[Senate Report 110-126]
[From the U.S. Government Publishing Office]
Calendar No. 262
110th Congress Report
SENATE
1st Session 110-126
======================================================================
TO REAUTHORIZE THE PROGRAMS OF THE DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT FOR HOUSING ASSISTANCE FOR NATIVE HAWAIIANS
_______
July 9, 2007.--Ordered to be printed
_______
Mr. Dorgan, from the Committee on Indian Affairs, submitted the
following
R E P O R T
[To accompany H.R. 835]
The Committee on Indian Affairs, to which was referred the
bill (H.R. 835) to reauthorize programs in the Department of
Housing and Urban Development for housing assistance for Native
Hawaiians, having considered the same, reports favorably
thereon without amendment and recommends that the bill do pass.
Purpose
The Hawaiian Homeownership Opportunity Act of 2007 would
reauthorize the Native Hawaiian Housing Block Grant program in
Title VIII of the Native American Housing and Self-
Determination Act of 1996 (NAHASDA) and the Section 184A
individual loan guarantee program for low-income Native
Hawaiian families. The bill would also authorize the Department
of Hawaiian Home Lands to utilize Title VI of NAHASDA to
leverage its future housing block grant funds to provide
housing services to low-income Native Hawaiian families living
on Hawaiian home lands.
Background
The Native American Housing Assistance and Self-
Determination Act of 1996 (25 U.S.C. 4101 et seq.) reorganized
the system of housing assistance provided to tribes through the
Department of Housing and Urban Development (HUD). Tribal
eligibility for several housing programs was eliminated and the
funding from those programs was instead consolidated into the
Indian Housing Block Grant (IHBG). The Indian Housing Block
Grant provides direct funding to tribes for various housing
activities authorized by NAHASDA. In 2000, NAHASDA was amended
to include Title VIII so that Native Hawaiians could also
receive funding through a separate block grant, the Native
Hawaiian Housing Block Grant (NHHBG), which funds affordable
housing activities on Hawaiian home lands.
Title VIII of NAHASDA was originally authorized for five
years, through Fiscal Year 2005, and has not been formally
reauthorized since, although Congress has continued to provide
annual appropriations to carry out the program. H.R. 835
reauthorizes Title VIII of NAHASDA for five years, for Fiscal
Years 2008 through 2012.
H.R. 835 also makes two substantive changes to current law
by expanding Native Hawaiians' access to two loan guarantee
programs: Section 184A (12 U.S.C. 1715z-13b) and NAHASDA Title
VI.
Section 184A. H.R. 835 amends the Section 184A loan
guarantee program for single-family homes on Native Hawaiian
home lands to allow for refinancing; to strike requirements
that a homebuyer be turned down for a loan before applying for
a Section 184A loan; and to eliminate the requirement to report
on anticipated applications in the annual housing plan.
NAHASDA Title VI. H.R. 835 authorizes the Department of
Hawaiian Home Lands (DHHL) to become eligible for loan
guarantees authorized under Title VI of NAHASDA. This program,
modeled on the Section 108 Loan Guarantee Program that works in
conjunction with HUD's Community Development Block Grant
program (CDBG), would authorize the Department of Hawaiian Home
Lands to borrow or issue bonded debt for large-scale housing
and infrastructure development with the security of the federal
government. The funding stream provided by the Department of
Housing and Urban Development would be used as collateral.
Legislative History
On March 28, 2007, the House of Representatives voted 272-
150 to pass H.R. 835, and upon receipt in the Senate, the bill
was referred to the Committee on Indian Affairs. The bill is
identical to a bill Senator Inouye introduced in February, 2007
(S. 710).
On May 10, 2007, the Committee on Indian Affairs convened a
business meeting to consider H.R. 835 and other measures that
had been referred to it, and ordered the bill favorably
reported.
Committee Recommendation and Tabulation of Vote
On May 10, 2007, the Committee on Indian Affairs convened a
business meeting to consider H.R. 835 and other measures, and
voted to have the bill favorably reported to the full Senate,
without amendment, with the recommendation that the bill do
pass.
Section-by-Section Analysis
Section 1. Short title
Hawaiian Homeownership Opportunity Act of 2007.
Section 2. Authorization of appropriations for housing assistance
Makes Title VIII of NAHASDA (25 U.S.C. 4221 et seq.)
applicable for fiscal years 2008 through 2012.
Section 3. Loan guarantees for Native Hawaiian housing
Reauthorizes Section 184A, the Native Hawaiian Housing Loan
Guarantee Fund (12 U.S.C. 1715z-13b), for fiscal years 2008
through 2012.
Amends Section 184A to conform to the provisions of the
Section 184 Indian Housing Loan Guarantee Program as follows:
Strikes language contained in Section 184A(b), ``or as a
result of a lack of access to private financial markets,''
which has been interpreted by HUD to require potential
borrowers to apply to private market lenders and be turned down
before requesting a loan under Section 184A.
Strikes the language of the entire subparagraph
184A(c)(2)(B), ``HOUSING PLAN.'' This language ties any housing
or infrastructure development, new construction, acquisition or
substantial rehabilitation of housing to the annual Native
Hawaiian Housing Plan (NHHP) submitted by the Department of
Hawaiian Home Lands (DHHL), the sole grant recipient. This had
proven impractical in the Section 184 program, as longer-term
planning is required for many projects, and there are instances
where the Section 184A guarantees will not be used in
conjunction with Native Hawaiian Housing Block Grant funds. For
individual Native Hawaiian homebuyers applying for a Section
184A loan, this provision is not relevant. Submitting this
information in the annual Native Hawaiian Housing Plan of the
Department of Hawaiian Home Lands would still be required if
any Native Hawaiian Housing Block Grant funds were involved in
the project.
Adds the word ``refinance'' to Section 184A(c)(2)(A),
``Eligible Housing,'' thereby permitting Section 184A borrowers
to take advantage of lower interest rates and better terms,
should market conditions warrant. It would also permit eligible
borrowers with existing mortgage loans from other sources to
refinance those obligations under this program.
Section 4. Eligibility of Department of Hawaiian Home Lands for Title
VI loan guarantees
Makes the Department of Hawaiian Home Lands eligible to
participate in Title VI of NAHASDA, Federal Guarantees for the
Financing of Tribal Housing Activities. This would allow the
Department of Hawaiian Home Lands to borrow or issue bonded
debt for up to five (5) times their annual allocation under
Title VIII, with the full faith and credit of the federal
government, and to use such funds for affordable housing
activities and other purposes allowed under Title VIII.
Cost and Budgetary Considerations
The following cost estimate, as provided by the
Congressional Budget Office, dated May 17, 2007, was prepared
for H.R. 835:
H.R. 835--Hawaiian Homeownership Opportunity Act of 2007
Summary: H.R. 835 would reauthorize the Native Hawaiian
Housing Block Grant and Loan Guarantee programs and would
authorize the appropriation of such sums as necessary for those
programs for each of the fiscal years 2008 through 2012. In
addition, the act would reauthorize loans provided under Title
VI of the Native American Housing Assistance and Self-
Determination Act of 1996 for fiscal years 2008 through 2012
and would expand eligibility to include the Department of
Hawaiian Home Lands (DHHL).
CBO estimates that appropriation of the amounts necessary
to implement H.R. 835 would cost $39 million over the 2008-2012
period. Enacting H.R. 835 would not affect direct spending or
revenues.
H.R. 835 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA);
the act would benefit the state of Hawaii.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 835 is shown in the following table.
The costs of this legislation fall within budget functions 600
(income security) and 370 (commerce and housing credit).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------
2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law for Hawaiian Housing Programs:
Budget Authority\1\................................... 12 0 0 0 0 0
Estimated Outlays..................................... 4 2 2 2 2 1
Proposed Changes:
Native Hawaiian Housing Block Grants:
Estimated Authorization Level..................... 0 9 9 10 10 10
Estimated Outlays................................. 0 1 3 5 7 9
Native Hawaiian Loan Guarantees:
Estimated Authorization Level..................... 0 1 1 1 1 1
Estimated Outlays................................. 0 1 1 1 1 1
Title VI Loan Guarantees:
Estimated Authorization Level..................... 0 2 2 2 2 2
Estimated Outlays................................. 0 2 2 2 2 2
Total:
Estimated Authorization Level................. 0 12 12 13 13 13
Estimated Outlays............................. 0 4 6 8 10 12
Spending Under H.R. 835 for Hawaiian Housing Programs:
Estimated Authorization Level\1\...................... 12 12 12 13 13 13
Estimated Outlays..................................... 4 6 8 10 12 13
----------------------------------------------------------------------------------------------------------------
\1\The 2007 level is the amount appropriated in that year for Native Hawaiian Housing Block Grants, Native
Hawaiian Housing Loan Guarantees, and Title VI Loan Guarantees.
Basis of estimate
Native Hawaiian Housing Block Grants
Section 2 would authorize the appropriation of such sums as
necessary for the Native Hawaiian Housing Block Grant program
from 2008 through 2012. Program grants are used to assist
affordable housing activities for eligible low-income Native
Hawaiian families. In 2007, $9 million was appropriated for
this program. Assuming appropriation of similar amounts (and
adjusting for anticipated inflation), CBO estimates that
implementing this section would cost $23 million through 2012.
Native Hawaiian Housing Loan Guarantees
Section 3 would authorize the appropriation of such sums as
necessary for the Native Hawaiian Housing Loan Guarantee
program from 2008 through 2012. This program guarantees loans
made to eligible Native Hawaiian families who reside on the
Hawaiian Home Lands and who otherwise could not acquire private
financing because of the unique legal status of the Hawaiian
Home Lands. In 2007, $1 million was appropriated for this
program. Assuming appropriation of similar amounts (and
adjusting for anticipated inflation), CBO estimates that
implementing this section would cost $5 million through 2012.
Title VI loan guarantees
Section 4 would extend the authorization of the Title VI
loan guarantee program through 2012 and expand eligibility to
include the DHHL. Such guarantees allow Native American Block
Grant recipients to leverage their funding by pledging future
grants as security for the repayment of a loan. A private
lender provides the financing and the Department of Housing and
Urban Development (HUD) provides a 95 percent guarantee of the
principal and interest due in the case of a default. The size
of the Title VI loans can be no larger than five times the
grant recipient's annual grant amount. HUD estimates this
program currently has a subsidy rate of about 12 percent. In
2007, $2 million for subsidy costs was appropriated for the
program, which would support about $17 million in loans.
Assuming appropriation of similar amounts and adjusting for the
expansion of eligibility to include DHHL, CBO estimates that
implementing this section would cost $11 million through 2012.
CBO assumes that loans to DHHL that are paid off using Native
Hawaiian Housing Block Grants would have a similar loan-to-
grant ratio as those Title VI loans backed by Native American
Block Grants.
There have been few losses to date in the Title VI program;
however, repayment of these loans have been funded by federal
grants. As a result, the actual cost to the government is borne
by the grant program. It is uncertain what the cost of these
loans would be in the absence of the grant program but it
likely would be higher, perhaps substantially.
Intergovernmental and private-sector impact: H.R. 835
contains no intergovernmental or private-sector mandates as
defined in UMRA and would benefit the state of Hawaii. The act
would allow certain state and tribal entities in the state of
Hawaii to continue helping native Hawaiians with low income
purchase, construct, or refinance homes.
Previous CBO estimate: On February 21, 2007, CBO
transmitted a cost estimate for H.R. 835 as ordered reported by
the House Committee on Financial Services on February 14, 2007.
The House and Senate versions of the act are identical, as are
CBO's estimates.
Estimate prepared by: Federal Costs: Chad Chirico and
Susanne S. Mehlman; Impact on State, Local, and Tribal
Governments: Lisa Ramirez-Branum; Impact on the Private Sector:
Paige Piper/Bach.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Executive Communications
The Committee has received no communications from the
Executive Branch regarding H.R. 835.
Regulatory and Paperwork Impact Statement
Paragraph 11(b) of rule XXVI of the Standing Rules of the
Senate requires that each report accompanying a bill evaluate
the regulatory and paperwork impact that would be incurred in
carrying out the bill. The Committee has concluded that the
regulatory and paperwork impacts of H.R. 835 should be de
minimis.
Changes in Existing Law
In compliance with subsection 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill H.R. 835, as ordered reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new language to be added in italic, existing law to
which no change is proposed is shown in roman):
NATIVE AMERICAN HOUSING ASSISTANCE AND SELF-DETERMINATION ACT OF 1996
* * * * * * *
TITLE VI--FEDERAL GUARANTEES FOR FINANCING FOR TRIBAL AND NATIVE
HAWAIIAN HOUSING ACTIVITIES
SEC. 601. AUTHORITY AND REQUIREMENTS.
(a) Authority.--To such extent or in such amounts as
provided in appropriations Acts, the Secretary may, subject to
the limitations of this title (including limitations designed
to protect and maintain the viability of rental housing units
owned or operated by the recipient that were developed under a
contract between the Secretary and an Indian housing authority
pursuant to the United States Housing Act of 1937), and upon
such terms and conditions as the Secretary may prescribe,
guarantee and make commitments to guarantee, the notes or other
obligations issued by Indian tribes or tribally designated
housing entities with tribal approval, or by the Department of
Hawaiian Home Lands, for the purposes of financing affordable
housing activities described in section 202 or 810, as
applicable, and housing related community development activity
as consistent with the purposes of this Act.
* * * * * * *
(c) Limitation on Outstanding Guarantees.--No guarantee or
commitment to guarantee shall be made with respect to any note
or other obligation if the total outstanding notes or
obligations of the issuer guaranteed under this title
(excluding any amount defeased under the contract entered into
under section 602(a)(1)) would thereby exceed an amount equal
to 5 times the amount of the grant approval for the issuer
pursuant to title III or VIII, as applicable.
* * * * * * *
SEC. 602. SECURITY AND REPAYMENT.
(a) Requirements on Issuer.--To assure the repayment of
notes or other obligations and charges incurred under this
title and as a condition for receiving such guarantees, the
Secretary shall require the Indian tribe [or housing entity],
housing entity, or Department of Hawaiian Home Lands issuing
such notes or obligations to--
(1) * * *
* * * * * * *
(3) demonstrate that the extent of such issuance and
guarantee under this title is within the financial
capacity of the tribe or Department and is not likely
to impair the ability to use grant amounts under title
I or VIII, as applicable, taking into consideration the
requirements under section 203(b) or 811(b), as
applicable; and
* * * * * * *
(b) Repayment From Grant Amounts.--Notwithstanding any
other provision of this Act--
* * * * * * *
(2) grants allocated under this Act for an Indian
tribe [or housing entity], housing entity, or the
Department of Hawaiian Home Lands (including program
income derived therefrom) may be used to pay principal
and interest due (including such servicing,
underwriting, and other costs as may be specified in
regulations issued by the Secretary) on notes or other
obligations guaranteed pursuant to this title.
* * * * * * *
SEC. 603. PAYMENT OF INTEREST.
The Secretary may make, and contract to make, grants, in
such amounts as may be approved in appropriations Acts, to or
on behalf of an Indian tribe [or housing entity], housing
entity, or the Department of Hawaiian Home Lands issuing notes
or other obligations guaranteed under this title, to cover not
to exceed 30 percent of the net interest cost (including such
servicing, underwriting, or other costs as may be specified in
regulations of the Secretary) to the borrowing entity or agency
of such obligations. The Secretary may also, to the extent
approved in appropriations Acts, assist the issuer of a note or
other obligation guaranteed under this title in the payment of
all or a portion of the principal and interest amount due under
the note or other obligation, if the Secretary determines that
the issuer is unable to pay the amount because of circumstances
of extreme hardship beyond the control of the issuer.
* * * * * * *
SEC. 605. LIMITATIONS ON AMOUNT OF GUARANTEES.
(a) * * *
(b) Authorization of Appropriations for Credit Subsidy.--
There are authorized to be appropriated to cover the costs (as
such term is defined in section 502 of the Congressional Budget
Act of 1974) of guarantees under this title such sums as may be
necessary for each of fiscal years [1997 through 2007] 2008
through 2012.
* * * * * * *
TITLE VIII--HOUSING ASSISTANCE FOR NATIVE HAWAIIANS
* * * * * * *
SEC. 824. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Department
of Housing and Urban Development for grants under this title
such sums as may be necessary for each of [fiscal years 2001,
2002, 2003, 2004, and 2005.] fiscal years 2008, 2009, 2010,
2011 and 2012.
* * * * * * *
SECTION 184A OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992
SEC. 184A. LOAN GUARANTEES FOR NATIVE HAWAIIAN HOUSING.
* * * * * * *
(b) Authority.--To provide access to sources of private
financing to Native Hawaiian families who otherwise could not
acquire housing financing because of the unique legal status of
the Hawaiian Home Lands [or as a result of a lack of access to
private financial markets], the Secretary may guarantee an
amount not to exceed 100 percent of the unpaid principal and
interest that is due on an eligible loan under subsection (c).
(c) Eligible Loans.--Under this section, a loan is an
eligible loan if that loan meets the following requirements:
(1) * * *
[(2) Eligible housing--
[(A) In general.--The loan will be used to
construct, acquire, or rehabilitate not more
than 4-family dwellings that are standard
housing and are located on Hawaiian Home Lands
for which a housing plan described in
subparagraph (B) applies.
[(B) Housing plan.--A housing plan described
in this subparagraph is a housing plan that--
[(i) has been submitted and approved
by the Secretary under section 803 of
the Native American Housing Assistance
and Self-Determination Act of 1996; and
[(ii) provides for the use of loan
guarantees under this section to
provide affordable homeownership
housing on Hawaiian Home Lands.]
(2) Eligible housing.--The loan will be used to
construct, acquire, refinance, or rehabilitate 1- to 4-
family dwellings that are standard housing and are
located on Hawaiian Home Lands.
* * * * * * *
(j) Hawaiian Housing Loan Guarantee Fund.--
(1) * * *
* * * * * * *
(7) Authorization of appropriations.--There are
authorized to be appropriated to the Guarantee Fund to
carry out this section such sums as may be necessary
for each of [fiscal years 2001, 2002, 2003, 2004, and
2005.] fiscal years 2008, 2009, 2010, 2011 and 2012.