Fact Sheet on The Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA)
CRS Report for Congress
Fact Sheet on The Native American Housing
Assistance and Self-Determination Act of
Bruce E. Foote
Analyst in Housing
Domestic Social Policy Division
The Native American Housing Assistance and Self-Determination Act of 1996
(NAHASDA), P.L. 104-330, reorganized the system of federal housing assistance to
Native Americans by eliminating several separate programs of assistance and replacing
them with a single block grant program. In addition to simplifying the process of
providing housing assistance, the purpose of NAHASDA is to provide federal assistance
for Indian tribes in a manner that recognizes the right of Indian self-determination and
The Act provides block grants to Indian tribes or their tribally designated housing
entities (TDHE) for affordable housing activities. Affordable housing activities include
modernizing and providing assistance to housing developed under prior HUD contracts,
as well as model activities as approved by HUD. The tribe must submit an Indian
housing plan (IHP), with long- and short-term goals and proposed activities, which is
reviewed by HUD for compliance with statutory and regulatory requirements.
The program has been providing assistance to members of more than 500 tribes
over the past 4 years and more than $600 million has been annually appropriated for
Authorization for NAHASDA expired at the end of FY2001. Under H.R. 1873 and
S. 1210, as introduced in the 107th Congress, the authorization would be extended
through FY2006 with no other changes in the current law. H.R. 3995 would extend it
through FY2007 and amend NAHASDA to permit recipients to use a portion of their
grant amounts for comprehensive planning. This report will be updated as
reauthorization bills progress.
NAHASDA fundamentally altered the method of delivering housing services to
Native Americans through the Department of Housing and Urban Development (HUD).
It provides funding through block grants, separates Native American programs from the
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public housing program, offers increased flexibility in developing new programs, reduces
the regulatory burden, establishes performance measures to assess progress, and provides
sanctions for non-compliance. Funding is provided under a needs-based formula, which
was developed pursuant to negotiated rule-making. Tribes and TDHEs can leverage
funds, within certain limits, by using future grants as collateral to issue obligations under
a guaranteed loan program. HUD’s Office of Native American Programs (ONAP) staff
monitors the tribe or its TDHE to ensure compliance with the objectives of the Indian
Housing Plan (IHP).
Summary of the NAHASDA Statute
The law states that Congress finds that (1) the federal government has a
responsibility to promote the general welfare of the Nation by using federal resources to
aid families in seeking safe and affordable housing and healthy environments, by working
to ensure a thriving national economy and a strong private housing market, and by
developing partnerships among federal, state, local, and tribal governments; (2) there
exists a unique relationship between the U.S. government and the governments of Indian
tribes; (3) the U.S. has assumed a trust responsibility to protect Indian tribes and people;
(4) providing affordable homes in a safe and healthy environment is an element of that
special role; (5) there is an acute need for such housing; and (6) federal assistance to meet
these responsibilities should be done in a manner which recognizes the rights of self-
determination and self-governance.
Title I. For each fiscal year, HUD is authorized to make grants to a recipient on
behalf of Indian tribes to carry out affordable housing activities. A grant may not be made
on behalf of an Indian tribe unless the governing body of the locality within which any
affordable housing to be assisted with grant amounts will be situated has entered into an
agreement with the recipient providing for local cooperation. A grant recipient for an
Indian tribe is allowed to receive a block grant only if the assisted housing is exempt from
real and personal property taxes and the recipient makes annual user fee payments to
compensate local governments for the costs of providing governmental services or makes
payments in lieu of taxes to taxing authorities.
Grant amounts may be used only for affordable housing activities consistent with an
approved Indian housing plan (IHP). An Indian tribe must submit to HUD for each fiscal
year a 5-year and a 1-year IHP, which will contain the goals, mission and specific
affordable housing activities which the tribe seeks to accomplish. HUD is authorized to
establish abbreviated requirements for housing plans of small Indian tribes and small
tribally designated housing entities. Funds for projects may not be released until the
recipients certify that environmental review pursuant to certain federal laws has been
Regulations implementing the Act must be issued according to a negotiated
rulemaking procedure. The procedure must conform to the unique
government-to-government relationship between the tribes and the U.S. government.
HUD was authorized appropriations of such sums as may be necessary for grants for
FY1998 through FY2001. Although the authorization has now expired, Congress
continues to fund the program. (See section “Program Funding and Number of Tribes
Assisted” of this report.)
Title II. The national objectives of the Act are: (1) to promote affordable housing
for occupancy by low-income Indian families; (2) to ensure better access to private
mortgage markets and promote self-sufficiency of Indian tribes and their members; (3) to
further economic and community development by coordinating federal, state, and local
activities on behalf of Indian tribes and their members; (4) to plan for and integrate
infrastructure resources with housing development; and (5) to promote the development
of private capital markets in Indian country.
Assistance is limited to low-income Indian families on Indian reservations and other
Indian areas, with the exception of assistance for home ownership or loan guarantee
activities. HUD is directed to establish limits on the amount of assistance for
non-low-income families. Through the Indian housing plan, preference may be given to
Indian families who are members of the tribe or to other Indian families for housing or
housing assistance provided through affordable housing activities.
Eligible affordable housing activities include (1) modernizing and providing
operating assistance to housing developed under prior HUD contracts, (2) purchasing,
modernizing, or constructing affordable housing, (3) providing housing-related services
such as counseling, and rental assistance, and homeowner assistance, (4) providing
management services for affordable housing, (5) providing crime prevention and safety
activities, and (6) model programs approved by HUD.
Title III. Each fiscal year the funds must be allocated among eligible Indian tribes.
HUD is authorized to establish a grant allocation formula to be based on factors that
reflect the need for assistance for affordable housing.
Title IV. HUD may terminate, reduce, or limit the availability of grant payments to
a recipient found to be in noncompliance with provisions of this Act. A recipient found
to have engaged in a practice or pattern of willful noncompliance may be replaced by
another entity which will serve as the recipient for the tribe.
Each recipient must review its progress annually and submit a performance report
to HUD. At least annually, HUD must conduct reviews (and audits if necessary) to
determine whether the recipients have carried out their activities in a timely manner and
in accordance with the objectives of the Act, whether the recipients are in compliance
with the housing plan, and whether the performance reports are accurate.
At the end of each fiscal year, HUD must submit a report to Congress detailing the
progress in accomplishing the objectives of the Act, the use of funds during the preceding
fiscal year, and a description of the outstanding loan guarantees under Title VI of the Act.
Title V. Prior law contained separate titles and language authorizing Indian uses of
categorical HUD programs such as public housing, the Hope program, the Youthbuild
program, the HOME program, and the emergency shelter grants program. This title
repeals or eliminates that language and allows for consolidation of those activities into the
Indian housing block grant program.
Title VI. This title authorizes loan guarantees for Indian Housing Block Grant
recipients, Indian tribes, and TDHEs who need additional funds to finance affordable
housing activities described in Section 202 of NAHASDA. HUD may only provide the
guarantee if financing cannot be completed without the use of the guarantee. The Indian
tribe and TDHE must pledge their current and future Indian Housing Block Grant (IHBG)
funds to assure repayment of the obligation and may borrow up to five times their IHBG
grant amount. HUD's guarantee covers 95% of the principal and interest due on the
obligation. The full faith and credit of the United States is pledged to the payment of the
guarantee. HUD is also authorized to make grants to an Indian tribe to cover up to 30%
of the net interest costs of notes and guarantees issued under this title.
The law authorized such sums as may be necessary to be appropriated for the subsidy
costs of the guarantees for FY1997 through FY2001. Although the authorization has now
expired, Congress continues to fund the program and those funds are included as a set-
aside within the totals shown in section “Program Funding and Number of Tribes
Assisted” of this report.
Title VII. The Section 184 Loan Guarantee program is amended to add Indian tribes
as eligible borrowers. The authority to provide loan guarantees for Indian housing to
those who could not otherwise acquire financing because of the unique legal status of
trust lands is amended to provide such guarantees because of the lack of access to private
financial markets. The loan guarantees for eligible housing shall be used for housing
under the jurisdiction of an Indian tribe for which an Indian housing plan has been
submitted and approved. The program is amended to provide that if a borrower defaults
and the lender opts not to seek foreclosure, HUD may accept assignment of the loan and
pay the guarantee to the lender if that is found to be in the best interest of the government.
The Government National Mortgage Association (Ginnie Mae) is authorized to guarantee
Section 184 loans.
Subject to the approval of the affected Indian tribe and the Secretary of the Interior,
50-year leases of trust or restricted Indian lands are permitted for housing development
and residential housing purposes.
The Act authorizes appropriations of such sums as necessary for FY1997 through
FY2001 for a national organization representing Native American housing interests for
providing training and technical assistance to Indian housing authorities and TDHEs.
Although the authorization has now expired, Congress continues to fund the program and
those funds are included as a set-aside within the totals shown in section “Program
Funding and Number of Tribes Assisted” of this report.
Program Funding and Number of Tribes Assisted
The program was funded for the first time in FY1998. The program was funded at
$600 million for FY1998, $620 million for FY1999 and FY2000, $650 million for
FY2001, and $649 million for FY2002. The Administration requests $647 million for
FY2003. Within the above totals, each year $6 million has been set-aside for the subsidy
cost of loan guarantees. Also, each year $2 million has been set-aside for contracts with
a national organization representing Native American housing interests for providing
training and technical assistance to Indian housing authorities and TDHEs. The contract
has gone to the National American Indian Housing Council.
In the 4 years since the award of the first grant under NAHASDA, HUD has funded
in FY1999; 364 recipients servicing 528 tribes in FY2000; and 307 recipients serving 531
Indian tribes in FY2001. According to HUD, in FY2002, there are a total of 583 potential
tribal grantees eligible for a total of about $641 million in grants. Under prior law, HUD
had provided assistance to approximately 200 Indian Housing Authorities.
Program Prospects and Problems
It has been argued that NAHASDA has started a series of discussions that had not
taken place before. With NAHASDA allowing tribes more control over their operations,
tribes are creating housing partnerships with lenders. Tribes are educating tribal members
about credit, saving, homebuying, and banking practices. Technical assistance and
mentoring programs are being put in place to help Native Americans establish their own
programs and institutions. Several local and regional lenders have developed the
expertise to work with Native American tribes. In addition, the Federal National
Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation
(Freddie Mac) sponsor programs for lending to Native Americans.
While all parties generally agree that NAHASDA has been successful, the program
is not without its problems. In August, 2001, the HUD Inspector General (IG) issued a
report on the implementation of NAHASDA. Its nine findings are that (1) HUD has not
accurately allocated NAHASDA funds since inception of the program, (2) when projects
are assisted by multiple programs there are conflicting admission requirements, (3) when
TDHEs contain a number of tribes, the member tribes do not always benefit equally from
their NAHASDA grants, (4) some TDHEs struggle because of their unfamiliarity with
NAHASDA requirements, (5) some TDHEs lack management systems to effectively
administer NAHASDA, (6) some TDHEs have not developed or complied with all
policies and procedures, (7) some TDHEs have not successfully carried out their
affordable housing activities, (8) there is inadequate accounting for program income and
increases in uncollected rents, and (9) TDHEs need to submit timely audit reports and
they need to use uniform accounting standards.
NAHASDA bars federal grants for housing unless the property in question is exempt
from taxation. This requirement effectively limits the options of small and urban tribes
that do not have large amounts of undeveloped, tax-exempt trust lands. Such groups
would like to see NAHASDA amended to relax the tax-exempt requirements.
Many tribes have expressed concern that HUD has not adequately consulted tribes
when making regulatory changes to NAHASDA. HUD appears to have taken the
position that the NAHASDA requirement for negotiated rulemaking only applies to the
initial promulgation of regulations, while tribes believe that a negotiated rulemaking
process should also apply to subsequent additions or amendments to the regulations. In
the new HUD Consultation Policy set in place last year, a provision was made to create
a negotiated rulemaking advisory committee, made up of tribal members, to advise HUD
on when negotiated rulemaking procedures ought to be used. In addition, HUD is
currently seeking to form a Negotiated Rulemaking Committee to address issues with the
NAHASDA grant formula.
While tribes view these as steps in the right direction, they do not view these steps
as sufficient. HUD remains the ultimate decision maker and they contend that there is no
guarantee that HUD would follow the recommendations of an advisory committee. The
preference of tribes is that the statutory language of NAHASDA be amended to clearly
state that negotiated rulemaking should be used for all regulations and rulemaking made
Several tribes argue that they would be able to provide more affordable housing to
members if they were able to access tax-exempt financing through Title VI of
NAHASDA. To do so, Section 7871 of the Internal Revenue Code would have to be
amended to accommodate NAHASDA.
Reauthorization of NAHASDA
As noted above, NAHASDA contains three authorizations: (1) the authorization of
appropriations for block grants for Indian tribes to carry out affordable housing activities,
(2) the authorization of appropriations for the subsidy costs of loan guarantees, and (3)
the authorization of appropriations for providing training and technical assistance for
Indian housing authorities and TDHEs. These authorizations expired at the end of
Under H.R. 1873 and S. 1210, as introduced in the 107th Congress, NAHASDA
would be amended to extend these authorization through FY2006 and no other
amendments are proposed in either bill. Title VII of H.R. 3995 would extend the
authorizations through FY2007 and amend NAHASDA to permit recipients to use a
percentage of their grant amounts for comprehensive housing and community
development planning activities. The Subcommittee on Housing and Community
Opportunity of the House Committee on Financial Services has held hearings on H.R.