Press Release

TUBA CITY, AZ - The Federal Home Loan Bank of San Francisco (Bank) is working with Native American organizations to overcome hurdles that have slowed the Bank’s efforts to increase the supply of affordable housing in Indian Territory.

Lawrence H. Parks, Senior Vice President, External and Legislative Affairs, testified yesterday before a House Committee on Financial Services Subcommittee that the Bank is committed to finding ways to provide affordable housing on Indian land. Mr. Parks said the Bank spent three years negotiating with regulators before it received the approval to proceed with funding three housing projects on Native American reservations.

The need to increase the supply of affordable housing on Indian land was underscored this week by several congressmen, who toured a Navajo reservation.

Members of the House Subcommittee on Housing and Community Opportunity were appalled at the living conditions. "I visited Kaibito and saw three children living in a mud hut with their grandmother. Their stomachs were distended with dysentery. When I came home, I cried," Rep. Rick Renzi (R-AZ) told reporters. "I thought, `How can I call myself a congressman and not do something about this?’ "

Mr. Parks said the Bank continues to work with trade groups and others "to find creative approaches to address lenders needs and the rights of tribes on their lands.’’

He noted, for instance, that the Bank’s Affordable Housing Program (AHP) has approved grants for seven projects on Native American lands. The projects will provide 282 units of affordable rental housing and 18 units of affordable ownership housing, resulting in attractive housing alternatives for 300 families.

However, Mr. Parks said that it was not an easy path.

"The funding by the San Francisco Bank of AHP projects on Native American lands has not been without difficulty, primarily because of the unique legal status of tribes and their lands,’’ Mr. Parks testified. "The sovereignty of Native American lands and their trust status create legal problems for traditional methods of housing finance."

Mr. Parks said lenders traditionally place liens on the property when originating a mortgage, which allows them to take possession or sell the property to satisfy the lien if there is a default. But that scenario is generally not available on tribal lands.

"Differences in tribal laws and sovereignty constraints make an across the board prescriptive solution for Native American lending nearly impossible absent some mechanism for ensuring payment in the event of default in lieu of the traditional foreclosure process,’’ he said, noting that there needs to be a balance between Native American sovereignty issues and the foreclosure concerns for financial institutions.

"Providing adequate housing on Indian land needs to be a priority for both the public and private sectors,’’ said Mr. Parks. "The San Francisco Bank will continue to cut through the red tape and forge private-public partnerships that can produce affordable housing and lift the standard of living for many Native Americans.’’

The Federal Home Loan Bank of San Francisco

The Federal Home Loan Bank of San Francisco delivers low-cost funding and other services that help member financial institutions make home mortgages to people of all income levels and provide credit that supports neighborhoods and communities. The Bank also funds community investment programs that help members create affordable housing and promote community economic development. The Bank serves and is owned by 341 commercial bank, savings institution, credit union, thrift and loan, and insurance company members headquartered in Arizona, California, and Nevada.

Contact:
Dwight Alexander, (415) 616-2678
alexandd@fhlbsf.com

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