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Housing Today Releases Support for NCAI Resolution That Calls Upon HUD to Consult With Tribal Nations Before Beginning Rule-Making on Government Down Payment Assistance.
ALBUQUERQUE, N.M., — Last Friday, Housing Today released a notice of support for the National Congress of American Indians (NCAI) vote to adopt a resolution (http://www.ncai.org/ABQ-19-025.pdf) calling upon the Department of Housing and Urban Development (HUD) not to discriminate against tribal nations providing down payment assistance for FHA mortgages and to respect tribal sovereignty by engaging in tribal consultation before HUD begins rule-making effecting government downpayment assistance by tribal nations.
NCAI’s resolution was adopted in response to an attempt by HUD earlier this year to limit tribal nation’s ability to act in their government capacity by defining government capacity for tribes as only those actions by tribal nations on reservations or with tribal members. HUD’s Mortgagee Letter 19-06, dated April 18, 2019 (Mortgagee Letter), had a disparate and devastating impact on tribal down payment assistance programs.
The Mortgagee Letter was adopted by HUD without any tribal consultation, in spite of the fact that it dramatically affected tribal nations and HUD policy required consultation. The Mortgagee Letter was withdrawn by HUD in consequence of a lawsuit brought by the Cedar Band of Paiutes. In court filings terminating the lawsuit, HUD indicated that it intends to proceed to rule-making, where it may again target tribal nations. The resolution by NCAI calls upon HUD to refrain from taking actions similar to those taken in the Mortgagee Letter that have a disparate impact on tribes.
HUD has reported to Congress that FHA mortgages that have down payment assistance provided by government entities perform less well than FHA mortgage loans that have no down payment assistance. HUD’s solution to improve the performance of government-assisted FHA mortgages, ostensibly contained in the Mortgage Letter, was to limit where government down payment programs can provide assistance.
HUD’s solution to improve the performance of government DPA has been severely criticized because HUD has not demonstrated that where assistance is provided has any connection to loan performance. Rather, HUD’s solution created regulatory monopolies, protecting poorly performing programs while significantly limiting borrowers’ options to receive assistance. In addition, HUD’s solution failed to provide important oversight to government DPA by failing to track the performance of individual government programs and measure and report that performance.
NCAI was established in 1944 and is the oldest and largest national organization of American Indian and Alaska Native tribal governments. NCAI works to enlighten the public toward a better understanding of the Indian people, to preserve Indian cultural values, and otherwise promote the health, safety and welfare of the Indian people.