Federal

Native American Direct Loan Improvement Act of 2023

Source: Congress.gov · 3,405 words in original text

What This Bill Does

This bill makes changes to the Veterans Affairs program that gives direct housing loans to Native American veterans. The bill improves how the Department of Veterans Affairs handles these loans for homes built on trust land (land held in trust by the federal government for Native American tribes). The bill also creates a new program where Native community development financial institutions can borrow money from the Department to relend to Native American veterans. ##

Who It Affects

- Native American veterans seeking housing loans - The Department of Veterans Affairs - Tribal organizations - Native community development financial institutions - Native American housing entities - Nonprofit organizations providing homebuyer services - The Bureau of Indian Affairs ##

Key Provisions

- The Secretary of Veterans Affairs may make direct housing loans to Native American veterans who hold a meaningful interest in a lot or dwelling on trust land and will purchase, construct, or improve a dwelling with the loan proceeds (Sec. 2(a)(1)) - Native American veterans must give the Secretary their property interest as security for the loan, and the Secretary may enter trust land to evaluate the loan, monitor construction, and manage any foreclosure activities (Sec. 2(a)(1)) - The Secretary may make loans to refinance existing mortgages for three purposes: refinancing existing direct loans with a lower interest rate, refinancing other mortgages to provide net tangible benefit, or refinancing mortgages to repair or improve dwellings on trust land (Sec. 2(b)) - The Department must have adequate personnel, including construction and valuation specialists, dedicated to carrying out this program and addressing issues unique to new construction on trust land (Sec. 2(d)) - The Secretary may make loans to Native community development financial institutions so they can relend money to qualified Native American veterans for homes on trust land, with these institutions bearing one percent interest on the loans from the Secretary (Sec. 3) ##

What Changes

The bill expands who can receive direct housing loans from the Department of Veterans Affairs by broadening the definition of trust land to include land defined by the Secretary of the Interior and recognized by the United States as land over which an Indian Tribe has governmental dominion, or any land the Secretary determines is provided to Native American veterans because of their status as Native Americans. The bill allows the Department to enter into memorandums of understanding with tribal organizations and other entities, and allows the Department to rely on agreements from other federal agencies when making these loans. The bill requires the Department to conduct expanded outreach to Native American veterans through partnerships with local service providers like tribal organizations, housing entities, and community development financial institutions. The Department must also attend conferences and conventions conducted by Native American homeownership organizations. A new relending program is created where Native community development financial institutions can receive loans from the Department to relend to Native American veterans. These institutions must be at least 51 percent owned or controlled by Native Americans and must use at least 51 percent of their activities to serve Native Americans. The bill allows the Secretary to stop making new direct housing loans in a specific area if the tribal organization or other entity responsible for enforcing loan requirements is not doing so. ##

Important Definitions

- **Trust land**: Land held in trust by the federal government for Native American tribes, or defined by the Secretary of the Interior and recognized as land over which an Indian Tribe has governmental dominion, or any land the Secretary determines is provided to Native American veterans because of their status as Native Americans (Sec. 2(e)) - **Indian Tribe**: Any Indian tribe, band, nation, or organized group or community, including Alaska Native villages or regional or village corporations established under the Alaska Native Claims Settlement Act, that is recognized as eligible for special programs and services provided by the United States because of their status as Indians (Sec. 2(e)) - **Native community development financial institution**: An entity certified as a community development financial institution by the Secretary of the Treasury that is at least 51 percent owned or controlled by Native Americans and where at least 51 percent of the entity's activities serve Native Americans (Sec. 2(e)) - **Community development financial institution**: Has the meaning given in section 103 of the Community Development Banking and Financial Institutions Act of 1994 (Sec. 2(e)) - **Net tangible benefit**: As determined appropriate by the Secretary, but includes the refinance of an interim construction loan (Sec. 2(e)) - **Other technical assistance**: Services to assist a Native American veteran navigate steps necessary for securing a mortgage loan on trust land, including pre-development activities related to utilities, identifying residential construction services, and obtaining lease clearances and title status reports from the applicable tribal organization or Bureau of Indian Affairs (Sec. 2(e)) - **Tribally designated housing entity**: Has the meaning given in section 4 of the Native American Housing Assistance and Self-Determination Act of 1996 (Sec. 2(e)) ##

Effective Date

Not specified in bill text

II 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 Amer- ican veterans, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Native American Di- 4 rect Loan Improvement Act of 2023’’. 5 SEC. 2. IMPROVEMENTS TO PROGRAM FOR DIRECT HOUS- 6 ING LOANS MADE TO NATIVE AMERICAN VET- 7 ERANS BY THE SECRETARY OF VETERANS AF- 8 FAIRS. 9 (a) GENERAL AUTHORITIES AND REQUIREMENTS.— 10 VerDate Sep 11 2014 20:42 Feb 12, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S185.IS S185 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •S 185 IS (1) DIRECT HOUSING LOANS TO NATIVE AMER- 1 ICAN VETERANS.—Section 3762(a) of title 38, 2 United States Code, is amended to read as follows: 3 ‘‘(a) The Secretary may make a direct housing loan 4 to a Native American veteran under this subchapter if the 5 Secretary ensures the following: 6 ‘‘(1) That each Native American veteran to 7 whom the Secretary makes a direct housing loan 8 under this subchapter— 9 ‘‘(A) holds, possesses, or purchases using 10 the proceeds of the loan a meaningful interest 11 in a lot or dwelling (or both) that is located on 12 trust land; and 13 ‘‘(B) will purchase, construct, or improve 14 (as the case may be) a dwelling on the lot using 15 the proceeds of the loan. 16 ‘‘(2) That each such Native American veteran 17 will convey to the Secretary by an appropriate in- 18 strument the interest referred to in paragraph 19 (1)(A) as security for a direct housing loan under 20 this subchapter. 21 ‘‘(3) That the Secretary, including the Sec- 22 retary’s employees or agents, may enter upon the 23 trust land for the purposes of carrying out such ac- 24 VerDate Sep 11 2014 20:42 Feb 12, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S185.IS S185 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •S 185 IS tions as the Secretary determines are necessary, in- 1 cluding— 2 ‘‘(A) to evaluate the advisability of the 3 loan; 4 ‘‘(B) to monitor any purchase, construc- 5 tion, or improvements carried out using the 6 proceeds of the loan; and 7 ‘‘(C) to manage any servicing or post-fore- 8 closure activities, including acquisition, property 9 inspections, and property management. 10 ‘‘(4) That there are established standards and 11 procedures that apply to the foreclosure of the inter- 12 est conveyed by a Native American veteran pursuant 13 to paragraph (2), including— 14 ‘‘(A) procedures for foreclosing the inter- 15 est; and 16 ‘‘(B) procedures for the resale of the lot or 17 dwelling (or both) purchased, constructed, or 18 improved using the proceeds of the loan. 19 ‘‘(5) That the loan is made in a responsible and 20 prudent manner, subject to standards and proce- 21 dures as are necessary for the reasonable protection 22 of the financial interests of the United States.’’. 23 VerDate Sep 11 2014 20:42 Feb 12, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S185.IS S185 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •S 185 IS (2) MEMORANDUMS OF UNDERSTANDING, 1 AGREEMENTS, AND DETERMINATIONS.—Section 2 3762(b) of such title is amended to read as follows: 3 ‘‘(b)(1) To carry out the purpose of subsection (a), 4 the Secretary may— 5 ‘‘(A) enter into a memorandum of under- 6 standing with a tribal organization, other entity, or 7 individual; 8 ‘‘(B) rely on agreements or determinations of 9 other Federal agencies to guarantee, insure, or make 10 loans on trust land; and 11 ‘‘(C) enter into other agreements or take such 12 other actions as the Secretary determines necessary. 13 ‘‘(2) If the Secretary determines that the require- 14 ments under subsection (a) are not being enforced by a 15 tribal organization, other entity, or individual that is a 16 party to any memorandum of understanding, agreement, 17 or determination described in paragraph (1), the Secretary 18 may cease making new direct housing loans to Native 19 American veterans under this subchapter within the area 20 of the authority of the tribal organization, other entity, 21 or individual (as the case may be).’’. 22 (b) DIRECT LOANS TO NATIVE AMERICAN VETERANS 23 TO REFINANCE EXISTING MORTGAGE LOANS.—Section 24 3762(h) of such title is amended to read as follows: 25 VerDate Sep 11 2014 20:42 Feb 12, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S185.IS S185 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •S 185 IS ‘‘(h) The Secretary may make direct loans to Native 1 American veterans in order to enable such veterans to refi- 2 nance existing mortgage loans for any of the following 3 purposes: 4 ‘‘(1) To refinance an existing loan made under 5 this section, if the loan— 6 ‘‘(A) meets the requirements set forth in 7 subparagraphs (B), (C), and (E) of paragraph 8 (1) of section 3710(e) of this title; 9 ‘‘(B) will bear an interest rate at least one 10 percentage point less than the interest rate 11 borne by the loan being refinanced; and 12 ‘‘(C) complies with paragraphs (2) and (3) 13 of section 3710(e) of this title, except that for 14 the purposes of this subsection the reference to 15 subsection (a)(8) of section 3710 of this title in 16 such paragraphs (2) and (3) shall be deemed to 17 be a reference to this subsection. 18 ‘‘(2) To refinance an existing mortgage loan not 19 made under this section on a dwelling owned and oc- 20 cupied by the veteran as the veteran’s home, if all 21 of the following requirements are met: 22 ‘‘(A) The loan will be secured by the same 23 dwelling as was the loan being refinanced. 24 VerDate Sep 11 2014 20:42 Feb 12, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S185.IS S185 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •S 185 IS ‘‘(B) The loan will provide the veteran with 1 a net tangible benefit. 2 ‘‘(C) The nature and condition of the prop- 3 erty is such as to be suitable for dwelling pur- 4 poses. 5 ‘‘(D) The amount of the loan does not ex- 6 ceed either of the following: 7 ‘‘(i) 100 percent of the reasonable 8 value of the dwelling, with such reasonable 9 value determined under the procedures es- 10 tablished by the Secretary under sub- 11 section (d)(2). 12 ‘‘(ii) An amount equal to the sum of 13 the balance of the loan being refinanced 14 and such closing costs (including any dis- 15 count points) as may be authorized by the 16 Secretary to be included in the loan. 17 ‘‘(E) Notwithstanding subparagraph (D), 18 if a loan is made for both the purpose of this 19 paragraph and to make energy efficiency im- 20 provements, the loan must not exceed either of 21 the following: 22 ‘‘(i) 100 percent of the reasonable 23 value of the dwelling as improved for en- 24 ergy efficiency, with such reasonable value 25 VerDate Sep 11 2014 20:42 Feb 12, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S185.IS S185 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •S 185 IS determined under the procedures estab- 1 lished by the Secretary under subsection 2 (d)(2). 3 ‘‘(ii) The amount referred to under 4 subparagraph (D)(ii), plus the applicable 5 amount specified under section 3710(d)(2) 6 of this title. 7 ‘‘(F) The loan meets all other require- 8 ments the Secretary may establish under this 9 subchapter. 10 ‘‘(G) The existing mortgage being refi- 11 nanced is a first lien on the property and se- 12 cured of record. 13 ‘‘(3) To refinance an existing mortgage loan to 14 repair, alter, or improve a dwelling owned by the 15 veteran and occupied by the veteran as the veteran’s 16 home, if all of the following requirements are met: 17 ‘‘(A) The loan will be secured by the same 18 dwelling as was the loan being refinanced. 19 ‘‘(B) The nature and condition of the 20 property is such as to be suitable for dwelling 21 purposes, and the repair, alteration, or improve- 22 ment substantially protects or improves the 23 basic livability or utility of such property. 24 VerDate Sep 11 2014 20:42 Feb 12, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S185.IS S185 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •S 185 IS ‘‘(C) The amount of the loan, including the 1 costs of repairs, alterations, and improvements, 2 does not exceed either of the following: 3 ‘‘(i) 100 percent of the reasonable 4 value of the dwelling as repaired, altered, 5 or improved, with such reasonable value 6 determined under the procedures estab- 7 lished by the Secretary under subsection 8 (d)(2). 9 ‘‘(ii) An amount equal to the sum 10 of— 11 ‘‘(I) the balance of the loan being 12 refinanced; 13 ‘‘(II) the actual cost of repairs, 14 alterations, or improvements; and 15 ‘‘(III) such closing costs (includ- 16 ing any discount points) as may be 17 authorized by the Secretary to be in- 18 cluded in the loan. 19 ‘‘(D) The loan meets all other require- 20 ments the Secretary may establish under this 21 subchapter. 22 ‘‘(E) The existing mortgage loan being re- 23 financed is a first lien on the property and se- 24 cured of record.’’. 25 VerDate Sep 11 2014 20:42 Feb 12, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S185.IS S185 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •S 185 IS (c) EXPANSION OF OUTREACH PROGRAM ON AVAIL- 1 ABILITY OF DIRECT HOUSING LOANS FOR NATIVE AMER- 2 ICAN VETERANS.—Section 3762(i)(2) of such title is 3 amended by adding at the end the following new subpara- 4 graph: 5 ‘‘(G) Pursuant to subsection (g)(4), assisting 6 Native American veterans in qualifying for mortgage 7 financing by— 8 ‘‘(i) partnering with local service providers, 9 such as tribal organizations, tribally designated 10 housing entities, Native community development 11 financial institutions, and nonprofit organiza- 12 tions, for conducting outreach, homebuyer edu- 13 cation, housing counseling, and post-purchase 14 education; and 15 ‘‘(ii) providing other technical assistance as 16 needed. 17 ‘‘(H) Attending conferences and conventions 18 conducted by the network of Native community de- 19 velopment financial institutions and other Native 20 American homeownership organizations to provide 21 information and training to Native community devel- 22 opment financial institutions about the availability of 23 the relending program under section 3762A of this 24 title.’’. 25 VerDate Sep 11 2014 20:42 Feb 12, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S185.IS S185 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •S 185 IS (d) ADEQUATE PERSONNEL.—Section 3762 of such 1 title is amended by adding at the end the following new 2 subsection: 3 ‘‘(k) The Secretary shall assign a sufficient number 4 of personnel of the Department dedicated to carrying out 5 the authority of the Secretary under this subchapter, in- 6 cluding construction and valuation specialists to assist 7 with issues unique to new construction and renovations 8 on trust land.’’. 9 (e) DEFINITIONS.—Section 3765 of such title is 10 amended— 11 (1) in paragraph (1)— 12 (A) by amending subparagraph (C) to read 13 as follows: 14 ‘‘(C) is located in the State of Alaska with- 15 in a region established under section 7(a) of the 16 Alaska Native Claims Settlement Act (43 17 U.S.C. 1606(a));’’; 18 (B) in subparagraph (D), by striking the 19 period at the end and inserting a semicolon; 20 and 21 (C) by adding at the end the following new 22 subparagraphs: 23 ‘‘(E) is defined by the Secretary of the In- 24 terior and recognized by the United States as 25 VerDate Sep 11 2014 20:42 Feb 12, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S185.IS S185 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •S 185 IS land over which an Indian Tribe has govern- 1 mental dominion; or 2 ‘‘(F) is on any land that the Secretary de- 3 termines is provided to Native American vet- 4 erans because of their status as Native Ameri- 5 cans.’’; and 6 (2) by adding at the end the following new 7 paragraphs: 8 ‘‘(6) The term ‘community development finan- 9 cial institution’ has the meaning given that term in 10 section 103 of the Community Development Banking 11 and Financial Institutions Act of 1994 (12 U.S.C. 12 4702). 13 ‘‘(7) The term ‘Indian Tribe’ means any Indian 14 tribe, band, nation, or other organized group or com- 15 munity, including any Alaska Native village or re- 16 gional or village corporation as defined in or estab- 17 lished pursuant to the Alaska Native Claims Settle- 18 ment Act (43 U.S.C. 1601 et seq.), which is recog- 19 nized as eligible for the special programs and serv- 20 ices provided by the United States to Indians be- 21 cause of their status as Indians. 22 ‘‘(8) The term ‘Native community development 23 financial institution’ means any entity— 24 VerDate Sep 11 2014 20:42 Feb 12, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S185.IS S185 pbinns on DSKJLVW7X2PROD with $$_JOB 12 •S 185 IS ‘‘(A) that has been certified as a commu- 1 nity development financial institution by the 2 Secretary of the Treasury; 3 ‘‘(B) that is not less than 51 percent 4 owned or controlled by Native Americans; and 5 ‘‘(C) for which not less than 51 percent of 6 the activities of the entity serve Native Ameri- 7 cans. 8 ‘‘(9) The term ‘net tangible benefit’ shall have 9 such meaning as the Secretary determines appro- 10 priate, but shall include the refinance of an interim 11 construction loan. 12 ‘‘(10) The term ‘other technical assistance’ 13 means services to assist a Native American veteran 14 to navigate the steps necessary for securing a mort- 15 gage loan on trust land, including pre-development 16 activities related to utilities, identifying appropriate 17 residential construction services, and obtaining lease 18 clearances and title status reports from the applica- 19 ble tribal organization or the Bureau of Indian Af- 20 fairs. 21 ‘‘(11) The term ‘tribally designated housing en- 22 tity’ has the meaning given that term in section 4 23 of the Native American Housing Assistance and 24 Self-Determination Act of 1996 (25 U.S.C. 4103).’’. 25 VerDate Sep 11 2014 20:42 Feb 12, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S185.IS S185 pbinns on DSKJLVW7X2PROD with $$_JOB 13 •S 185 IS (f) INTEREST RATE REDUCTION FINANCING 1 LOAN.—Section 3729(b)(4)(F) of such title is amended 2 by striking ‘‘3762(h)’’ and inserting ‘‘3762(h)(1)’’. 3 (g) REGULATIONS.—Section 3761 of such title is 4 amended by adding at the end th [Text truncated for display. Full text available on Congress.gov.]

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