Government funding for Native American housing continues on its seesaw. While President Obama’s 2012 budget calls for an all-time high of $700 million for the Indian Housing Block Grant, the continuing resolution for fiscal 2011 has been slashed to $500 million.
This followed an extra $500 million for Native housing in the administration’s first stimulus bill, which was in turn followed by a proposal to cut funding for the next year to $580 million, the lowest in 15 years.
Indian housing by and large is the worst housing in the U.S., often badly substandard and overcrowded. It is badly underfunded and could use some steadiness of hand at the government controls. Treaties signed by the U.S. with Indian nations in the 19th century often referenced their housing needs. So it should step up its efforts to bring Indian housing into the 20th century, if not yet the 21st.
Estimates are that 250,000 units of new housing are needed in Indian Country right now. About $25 billion, the same amount that was invested in Iraqi infrastructure, would get most of this job done. The Treasury could be repaid some amount from rental receipts and insurance premiums from the Department of Housing and Urban Development’s HUD 184 mortgage, which guarantees lender outlays 100% on loans made to American Indians. For those in mortgage risk management, this is worth repeating—the government insures HUD 184 loans at 100%.
The Federal Home Loan Bank of Chicago is making a secondary market for HUD 184s, HUD secretary Shaun Donovan told the recent legislative conference of the National American Indian Housing Council in Washington. In addition, HUD 184s are eligible to be pooled in Ginnie Mae securities, the same as Federal Housing Administration or Department of Veterans Affairs mortgages.
The 2012 budget proposal calls for $7 million to support the HUD 184. According to Donovan if fully used this amount could leverage $480 million in mortgages, helping 2,900 families buy or rehabilitate a home. But that’s down from the $8.25 million in the president’s 2011 budget, and the $9 million enacted in fiscal 2010.
The HUD 184 is a highly successful program that deserves more funding, not less. Another Indian loan program, the Title VI, is in the budget for $2 million, flat to previous years. That should be higher as well. Though not as well used as the HUD 184, Title VI loans are extremely useful for infrastructure and project loans.
The Native Hawaiian housing block grant also has been slated for a cut, to $10 million from $13 million enacted in fiscal 2010.
