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[Senate Report 110-126]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 262
110th Congress                                                   Report
                                 SENATE
 1st Session                                                    110-126

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  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.

                                  
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