FY 2023 Authorization & Appropriations Requests to Support Native

Homeownership Through Native CDFIs

The U.S. Department of Agriculture (USDA) Rural Development offers the 502 single family housing direct loan

program to borrowers in rural communities. Although this program is available on tribal land, of the 6,194

direct loans made nationally by Rural Development in FY 2019, only six of them were to borrowers on tribal

land.

program and enabled them to relend to qualified families for the construction, acquisition, and rehabilitation

of affordable housing on trust land. Through this demonstration, the two Native CDFIs in partnership with

USDA made nearly double the number of loans on these two reservations than USDA deployed on its own on

the same two reservations during the previous ten years.

This enhancement to USDA’s existing program provides an opportunity to leverage federal funds with private

resources to do business on tribal land. While Rural Development has limited staff resources to originate

Section 502 direct loans on tribal land, Native CDFIs have experience and expertise lending in this market, and

they are well-positioned to deploy mortgage capital efficiently. In addition, they provide extensive financial

education, foreclosure prevention counseling, and other technical assistance to their clients.

S. 2092, H.R. 6331) would make the

USDA 502 home loan relending pilot permanent by authorizing the USDA Secretary to use $50 million of

existing 502 single family housing direct loan appropriations for a national relending program so that Native

CDFIs across the country can increase access to affordable home loans in rural Native communities.

This legislation would help the existing USDA 502 single family housing direct loan program work better in

Indian Country. To prioritize lending on trust land, it waives the pilot’s 20% match requirement for loans on

tribal land. In addition, to make the program consistent with other existing USDA programs, it authorizes an

operating grant for Native CDFIs who relend under this program.

Senators Tina Smith (D-MN) and Mike Rounds (R-SD) introduced this bi-partisan legislation, and it is co-

sponsored by Senators Catherine Cortez Masto (D-NV), Kevin Cramer (R-ND), Ben Ray Lujan (D-NM), Brian

Schatz (D-HI), Jon Tester (D-MT), John Thune (R-SD) and Elizabeth Warren (D-MA). To co-sponsor S. 2092,

please contact Adam Schiff at

H.R. 6331 was introduced by Representative Dusty Johnson (R-SD) and is co-sponsored by Reps. Kai Kahele (D-

HI) and Teresa Leger Fernandez (D-NM). To co-sponsor H.R. 6331, please contact Hannah Kagey at

The President’s FY 2023 Budget request includes funding for the continuation and expansion of the Native

American 502 home loan relending program as part of the existing USDA 502 single family housing direct loan

program. We respectfully request the subcommittee on Agriculture, Rural Development, Food and Drug

Administration, and Related Agencies set aside $50 million for the Single Family Housing Direct Loan

Relending Program for Native Americans in the FY 2023 subcommittee mark.

According to Oweesta Corporation, a national Native CDFI intermediary, Native CDFI housing lenders had to

deny over $40 million in loans in 2021 due to a lack of lending capital. They also anticipate needing an

additional $94 million in 2022 to satisfy their growing loan demand. This proposed set-aside would go a long

way to addressing this need for lending capital for mortgages on tribal land.

Housing Assistance Council

Local Initiatives Support Corporation (LISC)

Minnesota Housing Partnership (MHP)

National Congress of American Indians

National Low Income Housing Coalition

National NeighborWorks Association

National Rural Housing Coalition

Native CDFI Network