Native American Direct Loan Improvement Act of 2023

Subjects: Native Americans, Building construction, Housing finance and home ownership, Indian social and development programs, Residential rehabilitation and home repair, Veterans' loans, housing, homeless programs

Summary:  <p><b>Native American Direct Loan Improvement Act of 2023</b></p> <p>This bill revises the Native American Direct Loan (NADL) program, which is administered by the Department of Veterans Affairs (VA). Under the NADL program, the VA makes loans directly to Native American veterans to purchase, construct, improve, or refinance their homes located on federal trust land.</p> <p>Specifically, the bill expands the NADL program by allowing Native American veterans to refinance other existing mortgage loans on the same property if certain conditions are met. </p> <p>Additionally, the bill requires the VA to conduct additional program outreach by partnering with local service providers (e.g., tribal organizations and nonprofit organizations) to conduct outreach, homebuyer education, housing counseling, and post-purchase education.</p> <p>The bill directs the VA to assign a sufficient number of personnel to carry out the NADL program, including construction and valuation specialists to assist with issues unique to new construction and renovations on trust land.</p> <p>The bill also authorizes the VA to make a loan with a 1% interest rate to a Native community development financial institution to allow the institution to relend loan amounts to qualified Native American veterans residing on federal trust land.</p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 185 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                 S. 185

   To amend title 38, United States Code, to improve the program for 
 direct housing loans made to Native American veterans, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 31, 2023

Mr. Rounds (for himself and Mr. Tester) introduced the following bill; 
which was read twice and referred to the Committee on Veterans' Affairs

_______________________________________________________________________

                                 A BILL


 
   To amend title 38, United States Code, to improve the program for 
 direct housing loans made to Native American veterans, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Native American Direct Loan 
Improvement Act of 2023''.

SEC. 2. IMPROVEMENTS TO PROGRAM FOR DIRECT HOUSING LOANS MADE TO NATIVE 
              AMERICAN VETERANS BY THE SECRETARY OF VETERANS AFFAIRS.

    (a) General Authorities and Requirements.--
            (1) Direct housing loans to native american veterans.--
        Section 3762(a) of title 38, United States Code, is amended to 
        read as follows:
    ``(a) The Secretary may make a direct housing loan to a Native 
American veteran under this subchapter if the Secretary ensures the 
following:
            ``(1) That each Native American veteran to whom the 
        Secretary makes a direct housing loan under this subchapter--
                    ``(A) holds, possesses, or purchases using the 
                proceeds of the loan a meaningful interest in a lot or 
                dwelling (or both) that is located on trust land; and
                    ``(B) will purchase, construct, or improve (as the 
                case may be) a dwelling on the lot using the proceeds 
                of the loan.
            ``(2) That each such Native American veteran will convey to 
        the Secretary by an appropriate instrument the interest 
        referred to in paragraph (1)(A) as security for a direct 
        housing loan under this subchapter.
            ``(3) That the Secretary, including the Secretary's 
        employees or agents, may enter upon the trust land for the 
        purposes of carrying out such actions as the Secretary 
        determines are necessary, including--
                    ``(A) to evaluate the advisability of the loan;
                    ``(B) to monitor any purchase, construction, or 
                improvements carried out using the proceeds of the 
                loan; and
                    ``(C) to manage any servicing or post-foreclosure 
                activities, including acquisition, property 
                inspections, and property management.
            ``(4) That there are established standards and procedures 
        that apply to the foreclosure of the interest conveyed by a 
        Native American veteran pursuant to paragraph (2), including--
                    ``(A) procedures for foreclosing the interest; and
                    ``(B) procedures for the resale of the lot or 
                dwelling (or both) purchased, constructed, or improved 
                using the proceeds of the loan.
            ``(5) That the loan is made in a responsible and prudent 
        manner, subject to standards and procedures as are necessary 
        for the reasonable protection of the financial interests of the 
        United States.''.
            (2) Memorandums of understanding, agreements, and 
        determinations.--Section 3762(b) of such title is amended to 
        read as follows:
    ``(b)(1) To carry out the purpose of subsection (a), the Secretary 
may--
            ``(A) enter into a memorandum of understanding with a 
        tribal organization, other entity, or individual;
            ``(B) rely on agreements or determinations of other Federal 
        agencies to guarantee, insure, or make loans on trust land; and
            ``(C) enter into other agreements or take such other 
        actions as the Secretary determines necessary.
    ``(2) If the Secretary determines that the requirements under 
subsection (a) are not being enforced by a tribal organization, other 
entity, or individual that is a party to any memorandum of 
understanding, agreement, or determination described in paragraph (1), 
the Secretary may cease making new direct housing loans to Native 
American veterans under this subchapter within the area of the 
authority of the tribal organization, other entity, or individual (as 
the case may be).''.
    (b) Direct Loans to Native American Veterans To Refinance Existing 
Mortgage Loans.--Section 3762(h) of such title is amended to read as 
follows:
    ``(h) The Secretary may make direct loans to Native American 
veterans in order to enable such veterans to refinance existing 
mortgage loans for any of the following purposes:
            ``(1) To refinance an existing loan made under this 
        section, if the loan--
                    ``(A) meets the requirements set forth in 
                subparagraphs (B), (C), and (E) of paragraph (1) of 
                section 3710(e) of this title;
                    ``(B) will bear an interest rate at least one 
                percentage point less than the interest rate borne by 
                the loan being refinanced; and
                    ``(C) complies with paragraphs (2) and (3) of 
                section 3710(e) of this title, except that for the 
                purposes of this subsection the reference to subsection 
                (a)(8) of section 3710 of this title in such paragraphs 
                (2) and (3) shall be deemed to be a reference to this 
                subsection.
            ``(2) To refinance an existing mortgage loan not made under 
        this section on a dwelling owned and occupied by the veteran as 
        the veteran's home, if all of the following requirements are 
        met:
                    ``(A) The loan will be secured by the same dwelling 
                as was the loan being refinanced.
                    ``(B) The loan will provide the veteran with a net 
                tangible benefit.
                    ``(C) The nature and condition of the property is 
                such as to be suitable for dwelling purposes.
                    ``(D) The amount of the loan does not exceed either 
                of the following:
                            ``(i) 100 percent of the reasonable value 
                        of the dwelling, with such reasonable value 
                        determined under the procedures established by 
                        the Secretary under subsection (d)(2).
                            ``(ii) An amount equal to the sum of the 
                        balance of the loan being refinanced and such 
                        closing costs (including any discount points) 
                        as may be authorized by the Secretary to be 
                        included in the loan.
                    ``(E) Notwithstanding subparagraph (D), if a loan 
                is made for both the purpose of this paragraph and to 
                make energy efficiency improvements, the loan must not 
                exceed either of the following:
                            ``(i) 100 percent of the reasonable value 
                        of the dwelling as improved for energy 
                        efficiency, with such reasonable value 
                        determined under the procedures established by 
                        the Secretary under subsection (d)(2).
                            ``(ii) The amount referred to under 
                        subparagraph (D)(ii), plus the applicable 
                        amount specified under section 3710(d)(2) of 
                        this title.
                    ``(F) The loan meets all other requirements the 
                Secretary may establish under this subchapter.
                    ``(G) The existing mortgage being refinanced is a 
                first lien on the property and secured of record.
            ``(3) To refinance an existing mortgage loan to repair, 
        alter, or improve a dwelling owned by the veteran and occupied 
        by the veteran as the veteran's home, if all of the following 
        requirements are met:
                    ``(A) The loan will be secured by the same dwelling 
                as was the loan being refinanced.
                    ``(B) The nature and condition of the property is 
                such as to be suitable for dwelling purposes, and the 
                repair, alteration, or improvement substantially 
                protects or improves the basic livability or utility of 
                such property.
                    ``(C) The amount of the loan, including the costs 
                of repairs, alterations, and improvements, does not 
                exceed either of the following:
                            ``(i) 100 percent of the reasonable value 
                        of the dwelling as repaired, altered, or 
                        improved, with such reasonable value determined 
                        under the procedures established by the 
                        Secretary under subsection (d)(2).
                            ``(ii) An amount equal to the sum of--
                                    ``(I) the balance of the loan being 
                                refinanced;
                                    ``(II) the actual cost of repairs, 
                                alterations, or improvements; and
                                    ``(III) such closing costs 
                                (including any discount points) as may 
                                be authorized by the Secretary to be 
                                included in the loan.
                    ``(D) The loan meets all other requirements the 
                Secretary may establish under this subchapter.
                    ``(E) The existing mortgage loan being refinanced 
                is a first lien on the property and secured of 
                record.''.
    (c) Expansion of Outreach Program on Availability of Direct Housing 
Loans for Native American Veterans.--Section 3762(i)(2) of such title 
is amended by adding at the end the following new subparagraph:
            ``(G) Pursuant to subsection (g)(4), assisting Native 
        American veterans in qualifying for mortgage financing by--
                    ``(i) partnering with local service providers, such 
                as tribal organizations, tribally designated housing 
                entities, Native community development financial 
                institutions, and nonprofit organizations, for 
                conducting outreach, homebuyer education, housing 
                counseling, and post-purchase education; and
                    ``(ii) providing other technical assistance as 
                needed.
            ``(H) Attending conferences and conventions conducted by 
        the network of Native community development financial 
        institutions and other Native American homeownership 
        organizations to provide information and training to Native 
        community development financial institutions about the 
        availability of the relending program under section 3762A of 
        this title.''.
    (d) Adequate Personnel.--Section 3762 of such title is amended by 
adding at the end the following new subsection:
    ``(k) The Secretary shall assign a sufficient number of personnel 
of the Department dedicated to carrying out the authority of the 
Secretary under this subchapter, including construction and valuation 
specialists to assist with issues unique to new construction and 
renovations on trust land.''.
    (e) Definitions.--Section 3765 of such title is amended--
            (1) in paragraph (1)--
                    (A) by amending subparagraph (C) to read as 
                follows:
                    ``(C) is located in the State of Alaska within a 
                region established under section 7(a) of the Alaska 
                Native Claims Settlement Act (43 U.S.C. 1606(a));'';
                    (B) in subparagraph (D), by striking the period at 
                the end and inserting a semicolon; and
                    (C) by adding at the end the following new 
                subparagraphs:
                    ``(E) is defined by the Secretary of the Interior 
                and recognized by the United States as land over which 
                an Indian Tribe has governmental dominion; or
                    ``(F) is on any land that the Secretary determines 
                is provided to Native American veterans because of 
                their status as Native Americans.''; and
            (2) by adding at the end the following new paragraphs:
            ``(6) The term `community development financial 
        institution' has the meaning given that term in section 103 of 
        the Community Development Banking and Financial Institutions 
        Act of 1994 (12 U.S.C. 4702).
            ``(7) The term `Indian Tribe' means any Indian tribe, band, 
        nation, or other organized group or community, including any 
        Alaska Native village or regional or village corporation as 
        defined in or established pursuant to the Alaska Native Claims 
        Settlement Act (43 U.S.C. 1601 et seq.), which is recognized as 
        eligible for the special programs and services provided by the 
        United States to Indians because of their status as Indians.
            ``(8) The term `Native community development financial 
        institution' means any entity--
                    ``(A) that has been certified as a community 
                development financial institution by the Secretary of 
                the Treasury;
                    ``(B) that is not less than 51 percent owned or 
                controlled by Native Americans; and
                    ``(C) for which not less than 51 percent of the 
                activities of the entity serve Native Americans.
            ``(9) The term `net tangible benefit' shall have such 
        meaning as the Secretary determines appropriate, but shall 
        include the refinance of an interim construction loan.
            ``(10) The term `other technical assistance' means services 
        to assist a Native American veteran to navigate the steps 
        necessary for securing a mortgage loan on trust land, including 
        pre-development activities related to utilities, identifying 
        appropriate residential construction services, and obtaining 
        lease clearances and title status reports from the applicable 
        tribal organization or the Bureau of Indian Affairs.
            ``(11) The term `tribally designated housing entity' has 
        the meaning given that term in section 4 of the Native American 
        Housing Assistance and Self-Determination Act of 1996 (25 
        U.S.C. 4103).''.
    (f) Interest Rate Reduction Financing Loan.--Section 3729(b)(4)(F) 
of such title is amended by striking ``3762(h)'' and inserting 
``3762(h)(1)''.
    (g) Regulations.--Section 3761 of such title is amended by adding 
at the end the following new subsection:
    ``(c) The Secretary shall prescribe such regulations as may be 
necessary to carry out this subchapter.''.

SEC. 3. NATIVE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION RELENDING 
              PROGRAM.

    (a) In General.--Subchapter V of chapter 37 of title 38, United 
States Code, is amended by inserting after section 3762 the following 
new section:
``Sec. 3762A. Native community development financial institution 
              relending program
    ``(a) Purpose.--The Secretary may make a loan to a Native community 
development financial institution for the purpose of allowing the 
institution to relend loan amounts to qualified Native American 
veterans, subject to the requirements of this section.
    ``(b) Standards.--
            ``(1) In general.--The Secretary shall establish standards 
        to be used in evaluating whether to make a loan to a Native 
        community development financial institution under this section.
            ``(2) Requirements.--In establishing standards under 
        paragraph (1), the Secretary shall ensure that a Native 
        community development financial institution--
                    ``(A) is able to originate and service loans for 
                single-family homes;
                    ``(B) is able to operate the relending program in a 
                manner consistent with the mission of the Department to 
                serve veterans; and
                    ``(C) uses loan amounts received under this section 
                only for the purpose of relending, as described in 
                subsection (c), to Native American veterans.
    ``(c) Relending Requirements.--
            ``(1) In general.--A Native community development financial 
        institution that receives a loan under this section shall use 
        the loan amounts to make loans to Native American veterans 
        residing on trust land.
            ``(2) Requirements.--A loan to a Native American veteran 
        made by a Native community development financial institution 
        under paragraph (1) shall--
                    ``(A) be limited either to the purpose of purchase, 
                construction, or improvement of a dwelling located on 
                trust land or to the refinance of an existing mortgage 
                loan for a dwelling on trust land, consistent with the 
                requirements of section 3762(h) of this title; and
                    ``(B) comply with such terms and conditions as the 
                Secretary determines are necessary to protect against 
                predatory lending, including the interest rate charged 
                on a loan to a Native American veteran.
    ``(d) Repayment.--A loan made to a Native community development 
financial institution under this section shall--
            ``(1) be payable to the Secretary upon such terms and 
        conditions as are prescribed in regulations pursuant to this 
        subchapter; and
            ``(2) bear interest at a rate of one percent.
    ``(e) Oversight.--Subject to notice and opportunity for a hearing, 
whenever the Secretary finds with respect to loans made under 
subsection (a) or (c) that any Native community development financial 
institution has failed to maintain adequate loan accounting records, to 
demonstrate proper ability to service loans adequately, or to exercise 
proper credit judgment, or that such Native community development 
financial institution has willfully or negligently engaged in practices 
otherwise detrimental to the interest of veterans or of the Government, 
the Secretary may take such actions as the Secretary determines 
necessary to protect veterans or the Government, such as requiring 
immediate repayment of any loans made under subsection (a) and the 
assignment to the Secretary of loans made under subsection (c).''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 37 of such title is amended by inserting after the item 
relating to section 3762 the following new item:

``3762A. Native community development financial institution relending 
                            program.''.
    (c) Native American Veteran Housing Loan Program Account.--Section 
3763 of such title is amended by adding at the end the following new 
subsection:
    ``(c) Of amounts available in the Account, the Secretary may use 
for loans made under section 3762A of this title--
            ``(1) in fiscal year 2024, not more than $5,000,000; and
            ``(2) in any fiscal year after fiscal year 2024, an amount 
        as determined necessary by the Secretary to meet the demand for 
        such loans.''.
                                 &lt;all&gt;
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