In an exciting move seeking to address these challenges, a bill has been introduced into the United States Senate. It’s designed to significantly improve housing opportunities for individuals and families in Native American, Alaska Native, and Native Hawaiian communities. The bill, introduced by Senator Smith and cosponsored by Senator Rounds, and now under consideration by the Committee on Banking, Housing, and Urban Affairs, seeks to address these longstanding issues.
The delightful title of this bill is the “Native American Rural Homeownership Improvement Act of 2023”. With this bill, the lawmakers aim to boost homeownership opportunities for rural communities associated with Indian Tribes, Alaska Natives, and Native Hawaiians. They also aim to fortify institutions serving these communities with the capital they need for mortgage transactions.
How would the bill do this, you wonder? The core method is through the Native Community Development Financial Institutions, or CDFIs for short. CDFIs are organizations known for their fantastic work in economically challenged areas, providing financial products and services that might otherwise be unavailable. The bill proposes directly loaning $50,000,000 each fiscal year to these institutions.
Now, for a CDFI to be eligible for the loan, some conditions must be satisfied: they should be capable of providing a 20% non-federal cost share, and they must be able to originate and service loans for single-family homes. The loan amounts received should be used to provide loans to eligible borrowers, who are members of Indian Tribes, Alaska Native communities, or Native Hawaiian communities, or maintain households where at least one member belongs to these communities.
Wait – there’s a cherry on top! For loans used to assist borrowers living on priority Tribal land, the Secretary shall waive the non-Federal cost share requirement, making it easier for individuals in these regions to secure loans.
The beauty of this bill lies in its accountability measures. The Native CDFIs receiving loans under this scheme need to submit annual reports to the Secretary. And not just any reports – these reports will describe their outreach efforts, how they managed to secure additional capital, and detailed statistics about the loans they gave out. In turn, the Secretary will also provide annual reports to congressional committees about the loans made to the Native CDFIs, the percentage of loans made to members of various communities, and the average loan amount.
Three years after this subsection of the bill has been enacted, both the Secretary and the Secretary of Treasury will evaluate the efficacy of the program, and make recommendations based on current demand and future potential of the program.
The Secretary is also authorized to make grants to Native CDFIs to provide them with operational support and other related services, subject to satisfactory performance and availability of necessary funds. An amount equal to 20-25% of the total outstanding balance of loans made by the Native CDFI can be awarded as grants.
These commendable intentions do not rest with loans and grants alone. A provision for technical assistance allows for a budget of $1,000,000 to be appropriated to the Secretary for fiscal years 2024, 2025, and 2026. This will provide support to Native CDFIs relative to homeownership and housing-related assistance. This fund can also be used to enable a national organization representing Native American housing interests to provide outreach and technical assistance.
Breaking it down, this legislation creates a new wave of hope for Native American, Alaska Native, and Native Hawaiian communities, fostering improved housing and homeownership opportunities. The bill has a two-fold objective: to increase homeownership opportunities in these communities and to enhance the strength of organizations providing support to them.
Will this fix everything? No, but it’s a step in the right direction. We can only wait to see the ripple effect of benefits this bill can create for rural, indigenous communities. As the bill moves forward through the legislative process, its impact and effectiveness will be carefully scrutinized, keeping the hopes of these communities alive.
