Senators’ Legislation Would Improve Access to Affordable Capital for Native Communities in Minnesota, Nationwide

WASHINGTON, D.C. [6/24/21]—U.S. Senators Tina Smith (D-Minn.) and Mike Rounds (R-S.D.) are pressing bipartisan legislation to help Native families living in rural areas achieve homeownership.

Right now, the homeownership rate for Native American households is around 54 percent, while the rate for white households is 72 percent. A study from the Federal Reserve Bank of Minneapolis’ Center for Indian Country Development also found that Native households often face higher mortgage costs when seeking to buy a home, especially when those loans are made on reservation lands. Sens. Smith and Rounds want to leverage the deep community ties of Native Community Development Financial Institutions (CDFIs) to expand access to affordable capital in Native communities and reduce barriers to homeownership.

“I’ve had the great privilege of visiting and meeting with Tribal leaders from Minnesota to hear firsthand about how the affordable housing crisis impacts their communities. I’ve heard over and over again about how high mortgage costs and barriers to capital contribute to disparities in homeownership,” said Sen. Smith, a member of the Senate Indian Affairs Committee and Chair of the Housing Subcommittee on the Banking, Housing, and Urban Affairs Committee. “I've worked with Sen. Rounds on Native housing issues for several years, and I’m glad to have him as a partner on this effort to expand the role Native CDFIs can play in helping families find a safe, stable place to call home. Helping families achieve the dream of homeownership should always be bipartisan.”

“For many Americans, home ownership is part of the American dream and a key step toward creating wealth,” said Sen. Rounds. “The USDA Rural Development’s Section 502 Direct Loan program provides home loan assistance to rural families with low or modest income, but this program was failing to reach tribal members in a meaningful way. In order to better serve Native American communities, the USDA launched a 502 lending pilot program in 2018 which partners with Native Community Development Financial Institutions (CDFIs) to help Native American families realize that dream of home ownership. In South Dakota, nearly all the funds from this pilot program have been obligated and are in this process of being repaid. I am introducing legislation with Sen. Smith to permanently reauthorize this pilot program, so even more tribal families in South Dakota can access affordable home loans.”

“NAIHC is excited to see efforts to expand the successful USDA relending pilot program that utilizes Native CDFIs to expand homeownership in tribal communities. NAIHC would like to thank Senator Smith, Senator Rounds and all of the cosponsors for their work on tribal housing issues and NAIHC stands ready to help support passage of the Native American Rural Homeownership Improvement Act,” said Adrian Stevens, Acting Chairman of the National American Indian Housing Council.

“The 502 Relending Pilot in South Dakota has allowed Four Bands to unlock federal capital to help our clients buy and build the homes of their dreams.  This opportunity has created an unprecedented homeownership demand which is starting to stabilize wealth for generations to come,” said Lakota Vogel, Executive Director of Four Bands Community Fund.

Sens. Smith and Rounds’ legislation—the Native American Rural Homeownership Improvement Act—expand an existing U.S. Department of Agriculture (USDA) pilot program, in which the USDA has partnered with Native Community Development Financial Institutions (CDFIs) to leverage their deep ties in local communities and deploy loans to eligible Native borrowers. The bill, introduced this month, would authorize a national relending program so that Native CDFIs across the country can help increase access to affordable home loans in rural Native communities.

You can learn more about the legislation—which is also supported by Sens. John Thune (R-S.D.), Jon Tester (D-Mont.), Kevin Cramer (R-N.D.) and Brian Schatz (D-Hawaii) —here and access text of the bill here.

Earlier this year, Sen. Smith—in her first hearing as Chair of a key Senate housing panel—highlighted the urgent need for investment in housing for Native Americans in Minnesota and across the country. Sen. Smith, joined at the bipartisan hearing by the Subcommittee’s Ranking Member Sen. Rounds, promised to continue efforts to knock down the systemic barriers that have kept generations of Native Americans from having a safe, stable, and affordable place to live. With the introduction of their Native American Rural Homeownership Improvement Act, Sens. Smith and Rounds are making good on that promise.

Sens. Smith and Rounds’ bill is endorsed by the United Native American Housing Association, National American Indian Housing Council, Local Initiatives Support Corporation (LISC), Native CDFI Network, National Rural Housing Coalition, National Low Income Housing Coalition, South Dakota Native Homeownership Coalition, Rural Community Assistance Corporation (RCAC), Housing Assistance Council, Opportunity Finance Network, Four Bands Community Fund, Mazaska Owecaso Otipi Financial, Great Plains Tribal Chairmen’s Association, National Congress of American Indians, Enterprise Community Partners and Oweesta Corporation.