issues by making private lenders' receipt of federal guarantees
contingent on such lenders availing themselves of tribal court
when they make mortgage loans on an Indian reservation.
The trust status of Indian land does affect the private
sector's ability to finance housing for Indians. However, a few
tools to overcome this challenge do exist. For example, the
Navajo Nation Trust Land Leasing Act authorized the Nation to
issue non-mineral leases within the reservation without
secretarial approval. These leasehold interests have value and
provide an equity interest that individuals can mortgage
against.
However, it is unclear whether under the 184 loan program
such a mortgage is permissible. Consequently, the Navajo Nation
is currently restricting its own leasing authority to business
site leases rather than extend its broad power to include
housing site lease.
The federal land status of the Navajo Nation is a
hinderance to housing development and homeownership. However,
it is an underlying problem that Navajo people, like all
Indians, are afraid to talk about because a recent federal case
law threatens tribal jurisdiction and sovereignty wherever the
land's trust status is altered in any way, including the grant
of right of ways.
Congress can be instrumental in forging a dialogue on this
important subject by commissioning a blue ribbon panel composed
of tribal experts to review federal case law to identify how
trust status impacts economic development, including housing
markets and homeownership in Indian country. Congress must then
be willing to listen to tribal recommendations.
Tinkering with federal initiatives today will not provide
homeownership opportunities for Indians unless Congress makes a
real commitment to curing the underlying condition that
prevents homeownership within reservations, rather than
treating a symptom. As elected tribal leader, as a tribal
member, but most importantly as a father, I ask you to make it
possible for my daughter and all Indian children to realize the
dream to own a home on the reservation. Thank you very much.
There are portions of my speech that I did not, for the
time's sake, I did not read into the record. I would request
that they be approved as part of the record, also. Thank you
very much.
Mr. Renzi. Without objection. Mr. Maryboy, thank you for
the presentation. Your witness statements and comments will be
submitted for the record without objection. I'm grateful.
[The prepared statement of Mark Maryboy can be found on
page 147 in the appendix.]
Mr. Renzi. Mr. Parks.
STATEMENT OF LAWRENCE H. PARKS, SENIOR VICE PRESIDENT, EXTERNAL
AND LEGISLATIVE AFFAIRS, FEDERAL HOME LOAN BANK OF SAN
FRANCISCO
Mr. Parks. Thanks. That's a tough act to follow your
testimony.
Good afternoon. I'm Larry Parks and I'm a senior vice
president of the Federal Home Loan Bank of San Francisco. I
want to thank you, Congressman Renzi and subcommittee.
Ranking Member Waters for having us here to talk about what
we do at the bank and what we have hopefully done to put some
tangible results on the table.
The Federal Home Loan Bank of San Francisco is the largest
of the Home Loan Banks in the Home Loan Bank system, and we are
owned by lenders located in Arizona, Nevada, and California.
The banks basically make advances, that's our core business,
which are loans, loans to member institutions which are
collateralized by mortgages. The members of the banks come from
California, Arizona and Nevada, banks, savings institutions and
credit unions, and they range in size from the largest banks in
the country, some of the largest housing lenders in the
country, to single offices.
We have a common interest. Our members use the bank as a
source of liquidity in providing funding for home loans. Access
to the bank's advances enhances lenders' ability to hold loans,
which is very important when you're dealing with character
lending as is such in Indian country. These loans are usually
loans that aren't easily salable into the secondary market and
still meet either the seasonal or cyclical demands of the
borrowing public. In effect, access to the bank's advances
takes the liquidity risk out of lending to families with the
fewest financial options.
The core business of the home loan banks is providing
advances. We provided about $500 billion in the economy as of
December 31st, 2003, and of that, as of last month, about $112
billion of that is from the San Francisco bank. It's a pretty
large entity.
A central part of the cooperative Federal Home Loan Bank
system is the Affordable Housing Program, through which the
Federal Home Loan Banks provide subsidies on loans or cash
grants to build or rehabilitate lower income housing through
the member institutions. That's a lot of jargon to say we work
with nonprofits as an intermediary with our lenders. This is a
program Congress mandated during the S&L bailout in 1989 and it
has become embraced by a lot of lenders to help meet affordable
housing needs in their communities.
The Affordable Housing Program provides grants that equal
ten percent of our annual income. So the more income we make,
the more we are able to give out in grants. What it does is
allow the pooling of resources for purchase, construction,
rehabilitation of low and moderate owner-occupied and rental
housing. The eligibility requirements for the HP grants help to
make certain they provide needed funding in a competitive
manner. AHP grants can be used to fund housing for families or
individuals with incomes at 80 percent or below loan median
income in a relevant geographical area.
In addition, 20 percent of AHP funded rental housing must
serve households with incomes of 50 percent of the are median
income and below. AHP-awarded funding is provided only through
member institutions that work in partnership with community
sponsored organizations.
The idea, I think, when Congress put this together and the
Home Loan Bank System has somewhat embraced is to make sure we
not only provide housing, but that we leave an infrastructure
of locally competitive and capacity built nonprofit insitutions
and communities as well.
Since 1990, the San Francisco Bank has provided $312
million in AHP assistance to 2,400 projects, rental and
homeowner opportunities for 60,000 households. Through the AHP,
a cross-section of lenders, developers, community-based
organizations and local housing agencies work to create
affordable housing. In 2003, the last year that's most
relevant, the San Francisco Bank provided $36 million in AHP
funding through its members to 103 projects that were awarded
competitively. Member banks teamed up with nonprofit and for-
profit developers to develop project plans and submitted them
to the San Francisco Bank's AHP process which scores and ranks
them. The AHP subsidy has been used for things like on-site
services made available to residents such as daycare centers,
counseling and job training, computer learning centers and the
need for the subsidy to complete the project.
In Arizona, the winning 2003 projects were located in Pima,
Yuma, Santa Cruz, Cochise and Maricopa counties, receiving $5
million in subsidies from the Home Loan Bank. And the member
institutions included Bank of America, Canyon Community Bank,
Johnson Bank Arizona and BankUSA. Projects included ranged from
$20 million in Phoenix for transitional housing for very low
income Native Americans and people with special needs,
Whispering Pines Apartments, to 61 new single-family homes for
low to moderate income, first-time home buyers in Nogales.
In addition to housing, Whispering Pines will include a
kitchen and services for the residents such as employment
training and counseling, health and youth programs and child
daycare. The Pena Blanca Village homeownership project will
include pre- and post-purchase homeownership counseling, a
community facility and child daycare.
The primary source of the activity by the San Francisco
Bank in Native American communities is through the Affordable
Housing Program, and that's why I was focusing on it. Since the
program's inception, seven projects on Native American lands
have been approved for grants by the San Francisco Bank. These
projects provide 282 units of affordable rental housing and 18
units of affordable ownership housing, resulting in attractive,
sound shelter for 300 families.
The funding by the San Francisco Bank of AHP projects on
Native lands has not been without difficulty, primarily because
of the unique legal status of tribes and their lands. The
sovereignty of Native American lands and their trust status
create legal problems for traditional methods of housing
finance. That is, traditionally, lenders place a lien and have
the ability to take possession of or sell the property to
satisfy the lien. Generally, this tool is not available on
tribal lands.
The San Francisco Bank is committed to working with the
Native American community to find solutions to issues that
plague lending on tribal lands. Differences in tribal laws and
sovereignty constraints make an across-the-board prescriptive
solution for Tribal Native American lending nearly impossible.
But I do have some good news, as Congressman Renzi well
knows, and that was that balancing Native American sovereignty
issues and the lien and foreclosure questions that the bank and
its members often face is a challenge to provide a mortgage
credit on tribal lands, but we were able to meet that
challenge.
For instance, in 1999 and 2000, the San Francisco Bank
approved direct AHP subsidies for three rental housing projects
on tribal trust lands leased to the project owner by the tribe.
At that time, the Federal Housing Finance Board's AHP
regulations, that's our regulator, seemed to require that a
lien be taken to secure any AHP repayment obligation that might
arise in the event of noncompliance with the AHP requirements,
including the sale or refinancing of the project.
In order to fund these projects and not violate federal
regulations governing the Home Loan Banks, the San Francisco
Bank sought a regulatory interpretation from our regulator, the
Federal Housing Finance Board, that would clarify that
mechanisms other than a lien on the property could be used to
secure the AHP repayment obligations. After negotiating with
the regulator over a protracted period, in 2003, the San
Francisco Bank received a favorable answer, and that's how we
were able to fund these projects. These projects are now
finally underway.
The Bank continues to work with trade groups and other
collaboratives to find creative solutions to address lenders'
needs and the rights of tribes on their land. For instance, the
Bank works with the National American Indian Housing Council
and participated in the development of the One-Stop mortgage
process that was talked about earlier to streamline mortgage
lending. Obviously, we think that one small step--we would like
to take many more steps but we would like to build from what we
were able to get accomplished with the Federal Housing Finance
Board.
With that, I thank you for letting me participate and look
forward to any questions you have.
[The prepared statement of Lawrence H. Parks can be found
on page 150 in the appendix.]
Chairman Ney. Thank you.
Mr. Paul.
STATEMENT OF KENT E. PAUL, CHIEF EXECUTIVE OFFICER, AMERIND
RISK MANAGEMENT CORPORATION
Mr. Paul. Thank you, Chairman Ney and distinguished members
of the subcommittee to share my concerns regarding the
significant impediments to improving housing opportunities for
Native Americans.
My name is Kent Paul, and I am the Chief Executive Officer
of AMERIND Risk Corporation, a federal corporation owned and
operated by a consortium of Indian tribes and Indian housing
authorities, which pool their financial resources to provide
self-insurance coverage to protect Indian housing,
infrastructure, and individuals and families in Indian country.
My testimony will address two specific topics. First, the
inadequacy of affordable and available insurance coverage for
homeowners in Indian country and its impact on home mortgages;
second, the important role AMERIND plays in protecting Indian
housing and the impediments restricting AMERIND's ability to
provide even more protection.
The lack of affordable or available insurance. In urban and
suburban America, insurance for the most part is readily
available from over 1,600 insurance companies. The opposite is
true in Indian country. To date, less than five insurance
companies provide products or services that meet the needs of
Indian communities, tribal governments, reservation businesses
and Indian housing.
Since September 11th, 2001, the affordability and
availability of insurance in Indian country has deteriorated.
In our society, insurance is the oil that lubricates and
protects our economic engine. Without insurance, banks will not
loan money; consequently, money for investing in new economic
enterprises would stay in the bank rather than becoming risk
capital; business owners would be hesitant to conduct business;
and autos would be parked in the garage.
Why does the private sector turn its back on Indian
country? There are several reasons:
One, perceived lack of profit potential due to remoteness
of Indian communities, lack of water and inadequate fire
protection; two, insufficient number of insurance agents
servicing Indian country; three, misunderstanding and fear of
tribal sovereignty and tribal courts; lack of uniform tribal
commercial laws or business codes amongst the 550 plus
federally recognized tribes and an overall perception of Native
Americans as poor, unemployed, uneducated and unhealthy.
In any given month, various federal agencies, lending
institutions or Indian organizations will provide a seminar or
technical assistance programs on the topics of homeownership,
mortgage lending, HUD 184 programs, Title VI programs or tax
credit projects. Few, if any, of these seminars or programs
discuss the role of insurance and financial protection in
homeownership; yet, without such coverage, lending will never
be provided.
In my opinion, this has been one of the major stumbling
blocks to homeownership in Indian country. Consideration needs
to be given to ``incent'' the insurance industry to target
Indian country, similar to what banks were under--in the
Reorganization Act, or Reinvestment Act, or we need to broaden
the 1986 Act to foster more risk pools such as AMERIND.
There is a conflict between the state's oversight of
insurance, McCarren Ferguson, and the federal government's role
and responsibility of providing affordable, sustainable housing
in Indian country.
Some additional recommendations would be to streamline the
lending process. Banks unfairly perceive too much difficulty in
lending to Native Americans than to non-Natives. There ought to
be an established, uniform set of rules or procedures. We need
to find ways to minimize the tribes' need to waive sovereignty
as part of the lending process. And, last, allow tribes to
validate clear title to trust land within their communities
with the BIA providing a supporting role rather than a primary
role.
The second topic of my testimony is the important role
AMERIND has played to encourage homeownership and protecting
Indian communities. As I mentioned earlier, AMERIND is a
federal corporation owned and operated by a consortium of
Indian tribes and Indian Housing Authorities that are dedicated
to protecting themselves and their tribal families. AMERIND is
owned by 217 tribes and Indian housing authorities,
representing over 550 federally recognized tribes from 32
states. AMERIND operates purely on a nonprofit basis. Since its
formation in 1986, AMERIND has paid well over $125 million in
Indian housing related liability and property claims while at
the same time saving tribes and housing development--Housing
and Urban Development Department over $100 million in premiums.
We have protected more than 70,000 individual homes, more than
six and a half billion dollars in property. We provide better
terms, conditions, and coverage at nearly one-third the cost of
comparable commercial insurance. We've remained financially
stable during difficult market conditions and we provide self-
insurance coverage for Indian tribes and IHAs located in rural
Indian communities where commercial insurance companies have
refused to provide coverage.
AMERIND, therefore, is an example of the kind of tribal
self-determination that Congress intended to foster when it
enacted NAHASDA under 25 U.S.C. 4131.
There are three basic impediments that keep AMERIND from
doing more, and we are prepared to do considerably more in
Indian country. In Indian country, insurance coverage is often
unavailable because of the commercial insurance industries'
general lack of interest in doing business there. Tribes and
IHAs have recently demonstrated to HUD and Assistant Secretary
Michael Liu that, but for AMERIND, insurance for federally-
subsidized Indian housing in Indian country would be either
unavailable or exorbitantly expensive. This finding corresponds
to the reasons why Congress, in the 1991 and the 1992 HUD
Appropriations Act, chose to support Indian housing risk pools
and to remove counterproductive regulatory barriers to their
ability to provide low-cost self-insurance coverage for
federally-subsidized Indian housing.
The first impediment is a lack of housing risk pool
regulations, and AMERIND is the only Indian Housing Risk Pool
in existence and has the distinct status of operating as a
federal corporation under Section 17 of the Indian
Reorganization Act. All other risk pools, which there are more
than 400, are creatures of state law and oversight. Congress
intended the creation of housing risk pools as an alternative
insurance mechanism and instructed the HUD secretary to issue
regulations regarding the same. To date, no such regulations
exist.
AMERIND has been working with the HUD secretary and staff
to reinstitute rules that were in place under the 1937 Housing
Act. AMERIND consistently complied with those rules and
regulations until they were withdrawn in 1997 with the passage
of NAHASDA. Since 1997, there have been no specific rules that
address the requirements of an approved plan of self-insurance
for Indian housing risk pools, which places AMERIND in a
difficult position. Having no standards by which to judge
ourselves causes banks, lending institutions and others to
question our viability as a provider of property protection
even with HUD's recognition and approval of AMERIND as a
provider of self-insurance for Indian housing.
Number two, federal preemption of state insurance law.
Currently, the greatest threat to the continued existence of
nonprofit, self-funded Indian housing risk pools, such as
AMERIND, is not state or federal competitive-bidding
requirements, but is unbridled state and tribal insurance
regulations. AMERIND currently works in 32 states, representing
over 500 tribes. If these states and tribes are permitted to
impose their conflicting regulatory schemes and taxes on a
nonprofit, self-funded risk pool, the ability of those pools to
carry out their congressional mandate to provide low-cost
coverage for federally-subsidized Indian housing will be
seriously impaired.
AMERIND and the National American Indian Housing Council
have therefore requested HUD implement a new regulation
establishing uniform federal standards for self-insurance
plans.
And the last is number three, a memo of understanding. A
great deal of effort has been made to develop coordination
between federal departments regarding the One-Stop Shop
Mortgage initiative. One failure of the initiative has been to
recognize approved providers among the various departments. As
indicated earlier, AMERIND is the market of last resort in many
Indian communities. Very few, if any, for-profit insurance
companies readily offer affordable insurance products in Indian
country. For this reason, AMERIND is forced to try and respond
to the ever increasing need. We would strongly encourage a memo
of understanding between the various federal departments,
Fannie Mae and Freddie Mac, that approve the hazard protection
afforded by AMERIND. Once specific regulations are established
by HUD and AMERIND is deemed to be an approved plan of self-
insurance, this approval should be adequate for USDA Rural
Development, the Veteran's Administration, and the two largest
buyers of mortgages, Fannie Mae and Freddie Mac.
This concludes my remarks.
[The prepared statement of Kent E. Paul can be found on
page 153 in the appendix.]
Chairman Ney. Thank you, Mr. Paul.
Next is Captain June Sabatinos.
STATEMENT OF CAPTAIN JUNE SABATINOS, VICE PRESIDENT, AMBULATORY
CARE SERVICES, TUBA CITY REGIONAL HEALTH CARE CORPORATION
Ms. Sabatinos. Good afternoon, and welcome to Tuba City.
I'm Captain June Sabatinos, vice president of ambulatory care
services at the Tuba City Regional Health Care Corporation.
At this time, I would like to introduce our board chair,
Eunice Begay; Lena Fowler, who is a board member; and our chief
executive officer of the hospital, Mr. Kirk Gray.
I appear before you today on behalf of our organization and
I especially appreciate that you were able to go out this
morning and visit some of our people in their homes. I'm going
to present a slightly different picture for you today, and that
is when people have inadequate housing, at some point or other,
their healthcare is going to be greatly impacted.
So, I appear before you today on behalf of our
organization, which just a year and a half ago was a federal
Indian Health Service medical center. Many of our staff
continue their federal service through memorandum of agreement
with the IHS, but our hospital is now a nonprofit tribal
organization, and it is our goal to become a community hospital
one day.
Through the Federal Indian Self-Determination Act, Public
Law 93-638, our eight-member, all-Indian board of directors
separated from the federal government for one specific reason:
To bring decision-making about healthcare needs back to the
local level where services are provided.
Historically, the federal government has fulfilled its
trust responsibility to provide healthcare to Navajos and Hopis
since the 1920s. A little house that still stands on Main
Street under the cottonwood trees served as the first, six-bed
clinic. The first actual hospital, also on Main Street, was
built in the 1950s. Our second and third hospitals, which we
still use, were built in the '60s and '70s. Today, we are a 73-
bed, acute care facility with more than 60 physicians on staff
and a total of 749 employees. Throughout the years, Tuba City
earned a national reputation for exemplary healthcare within
the IHS system. Many of our medical and administrative staff
have been with us for 20 years or longer. We serve a current
population of more than 35,000 from 11 Indian communities.
Fortunately, our independent status now allows us the
freedom to hire more staff as our needs demand. Just last year,
our board of directors hired our chief executive officer who
brings with him more than 30 years' of experience in healthcare
administration. We have also hired our first chief financial
officer, a human resources director, a new information
technology officer, a new operating room manager, and many
others. In fact, my husband and I just recently joined the
staff just four weeks ago, transferring from Washington D.C.
I'm here today to inform you of one of our most pressing
needs, and that is housing for our hospital staff. If you
travelled here from the airport or a motel in Flagstaff, you
probably noted the stark beauty of the changing landscape. Most
significantly, you traveled at least 75 miles on one of
Arizona's most dangerous highways. Every day, approximately 50
to 60 of our employees make the same journey twice a day. Each
travels 750 miles per week just to come to work.
The reason our staff, Indian and non-Indian staff alike,
spend three hours a day driving, carpooling or taking our
hospital van is because we do not have quarters to house them.
I appear before you today to ask that you assist us in
acquiring additional housing in order for us to meet the
expanding healthcare needs of our Indian population. Currently,
our organization has 258 housing units that are 30 to 40 years
old. As vacancies occur, asbestos abatement has to be done.
That makes the housing safer for staff but it also increases
the waiting time for housing applicants. We currently have no
available housing, no vacancies, yet 34 current or potential
employees are on a waiting list for housing, and that wait
ranges from two to six months.
Since September of 2003, it has become common practice for
us to house new employees at the local motels until housing is
available. Currently, ten employees live in a motel. As a
result of this situation, we have lost a large number of very
necessary potential employees. For instance, our laboratory
currently has eight medical technologist vacancies. During the
past two months, we have lost three potential employees because
they have families and they just could not bear the thought of
having to spend months in a motel with children.
Currently, there are 16 registered nurse vacancies. If you
think that the nursing shortage is bad in the metropolitan
areas, it's even more difficult to attract nurses to remote
areas. Within the next six weeks, we expect five RNs to start
employment and they will be housed in local motels until
housing is available. During the past two months, we have lost
five registered nurses because of our housing, and three of
them were very badly needed operating room nurses.
With the anticipated expansion of our facility and
services, it's projected that we will require an additional 150
two- to four-bedroom housing units at an estimated cost of $6
million to house current and projected employees. We would love
to have a housing complex like the beautiful housing complex
that the Apaches were showing us pictures of earlier testimony.
Our experience has been that when housing is available for
our staff, they tend to stay in Tuba City for their entire work
career. The large number of professionals who have stayed with
us for 20 or more years demonstrates their commitment. It's not
easy to come to an area like this to provide healthcare. The
people who come are very dedicated. They fall in love with the
area and with the people.
Our housing shortage severely hinders us in recruitment and
retention of staff. Because we are on a reservation here in
Tuba City, each governmental institution has its own housing
complex for its own employees. For instance, the public school
district has its own teachers' housing. The Bureau of Indian
Affairs has its own employee housing. As a former IHS facility,
we have the housing that was available for IHS employees.
Although the Navajo Housing Authority has low-rent housing in
Tuba City, our staff does not generally qualify for its use
because of their income level or not being Navajo or not being
Native American. Because there is simply not much land
available locally to be developed, there is no opportunity for
entrepreneurs to build rental housing to meet community needs.
If all of the professionals working in Tuba City working
for the various agencies were able to be housed here, it would
create a substantial income base for the Navajo Nation and an
incentive for business enterprises to locate here.
In summary, community housing is extremely necessary, but
housing for our professional staff is equally as important. It
is estimated that a 150 2-3 bedroom complex will cost us $6
million to provide housing for our staff. I ask you, is there a
way for us to obtain housing for our staff? We generally don't
meet the guidelines for housing on Indian reservations. As we
expand our healthcare system to meet the demand that we have,
it's critical that we have the necessary staff to do this. We
cannot meet their demands if we don't have adequate staff. If
we don't have adequate housing, we cannot meet the needs of the
healthcare professionals.
Thank you for offering us the opportunity to testify today,
and we hope that we have provided the committee with the
essence of our housing dilemma for healthcare--for housing for
our healthcare staff. Thank you.
Chairman Ney. Thank you, Captain Sabatinos.
[The prepared statement of June Sabatinos can be found on
page 164 in the appendix.]
Chairman Ney. Mr. Sossamon.
STATEMENT OF RUSSELL SOSSAMON, CHAIRMAN, NATIONAL AMERICAN
INDIAN HOUSING COUNCIL
Mr. Sossamon. Chairman Ney, Ranking Member Waters,
Congressman Renzi, Congressman Matheson, on behalf of the
members of the National American Indian Housing Council and its
board of directors, I would like to thank you for this
opportunity to participate in the first-ever Congressional
field hearing in Indian country.
As the only national organization dedicated solely to
Native American housing, development and advocacy, you can
imagine how pleased NAIHC was when you brought this idea
forward. My name is Russell Sossamon, and I'm both the Chairman
of the National American Indian Housing Council and the
Executive Director for the housing authority of the Choctaw
Nation of Oklahoma.
Today, I would like to focus on the legislative initiatives
we hope this committee will support as well as some of the
issues raised by the committee in preparing for this hearing.
The passage of the Native American Housing Assistance and
Self-Determination Act, NAHASDA, in 1996 was a giant step
forward for Indian housing and the amendments passed in the
last Congress with the help of this committee moved us forward
toward the goal of providing quality housing for Native
Americans. However, challenges remain. For the fourth year in a
row, the proposed NAHASDA block grant does not include any
increase to reflect inflation in housing prices, increased
construction costs, or a growing Indian population. The '05
proposal also zeros out the Rural Housing and Economic
Development Program, about $25 million that about 96 entities
took advantage of last year, approximately 30 of which were in
Indian country.
It also zeros out about $2.5 million for NAIHC to continue
to provide its technical assistance and training specifically
for tribes, which is designed to build tribal capacity so that
they can fully utilize the resources that are available and be
creative in financing to meet the housing needs of their tribal
peoples.
You heard mentioned earlier about the momentum that's
growing in Indian country and about the progress that's being
made to achieve and bring private financing to tribal areas.
And you also heard discussed the real possibility of recision
of loan guarantee authority. Now is not the time to rescind
that authority. We have seen this progress being made over the
last three years, and it's a direct result of all the efforts
of the people that have been before you here today and are
still before you. These efforts are just about to come to
fruition, so to eliminate funding or underfund these efforts
would be to set us back on what's already been gained.
If you look at it, the mortgage industry has had to be
created in Indian country, and we have identified specific
barriers. We have narrowed them down to just a few barriers and
we have overcome several of them, so now is not the time to
pull back.
Also, this flat funding level for NAHASDA makes it all the
more important. The tribes who administer this housing program
do it as efficiently and flexibly as possible to meet the
requirement for data on the effectiveness of the program to
insure that our goals are being met and that progress is being
made. Second, the short history of NAHASDA also requires us to
continue to amend the statute to improve upon what works and
eliminate the parts that hinder the delivery of housing.
We understand that Congress has been frustrated with the
lack of hard data to support the yearly budget requests for
housing. As was pointed out by the chairman, when Congress
looks at what we have, all of this money appropriated and then
looks at the spend out rates, we share your frustration. You
may be aware that last year, HUD's Office of Native American
Programs, ONAP, underwent a performance assessment from the
Office of Management and Budget. ONAP received a poor score due
mainly to its lack and therefore its inability to measure
performance, its lack of data and its inability, therefore, to
measure performance. Rather than through performance itself. We
had hoped this would lead to swift implementation of data
collection systems that would allow tribes--to allow for what
tribes already know, that this program is working. HUD collects
data yearly on Indian housing plans and annual performance
reports on such items as the number of overcrowded units, the
number of units constructed, the number of housing units
rehabilitated.
Unfortunately, HUD still does not have a data base that can
pull this data together to give a national picture. This is
another symptom of what we see as being a real problem. There
needs to be an upgrade in the standardization of not only the
computer hardware but the programs used by agencies and that
can be accessed and utilized by the private sector at the
tribes' request.
While NAHASDA has improved the ability of tribes to serve
the housing needs of their tribal members, several requirements
of the Act have continued to hamper progress. In response to a
call for overall federal housing delivery to Native Americans,
Senator Tim Johnson of South Dakota introduced the Native
American Housing Enhancement Act of October 2003, which is now
cosponsored by Senator Michael Enzi from Wyoming. The bill
contains the following provisions:
It amends the 1949 Housing Act which governs USDA housing
programs to allow the tribes the same rights to Indian
preference as HUD housing programs. It reestablishes the
eligibility for tribes in HUD's Youth Build program. It amends
NAHASDA to allow for the establishment of operating reserve
accounts for tribes. A technical correction for the treatment
of program income under NAHASDA. It also amends NAHASDA to
allow for replacing the requirement of charging no more than 30
percent of adjusted income to a ceiling of fair market rents.
As the committee with jurisdiction over Indian housing
legislation in the House of Representatives, we hope the
Financial Services Committee will support the passage of this
legislation before the end of the 108th Congress. This
committee has raised several specific issues with NAIHC in
preparation for this hearing that were addressed in our
detailed written testimony. We are encouraged that two
questions have focused on two of the areas that are critical to
the success of housing programs, partnerships and leveraging of
the first programs and challenges of achieving higher levels of
homeownership. With the federal government's main Indian
housing program, the Native American Housing Block Grant, only
able to produce about 5,000 new units per year nationally,
looking to other partnerships is the only way that people can
hope to make progress.
And, in fact, the very structure of NAHASDA has a lot to do
with an increase in partnership and leveraging. Indian country
stands out in its extreme level of need and warrants the
investment of resources that can fund a more aggressive and
comprehensive approach to solving our problems.
New initiatives in Indian country over the past five years
are to numerous to be recorded here, but a list of the partners
involved in the provision of Indian housing was included in our
written testimony.
Finally, the goal of homeownership is as important to
Native Americans as it is to all Americans. Native Americans,
with the complications associated with land held in trust and
the limited although improving access to financial
institutions, have not been historically successful in
obtaining mortgages for homes on reservation. We applaud the
One-Stop Mortgage Initiative as a step in the right direction
and feel that the educational initiatives are vital for both
tribes and financial institutions to not only address the
complications of doing business on the reservation, but also to
see the opportunities.
Before I leave, I'll just remind you of a few things that
you're probably already aware of but I think are very important
and worth mentioning.
Housing has to be approached on a spectrum. Not all folks
are in a position to be homeowners. They are not ready for
mortgages. And the very low income people need heavily
subsidized housing assistance, and that requires substantial
investment. But, it's also our desire to move these folks up on
this spectrum of housing, to take them and develop with them
their individual housing plans, which is also connected to
their economic well-being.
So, while we focus and hear a lot about mortgage financing,
let's not forget those who will need more heavily subsidized
housing assistance, sometimes as transitory assistance but
sometimes as permanent assistance. So I would like to continue
to point that out.
Another thing is when we talk about housing, remember, it's
the third thing that's listed on the basic hierarchy of human
need: Food, clothing and shelter. And as was pointed out
earlier, it discounts our efforts in other areas such as
education, healthcare, crime prevention and family development
if housing is not available. So, what's needed is an adequate
investment, federal investment as well as private investment,
in Indian country. And if we put up the investment up front, if
we can make that investment in the future, it's going to reduce
the federal cost burden and will also lead to economic security
in Indian areas.
Thank you. I will be glad to answer any questions.
[The prepared statement of Russell Sossamon can be found on
page 178 in the appendix.]
Chairman Ney. Thank you, panel.
I had a question for Mr. Paul on the McCarren Ferguson just
to clarify. Are you saying that the state regulatory process is
hampering the ability to properly do business?
Mr. Paul. As respects Indian country, McCarren.
Ferguson has an impact on Alaska and Oklahoma because they
are people reservations, they are not land-based reservations.
So it's tough to distinguish the authority of a tribe to
exercise its sovereignty in the area of risk pooling insurance
in those two states. So from that extent, it's a problem.
Chairman Ney. As you're aware, we have a federal charter
bill that's starting to wind its way through the House
committee. Would you see that the federal charter bill, if it
passed, would be a help or would it not be?
Mr. Paul. It would be of help if it has specific
information relative to Indian country and recognizes the
tribes' abilities to create insurance law.
One of the problems that we see of being the only
organization providing hazard protection is a lack of uniform
insurance code within Indian country. And with federal help,
that would be nice to have that so it's consistent. Or for
anybody that does business in Indian country.
Chairman Ney. Thank you.
Ms. Waters. I would like to thank the panel for the time
that you have spent with us today, the information that you
shared with us. And I suppose if we had a couple more weeks to
spend here, we could have a real in-depth conversation with you
about all of this information that you have shared with us
today.
I'm going to attempt to ask a few questions of several of
you, and I'm going to try and make my questions as concise as I
possibly can. And I'm not going to require long answers, and I
would hope that you could respond quickly so I could turn the
microphone over.
For Fannie Mae, I work very closely with Fannie Mae and I
like the fact that they now have the flexibility to have
partnerships that can do a lot of creative and innovative
things. I want to ask you, given that Fannie Mae has purchased
these mortgages on the secondary market and they appear to be
working with organizations such as Ms. Konski has identified,
because you are so connected to over 112 banks, you have some
influence there, why can't you help to get more banks
interested in providing mortgages on the reservation?
Ms. Green. Congresswoman Waters, I think it is an education
process, and that's what we're working through with our Native
American Business Council, with our partnership offices that
are on the ground working with the lenders on a daily basis, is
to educate them more about the process of lending on Native
American lands.
Ms. Waters. Okay. That's good. And what I think probably
could happen is given the level of influence you have with
these banks, because you're picking up the mortgages on the
secondary market, it perhaps would be helpful to identify how
you do this, whether it be through holding seminars, or
identify maybe 50 to a hundred, have them identify individuals
in the banks who will make this a specialty and learn about it
so that each of these institutions will have someone that can
implement that. I just want to kind of put that into your
thinking.
Wells Fargo, how many mortgages have you made here?
Mr. Hatathlie. Is that in reference to the Navajo Nation?
Ms. Waters. I beg your pardon?
Mr. Hatathlie. Reference the Navajo Nation?
Ms. Waters. Yes.
Mr. Hatathlie. With the Navajo Nation, recently the Carigan
Development Project in Window Rock, St. Michaels, Arizona, we
have closed 39 184s and four conventional loans. However,
that's fee lands where we can utilize 184 mortgage product.
Ms. Waters. What lands?
Mr. Hatathlie. Fee land. It's fee land surrounded by Indian
operating area, so it allows us to utilize the 184 program.
Ms. Waters. I'm really talking about where it's most
difficult to do it where it's trust land.
Mr. Hatathlie. Trust land, we have three transactions that
we are about to----
Ms. Waters. I can't hear you.
Mr. Hatathlie. Trust land, we have about three transactions
about to complete here in Tuba City, which would be a purchase
of an existing home, construction to perm financing and--two
construction to permanent financing. So three in Tuba City.
Ms. Waters. I really do appreciate all of the education
that you described and the kind of outreach that you're doing,
but at some point in time, it really does have to resolve the
matter of mortgages in order to move this agenda.
Miss Konski, how do you do it? Can you help us to
understand--I have heard some contradictions here today about
the ability to make these mortgages based on the land trust
questions and whether or not there's one law, tribal law, to
deal with foreclosures and all of that. How do you do it?
Ms. Konski. Well, obviously, that's the first thing I do
look at, is making sure that the tribe is familiar with the
One-Stop and also approved that initiative.
I'm sure that the jurisdictions are in place should that
become necessary. Okay? So that's the very first thing that has
to happen.
The next thing that I have to look at is obviously making
sure that the family is really ready to purchase, to qualify
for that mortgage, whatever product I'm choosing. Once I
sometimes know that I have that family ready, I then need to
look at the issues that come with the particular land that they
are going to buy.
Ms. Waters. Well, what I'm hearing and reading and I'm
picking up on is there are a lot of denial and turndown rates
in Indian country, Navajo Nation. And someone told me earlier
today that some of the turndowns, when you look at them, they
look as if they would qualify for conventional loans but they
are turned down. And what's absolutely remarkable on some
information I just saw is that the foreclosure rate is very
low.
So what is happening here?
Ms. Konski. I can't answer that because I don't have that
many turndowns. My issues don't come down to the family not
qualifying for the loan, not when you have that many products
and that many funds available to help families. When you put
together a combination of, say, NAHASDA funds or the Relocation
Act funds, mortgages are possible. Products are possible. I
don't have that many turndowns.
One of the things I always tell my family when I begin to
work is I can only work as hard as they can work. Sometimes it
does take time. In my opinion, the challenges for me come
specifically with getting the information from the BIA.
Ms. Waters. BIA is your biggest obstacle?
Ms. Konski. Yes. Biggest obstacle for me is BIA.
Ms. Waters. So it is possible to do. And if we could
expedite the issues with BIA, you could do even better.
Ms. Konski. Particularly if you could expedite the issues
with BIA.
Ms. Waters. I understand that you had a recent number of
closings.
Ms. Konski. Recently, as recently as last week, Friday, I
did in fact close nine separate loans for the Cocopah Indian
Housing Authority and Development, located in Summerton,
Arizona. That represented four tri-plexes and five single-
family units, all put together with the Cocopah Indian Housing
Development as the borrower. The tribe themselves did the
interim financing. My 184 product came in and paid off the
permanent loan, paid off the interim financing for the
permanent 30-year mortgage.
Ms. Waters. If it wasn't for the fact that this was a
competitive business, I would ask you to teach Wells Fargo and
some of the others how to do this. But I know it's competitive,
but I am really interested in trying to get that information to
others.
Mr. Maryboy, your testimony centered a lot around the need
for the private sector to be more involved. But as I see it,
the private sector needs to want to be involved. They need to
want to do this.
Do you have any suggestions for how to get the private
sector more interested?
Mr. Maryboy. The particular area that you are alluding to
is a challenge for the Navajo Nation, and I'm asking Congress
to establish a bylaw and to establish a blue ribbon commission
to discuss or to research this particular area. But we do
believe that there needs to be--this is a problem and a
solution needs to be provided in this area.
Ms. Waters. That's because you think there is some fear of
jeopardizing trust lands by getting the private sector
involved, and I think there was some reference to how they did
it in Palm Springs? Is that what you're talking about?
Mr. Maryboy. Something similar like that.
Ms. Waters. Mr. Parks, there seems to be some contradiction
in your testimony about the inability to get involved in
picking up the secondary mortgages, I guess, because of the
land trust issue. I think there was some discussion in your
testimony that you didn't do it.
So what's the contradiction here?
Mr. Parks. I wouldn't think of it a contradiction, but what
I was trying to do from my testimony was to tell you that we
had some limited success but it remains a tough thing because
we are dealing with this narrow slice of the Affordable Housing
Program. It doesn't mean that the other regulators are
necessarily going to pick up on the regulatory interpretation
of the Federal Housing Finance Board.
And so a lot of the lenders will say, gee, okay, in the
case of the Affordable Housing Program, your regulator was
allowing you to take something other than title in sovereignty.
It's not necessarily the position of OTS, FDIC, or OCC. So when
a lender goes to get examined, for instance, there they still
may be obstacles they have to overcome.
Ms. Waters. So the 38 banks that you have some influence on
may have a way to do it if we can clear the way.
Mr. Parks. Sure. I think it still remains one of those
fertile grounds. I think what we have right now is the
opportunity to build upon something that's been done through
the help of the Federal Housing Finance Board.
Ms. Waters. Mr. Paul, you referred to a memo of
understanding, since you are the market of last resort, and
since Fannie Mae has given you some kind of acceptance, you're
asking why can't you have this memorandum of understanding
because you are willing to do it and lot of others are not.
What would you have us do?
Mr. Paul. Correct. It was nice of Fannie Mae to give us a
national recognition. Part of the problem in Indian country is
we deal with a lot of different lending institutions. And when
we are dealing with small community banks or Federal Home Loan
Bank or Fannie Mae, we have to go out and consult with them to
try and to get them to approve us because we are not an
insurance company. We are a self-insurance pool owned by the
tribes.
With the approval of Fannie Mae, which reviewed our
financial position and has graciously accepted our Indian
mortgages purchased on their behalf in which we provide hazard
insurance, we were hoping to leverage that with USDA Rural
Development, with the Veteran's Administration and the other
lenders so that we have one national letter through a mutual
understanding between the various departments so it would
preclude us from having to go out and deal with every local
institution that loaned money and where we provided hazard
protection in Indian country. It would be a cost-effective
measure.
Ms. Waters. Thank you.
Miss Sabatinos, I appreciate your testimony but I wanted to
get over to Mr. Sossamon to ask about funding.
You believe the key to our ability to develop more housing
is the federal government's commitment for funding. Would you
just tell us one more time?
Mr. Sossamon. Absolutely. Well, beyond the treaty
commitments, which I think the treaty commitments were designed
to--the federal government had promised to assist Indian
tribes, not take us on as welfare recipients.
What we need is, what you see happening in other states and
communities, is enough commitment from the federal government
to develop our own infrastructure, to allow us at some point to
achieve self-sufficiency.
Ms. Waters. Infrastructure development.
Mr. Sossamon. Exactly. Infrastructure. And, also, as I
talked about, the Rural Housing and Economic Development
Program, these type programs that allow us to create within our
own tribal areas a private sector of our tribal members.
Because what draws private investment is return on that
investment. And with the small profit margins that our infant
mortgage industry has to offer at this point, we need to look
closer to our own human resources and develop jobs within that
private mortgage industry of our tribal people. And that
develops our local economy. And not only our mortgage lending
industry can be developed, but our tribal construction, private
construction can be developed.
And once we start to generate those tribal businesses, and
private tribal businesses start to generate income, then the
rest of the private market is going to follow suit.
Ms. Waters. Thank you very much.
Mr. Chairman, thank you for allowing me the extra time.
Chairman Ney. Congressman Renzi.
Mr. Renzi. Thank you, Mr. Chairman.
I want to pose a question to the Honorable Mark Maryboy.
The first question--I know we were talking about private
investment. Ms. Waters touched on the issue.
Wouldn't it be true that private investors would be able to
approach the Navajo Nation if we didn't have this impediment of
this business leasing issue? We have heard it touched on today.
Isn't that one of the major things we can look at, whether it
be legislation to help fix that or working with BIA? If you are
approached by private industry, I mean, isn't it an immense
amount of time they have to go through in order for them to be
able to approve this leasing, Mr. Maryboy?
Mr. Maryboy. I agree with the statement that you made
there, Congressman. I would like to give a brief time to our
executive director of NHA, Mr. Chester Carl.
Mr. Renzi. State your name, please, for the record.
Mr. Carl. Again, Chairman Ney and members of the committee,
your question is very much to the point.
As you know, the world is ruled by property law, both
fiscally and also legally. And so long as you own property,
then you have some type of leverage, whether in the private
world or the world abroad.
And that's basically what's lacking in Indian country. So
long as you don't have true ownership to the land versus the
trusts, then you don't have that leverage with a private
institution. So, in order to address that, one of the things
that we did related to the mortgage industry is we were able to
design a mortgage program that is 100 percent guaranteed by the
Navajo Housing Authority and we were able to negotiate with
Fannie Mae to get to that point. And that guarantee, we use
NAHASDA construction dollars, that's construction financing,
and then what we do is we take families that have high debt
ratios, high 65 percent, take them through home buyer education
and get them done to a lower level to get them qualified. We
take families that have no credit history but have dealings
with pawn dealers or trading posts, take their records and take
that into account to get them qualified.
By doing so, we see this as a bridge to take them from the
old assistance program to a more conventional setting. And it's
going to take time, but the transition is there.
And what we have done, also, with Fannie Mae is develop an
offset reserve account so that if there is an unforeseeable
foreclosure, then we are able to take monies out of that
account and pay off the delinquency. And the Navajo Housing
Authority also provides all the foreclosure process, as well.
So, in addition to many of the stories that you hear, this
is one of the ways we can provide that bridge to allow the
financing world to come in.
Mr. Renzi. I appreciate your explanation.
I move to Freddie with Wells Fargo. You talked about
dealing with first generation home buyers. I know you all have
gone out of your way to find methodologies to really push
financial counseling, literacy programs. I'm going to ask a
question in a minute about why it is that we have $54 million
left and we haven't spent it down. Okay.
My intuitions tell me that one of the reasons is because we
are dealing with a generation whose fathers and mothers didn't
buy homes and teach them how to buy homes. They are having to
go through an application process. We learned in the Education
Subcommittee that many Native American people never go to
college because the application process to go to college is too
complicated. And my thought is that maybe it's the same thing
for homeownership, that the application process, while regular
Americans go online and get mortgages within 48 hours, the
application process for Native American people must be a huge
stumbling block given if you are the first one in your family
who's ever even thought about owning a home.
And so I want to ask you about the successes that you've
had with Wells Fargo as it relates to counseling programs or
breaking through this impediment, please.
Mr. Hatathlie. I had mentioned earlier that we have a
training program, community development training program for
home buyers and counselors and also leveraging and resources,
tribal resources, to initiate community development and housing
opportunities. That training is in conjunction with the
Neighborhood Reinvestment Corporation. So that's how we are
addressing that issue, home buyers education. It's designed for
tribal leaders, housing entities, lenders, and anyone,
practitioners who are involved with lending on trust land.
That's how we are addressing that issue.
You also have posed a question as to why do we have so
many--so much money available and we are not lending. You know,
we could describe how HUD 184 program is set up, how the
process works. I have attended training where it says this is
what we need to do and, yes, I come back to the Navajo Nation,
but what happens is I sit down and meet with a client and we
run into lease issues, we run into title status report issues,
archaeological clearance, environmental assessments,
recordation. By the time you are finished with a client, it is
no longer a 60-day deal. It has gone on to two years.
Mr. Renzi. Sixty days being--you have 60 days to access it
and then you can't get it.
Mr. Hatathlie. No. Your traditional to close a loan and
fund, you look at it with 60 days. But with Navajo, being it's
trust land, it goes beyond that. And by that time, the
applicants have pretty much backed out or you're still waiting
for a document.
Mr. Renzi. That's a good question. I can hear Ranking
Member Waters.
Renee, how do you get around the 60 days?
Ms. Konski. I don't get around the 60 day. First of all, on
a fee simple transaction, yes, for Freddie and me, both, I
think we both agree, we could--normal transaction, fee simple
land, you're talking 30 days.
When you're talking trust land and you're talking waiting
for your environmentals, waiting for your approved lease,
waiting for your title status report, your home buyer
education, you're not talking 60 days. You're lucky to be
talking a year and a half, two years.
Mr. Renzi. So the 60 days is a lock in the interest rate,
right?
Ms. Konski. No. There is no such thing as a lock in the
interest rate when it comes to Native American lending, which
is a whole other ballgame. Traditionally, if I am purchasing a
house in Phoenix and I go out and I build this home and now
I've taken out this construction loan to develop and build my
house, along comes my permanent 30-year mortgage. My 30-year
mortgage is going to pay off that house and provide me with a
30-year mortgage.
A lot of the problems that I come up against in dealing
with both the Navajo and many of the other reservations as well
is we get that construction financing in place, we have the
house completed, we are ready to put that permanent mortgage on
there and give that family that 30-year fixed mortgage rate.
The problem is, before we can complete that transaction, we are
again at the mercy of the BIA waiting on that title status
report. That title status report is telling us, really, who is
the beneficiary of that land or that lease. In order for my
mortgage to come in and correct that one, I have to have a
correct one in place so I can then close the loan.
Mr. Renzi. Is the BIA title office understaffed and that's
the reason for the wait, or is it----
Ms. Konski. It is my personal opinion, upon visiting the
BIA offices, and more than just one, they do fluctuate between
local BIA offices. That's where the problem is. It's the
staffing, it's the budget, it's the----
Mr. Renzi. We are going to pay a visit as a result--this is
really an idea that deserves credit to Congresswoman Waters. We
are going to pay a visit to the BIA offices and see if we can
light a fire.
Mr. Sossamon, I appreciate your testimony, sir. We're going
to talk about why we haven't spent it. You and Renee have now
talked about the fact that $54 million is left in the kitty and
we are going to turn it back to the federal government unless
we use it, okay? And we are not able to use it because of the
impediments and the roadblocks with the titles and the
environmentals.
Why do you think we didn't spend it down?
Mr. Sossamon. Why do I think we need to spend it down?
Mr. Renzi. Why do you think we weren't able to spend down
the $54 million?
Mr. Sossamon. Well, a lot of it goes to what we have
identified here today. And I hate to pick on the BIA because
they are not here to defend themselves, but the problem is--and
it was mentioned earlier--that there's a 113-year backlog in
getting title status reports. And you just asked do you think
they have an adequate staff to deal with that. The answer is
no. They cannot deal with processing any kind of title status
report request.
So we need to now maybe look at funding to clear up that
backlog. And perhaps the way to do it is not add more staff to
the BIA, but contract that out to the individual tribes
themselves and allow them to establish their own procedures to
sort out these records and establish their own title offices
that will benefit them in the future. And then it's locally----
Mr. Renzi. Stay there. So you're saying forget building an
agency in Washington and all the bureaucratic little arms that
go along with it. Give the ability of doing the title searches
directly to the Navajo or the Hopi people or the Apache people.
And then what would do you? You would move the federal
oversight--because it has to be certified, right?
Mr. Sossamon. Exactly.
Mr. Renzi. So we would essentially move our people into
their location and handle it at the local level? And take the
backlog with them, then.
Mr. Sossamon. They would have the role of oversight and
review, but the actual work would be done right here where the
people understand what's going on.
And, also, it goes toward doing what I said we have made
great strides towards in the last three years, creating a
mortgage industry in Indian country. Not imposing it from
outside Indian country, but creating our own mortgage industry.
Mr. Renzi. We are going to make it a reality. We are going
to find a way together, bipartisan, to make it happen.
Mr. Sossoman. Thank you.
Mr. Renzi. You're welcome.
I also want to thank Captain June Sabatinos for the visit I
paid about two weeks ago to the hospital here in Tuba City.
Great facility. We have to bring money home to help. It's one
of the best regional facilities I have ever visited,
particularly as it relates to the health issues you saw with
the children today. We talked, and the reason I asked you to
come was a story you told me about the fact we are seeing so
much turnover on the staff, the inability to retain good, high-
quality people. You talked today in your testimony, three
nurses you've just lost in the acute emergency area, if I'm
correct. I'm summarizing your testimony.
You also talked about a gentleman you had who was committed
to serving the Navajo people who actually lived in a tent for
several months. What can we do? Is multiple family housing, if
we had a compound for the hospital--many times, when we go
overseas, you'll see American interests represented, hospital
staffs, teaching staffs, you'll have a housing compound.
Is that kind of a formula possible?
Ms. Sabatinos. Yes. That is what we need, is a housing
compound or a complex. We have very limited land that we could
put this building on, and we would certainly need the funding
to do it, but that would basically meet the needs of our
facility.
Mr. Renzi. Thank you.
Finally, I want to point out the good work of the
Indigenous Community Enterprise. I know, Freddie, you have
worked with them, you serve on the board. We visited a hogan
today, we saw the ability for you all to use small diameter
wood.
Can you just expand on that just a little bit and talk
about some of the, maybe some of the impediments or where we
can assist in helping you produce more units for the people?
And I also heard that you're also thinking about using multi-
family or you're expanding your product base.
Mr. Hatathlie. Being a board member for Indigenous
Community Enterprises, presently, right now, I have tried
working with them where we could go through the 184 program.
And being that the hogan octagon shapes are not your
traditional homes, you know, that HUD would finance, you know,
being that it's non-conforming, we had discussions with that to
see how we could utilize the log hogans to finance, but we were
unable to do that.
We met with the marketing person for Southwest Traditional
Log Homes and also the underwriters of HUD, and that's
something that's still being discussed. I'm also, Indigenous
Community Enterprises is working with a local chapter how they
could establish an elderly compound type of homes, and that
still is in the works also, too.
So they have really stepped up with the limited funds that
they have been utilizing on their part.
Mr. Renzi. Thanks, Freddie.
Thank you, Mr. Chairman.
Chairman Ney. Mr. Matheson.
Mr. Matheson. Thank you.
This may circle back to an issue we talked about, sort of
at the start of the hearing, relative to utilities reaching
specific housing.
Mr. Maryboy, I noticed in your discussion about the need
for the blue ribbon commission to address these issues and the
impact on sovereignty and whatnot, you mentioned something that
applies to something as simple as a utility right-of-way. Is
that one of the impediments to getting electric lines strung to
these houses today.
We were in two different locations today, one was not in
the Bennett Freeze, where there is housing and there is local
distribution lines within a stone's throw away, and they are
not hooked up. Did I understand your testimony that certain
rights-of-way, is that one of the impediments?
Mr. Maryboy. I think the commission could try to oversee
the whole array of projects that could be included, utility,
roads, and the like.
Mr. Matheson. It struck all of us as a pretty strange thing
to see the electrical lines so close and not hooked up.
Miss Konski, I had a couple questions for you.
You mentioned that a fee simple transaction could be done
in maybe three days and then trust lands, two years. We talked
about the BIA title issue, and you also mentioned there is the
environmental and you're stuck waiting on that for a
substantial amount of time.
Are there other factors that cause the delay beyond those
two?
Ms. Konski. Utilities can sometimes cause a delay. In
getting my utilities to my house, they have in the past caused
me a small delay. That's a fact.
Mr. Matheson. You mentioned you completed, was it nine
transactions a week ago?
Ms. Konski. Correct.
Mr. Matheson. And they were all 184 loans?
Ms. Konski. All 184s.
Mr. Matheson. Were all of those 100 percent guaranteed 184?
Ms. Konski. The 184 is not a full 100 percent guarantee,
but it's very close.
Mr. Matheson. If the percentage of that were to have been
dropped lower, would that put those transactions in jeopardy?
Ms. Konski. No. It's not my belief it would have. You've
got the housing authority, who has just built the houses and
put all that money out to build all those homes. They are going
to take families, put families in that are going to qualify and
assume those mortgages in the near future. If they have the
money to go out and build those homes and they are coming in
to, say, a 98 percent guarantee--and I'm talking about getting
a mortgage for, the housing authority themselves----
Mr. Matheson. I'm just asking what if it goes lower, to 90?
Ms. Konski. Oh, what if it gets--it does get lower. An
example of that is a USDA loan. That is a 90 percent guarantee.
Mr. Matheson. Maybe I'm having trouble articulating my
question.
Ms. Konski. Are you talking about guaranteeing my mortgage?
Mr. Matheson. I'm talking about 184 loans, at the guarantee
levels that you have now for those transactions you've done. If
we are limited, if the word comes out where the 184, those are
not allowed to be guaranteed at that level any more, it has
dropped down--I don't know if it's 80 or whatever----
Ms. Konski. Okay. Proposed.
Mr. Matheson. Is that going to put those transactions in
jeopardy?
Ms. Konski. I believe it would have an impact, yes.
Mr. Matheson. Thank you.
Mr. Parks, I guess I get the impression that the different
Federal Home Loan Bank offices have some level of autonomy. Mr.
Maryboy's own testimony indicated they like the Seattle Home
Loan Bank.
Is there communication between the different offices about
products and approaches? Do you talk to Seattle?
Mr. Parks. What you've got to remember, the Home Loan Banks
are all separate entities. The only thing, we are cooperatively
owned by our own, individual membership, and the only thing we
do is issue debt collectively. There are separate boards, they
are actually separate institutions. So you can think of them as
12 separate institutions that have no interaction.
We do talk, and I think what happened was, in Seattle's
case, they at one point were more comfortable with the fact
that, subject to their regulator's interpretation, with taking
a risk. We tend to be a more conservative bank and the culture
of our board of directors is if we don't have some
certification, we are uncomfortable with that.
So we pursue the route of getting some kind of
certification and creating some type of certainty that if, in
the worst-case scenario, our regulator is going to find that's
okay. And that's what we have found. So that's why they are
able to do more.
And everybody has different relationships. We, our
relationship to the Navajos is obviously strengthening. Our
relationship with other tribes is stronger than with others.
Mr. Matheson. Well, I appreciate the panel.
Mr. Chairman, I'll give it back.
Chairman Ney. What we will do is I will also note for the
record that members may have additional questions for the panel
and they may wish to submit them in writing.
Without objection, the hearing record will remain open for
30 days for members to submit written questions to the
witnesses and place their response in the record.
And also for the record, if I can read Mr. Johnson's
handwriting, bear with me, these will be submitted into the
record by these individuals, organizations, or tribes. Rosebud
Sioux Tribe, Navajo Partnership for Housing, Arizona Department
of Housing, Cameron Chapter of Housing, the testimony of the
Blue Tribal Housing Authority, Choctaw Nation Housing
Authority, Spirit Lake Housing Authority, Housing Authority of
the Village of Winnebago, Lower Brule Sioux Housing Authority,
Trenton Indian Housing Authority and Crow Sioux Housing
Authority.
[The following information can be found on pages 236, 222,
213, 217, 219, and 235 in the appendix.]
Chairman Ney. Let me see if I can make a few closing
remarks before turning it over to my colleagues. Let me just
say that I appreciate all three panels and I just think the
testimony was well worth the trip here. We see things in D.C.,
we read about things and we get research, but being here and
visiting, going to the locations today, but also being able to
get your input today, and the other two panels, is invaluable.
Obviously, we are going to have to go back and look at
issues, and I think BIA, it's very clear, is going to have to
be looked at. There is also legislation that is pending in
Congress where it's going through the system. The federal
charter is going to be also important for us to look at as to
how it applies, which you've raised an issue has not been
discussed at least to my knowledge in Washington. If we do a
federal charter, how does it apply to the Indian nation. I
think we need to be cognizant of that.
Home Loan Banks, there is the question of the implication
for the entire country, but also the Indian nation. And I think
also with Fannie Mae and the flexibility for programs, and if,
in fact, some of the legislation being talked about takes that
away from Fannie Mae, how this could affect, also, the Indian
nation and their ability to devise programs.
So I think there is a lot of other issues now that have
come to the surface, but this has been the high note for me,
well worth the trip to be here.
Let me also once again thank the entire staff of Financial
Services, Tallman Johnson, Cindy Chetti, Jeff Riley, Jaime
Alisiga, and also Congressman Renzi's staff, Alix Crockett and
Joann Keene, and most of all my colleagues and Walter--I'm
sorry, Walter Phelps.
But let me just say that Congressman Matheson, I appreciate
all of your work on this issue, your diligent work. And I can't
speak enough for our ranking member, Ms. Waters of California,
who has been so patient to go through how many hearings in the
House subcommittee and yet still has a smile. So her work has
been invaluable and her concern and caring for many, many
issues and, obviously, this one in particular. And also
Chairman Mike Oxley and Ranking Member Barney Frank, who also
made this possible.
And last but not least, my colleague Congressman Renzi, who
makes all of us aware every day in the U.S. Capitol about
concerns of the Indian nation. I appreciate his idea to do
this.
Ms. Waters. Thank you very much, Mr. Chairman. First, I'd
like to thank you for holding this hearing. This absolutely
could not happen without you. Your willingness to come here and
to put your staff to work, to organize this hearing, is
commendable, and I'm delighted that I have had the opportunity
to be here today to learn more and to understand better what we
can do in Congress. So, again, I would like to thank you.
I'd also like to thank Congressman Renzi, because I know
that it's his advocacy and his request to you that caused you
to respond. We have talked about this, Congressman Renzi and I,
on any number of occasions. We have talked about the plight of
Native Americans. He's described this to me in conversations,
but I had to come here to see it, and I thank you for giving me
that opportunity. I'm delighted to be here with you.
Let me just say to our audience here today, I have traveled
extensively and I have traveled extensively to many third world
countries, and what I saw today is similar to what I've seen in
some of the most impoverished areas of the world. What I saw
today is synonymous with what I saw when I first visited the
``Bountosawns'' in South Africa, and it's appalling. It's
unacceptable, and we must use whatever power we have in
Congress to change the plight of Native Americans here and
everywhere.
I would like to just close by saying I represent a rather
diverse district. One area of my district is a poor area, but
it is heaven compared to what I saw here today. When you hear
discussions about South Los Angeles and people who are in
poverty, I want to tell you, again, when you compare it to what
I saw today, it's almost as if those people who are described
as living in poverty live in luxury. This is absolutely
unconscionable.
So being here today helps me to know how I can better
support changing the ability for Native Americans and for the
Navajo Nation to do something.
What's encouraging about all of this is the resources that
are here. We have the possibility to do this. It appears that
there's too much bureaucracy. I think perhaps there are some
people who may have gotten a little bit soft on the job and
they aren't doing everything that they could do. I don't know.
I don't know, but I think we need to figure that out. And,
clearly, the Bureau of Indian Affairs should have been here
today. The fact that they are not here means that I know Mr.
Renzi and my chairman is going to not only talk about paying
them a visit, but maybe helping them to understand that if you
don't utilize the power that's given to you, maybe you don't
need to keep it. So, I'll just put that out there.
So with that, I'd like to give the microphone back because
I know Mr. Matheson, Congressman Matheson has a lot that he
would like to say. On the way here, he was describing to me his
challenges and how he borders this entire state and what he's
trying to do. So with the two of these gentlemen working
together representing both sides of the aisle and engaging all
of us, I am extremely optimistic, no matter how difficult it
gets.
Again, I would like to thank you, Mr. Chairman.
Mr. Matheson. Well, I don't have a lot to say, fortunately.
But I often like to tell people that it's always good to get
out of Washington D.C. And spend time in the real world, and I
think that's what we have had a chance to do today. And I think
it's been a great experience for me and I suspect for everyone
else here on the committee.
But I want to thank all of you for coming today. I think
it's really important that in this system of democracy, we
participate, and I thank you for taking your time to do that. I
have learned a lot today and I want this process to continue.
But it's my pledge, and I think I speak for everybody, it's
our pledge that we are going to work the best we can to make
progress on all these issues.
Chairman Ney. Thank you. We will give closing comments to
Congressman Renzi.
Mr. Renzi. Thank you for letting me wrap up.
I want to begin by thanking everyone here who has sat
through a four-and-a-half, five-hour hearing, those of you who
came out from the community, taking time away from your
families and businesses and obligations to share with us, all
the panels and their testimony, some of it very riveting. It's
true patriotism to engage in the great debate, and I thank you
very much.
I have to thank Chairman Ney. The idea of making history,
him allowing us to come out here, him making history and
bringing all of us with him, to have for the first time
Congress address Native American Indian housing issues in the
field truly is historic. It took his leadership to get it done.
I have been to many hearings in the past. I have never been
to a hearing where Republicans and Democrats came together so
well. I want to thank Ranking Member Congresswoman Maxine
Waters from California. I was so surprised to think that we got
together to see the conditions because it's so severe out there
that over the years to come, as we're wrestling with this,
whether you be Republican or Democrat, or who is in control of
the House or who is in power--I whispered to Ranking Member
Waters that maybe some day, you know, if you guys are in power,
at least you'll have been able to see firsthand the conditions.
So it doesn't matter who is in power. We will work together to
get through the issues.
And my neighbor to the north, Jim Matheson, Congressman
Matheson, has been a great friend in Washington. We work hard
together on the issues as it relates to housing. He is taking
such a wonderful lead on the issues relating to uranium. We are
looking to have a workshop together in Washington as it relates
to those issues.
If you would allow me, please, there is a couple people I
want to acknowledge. I want to acknowledge the members of the
Assisted Independence Program here in Tuba City. I know you
have strong concerns today. I wish I had done more to
acknowledge you earlier on. I'm thankful I had a chance to talk
to you briefly. My Window Rock office, Walter Phelps, my
personal assistant Joann Keene and myself personally will meet
you with and in future endeavors we would like to hear your
testimony publicly.
I also want to acknowledge a friend who is--a couple
friends who are with us today. As many of you are aware, we
lost Lori Piestewa, the first Native American ever killed in
combat. And Terry and Percy Piestewa and Lori's two children,
Brandon and Carla, have sat through the last hour and a half
hour of this hearing. They are beautiful people. Terry and
Percy, if you would stand up and be acknowledged.
I think Lori would be proud that we are here today in her
hometown. Lori represents the warrior spirit of the Hopi and
the Navajo people. The women of their ancestry would stand next
to their men and fight. They did not flee. And Lori represents
that tradition and she deserves to have a mountain named after
her, let me tell you.
Also, in closing, let me say this. I want to say thank you
to Mr. Andrew Todd, who is the superintendent of the Greyhills
High School where we stayed today. And he was such a great
hope, showed great hospitality.
And, finally, to the staff of the Navajo Housing Authority
for your housing, your refreshments, the information booths you
set out today. Thank you all very much for being with us today.
In my opinion, you are all true patriots. May God bless you.
Thank you.
Thank you, Mr. Chairman.
Chairman Ney. We are adjourned.
[Whereupon the subcommittee was adjourned.]
A P P E N D I X
May 3, 2004
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