New Mexico Housing Summit Construction Leveraging and Funding Through Rural Housing Service September 21, 2016

Programs Homeownership Home Repair Multi Family / Rental Housing Direct & Guaranteed Loans, Site Loans, loan packaging Home Repair Grants and Loans Multi Family / Rental Housing Community Facilities Water and Environmental Business and Cooperative 7

2009 - 2015 Summary of Investments $3.1 billion benefitting American Indians & Alaska Natives Including: Home Ownership Loans = $886.7 million (6,796 loans) Water and Environmental = $497.6 million Community Facilities = $577.4 million Broadband/Telecom = $372.2 million Electric = $596.1 million Rural Business and Cooperative Programs = $159.1 million FY 13 2nd Highest…$628.4 million

Single Family Housing Programs 502 Direct Loans Guaranteed Loans 504 Repair Loans Repair Grants 502/504 Loan Packaging 523 Mutual Self Help Assistance Grants 524 Site Loans Contact: State and/or Local Office www.rd.usda.gov 8

Sec. 502-Single Family Housing Direct Loans Lease & Ordinance Review (One-Stop) Low & Very-Low Income Borrowers Mortgages are fixed rate for 33-38 years Interest Rates (as low as 1%) 100% financing available. $140,000 loan at 1%=$450.00/month Loan Packaging – Formal and Informal Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI Applications & loans are processed at local RD office Loan can be used either as a down payment assistance to enable purchase with a loan through a private lending source, or as a sole source of assistance for those unable to obtain any part of the needed credit from another lending source HUD low and very-low income limits apply Loans can be on Tribal Trust land with approved lease and ordinances National Office reserve for certain targeted groups If loan default or in Government inventory (REO), RD can only transfer property to Tribe, Tribal Housing Authority or another member of the Tribe Manufactured housing for new construction only No waiver of Sovereign Immunity required (this applies to all RD activity) Be unable to obtain a loan from other sources on terms and conditions that they can reasonably be expected to meet A Tribe/TDHE may be able to refinance existing rental housing stock and use the proceeds from the sale to build new homes. o Example: Tribe/TDHE owns an existing home that is being rented out to an individual (renter). The renter wants to own the home and can qualify for a 502 mortgage. The renter (502 borrower) uses the loan to pay the Tribe for the home. The Tribe can use the revenue from the sale to meet other housing needs www.rd.usda.gov/programs-services/single-family-housing-direct-home-loans 5

National American Indian Housing Council June 2014 Leveraging 502 Direct Loans with affordable housing products can make a difference Total Home cost including closing cost $ 104,000 USDA RD Loan $62,000 BIA HIP Program grant $ 17,000 FHLBDM AHP grant $ 25,000 Payment which includes $ 75 per month for insurance Rural Development note rate (2.875%) $ 244 monthly or Rural Development subsidized rate( 1.0%)$ 185 monthly FHLBDM is the Federal Home Loan Bank of Des Moines. It is one of the Federal Home Loan Bank System which covers the entire US. They all have in their mission area to support Affordable housing and are required to set-aside a part of their net profit to funds Affordable Housing Programs. Federal Home Loan Bank of Des Moines program is structure through their member institution who which to provide grants to developers of low income projects and many tribes on South Dakota take advantage of this grant program. Sisseton Wahpeton Oyate received grant funds for down payment or loan reduction from Federal Home Loan Bank through Dacota Bank (member institution) -this grant was $25,000 per home with a 5 year forgivable mortgage filed. Bureau of Indian Affairs recently expanded the use of their House Improvement Program (HIP) to include down payment assistance for very income families to purchase homes. HIP is a down payment program that administered by the local tribal HIP Director or HIP Manager. Every tribe should have a HIP director or manager & that would be your first contact. The HIP director works with BIA on the home ownership down payment program. The HIP is up to 20% of total cost project cost or $ 20,000. National American Indian Housing Council June 2014

RCAC also includes: Alaska, Hawaii and the Western Pacific NW Regional Housing Development Corporation also includes: The Virgin Islands and Puerto Rico Packaging for 502 – The certified packaging process was created as a means to outreach and to increase the number of very low and low-income applicants. In addition, certified packagers assist RD staff with assembly of complete applications, which in turn allows staff to focus their time on loan origination and underwriting. The partnership created by the certified packaging process includes a quality assurance review by the intermediary (when present), thus helping to ensure what is received by the Agency is a quality product Tribal Housing Authorities and TDHE’s are eligible to be Certified Loan packagers. Attached is a map of Intermediary Territories. NM is covered by Tierra Del Sol and RCAC. Benefits over informal packaging process are Intermediary help and a larger fee. The packaging fee is $1500 to be shared with the Intermediary. Training opportunities through nonprofits – Non-Agency Points of Contact Housing Assistance Council (HAC) Primary: Jeff Mosley Secondary: Shonterria Charleston Primary: jeff@ruralhome.org Secondary: terria@ruralhome.org Prefers contact by email   NeighborWorks America Dale Prunoske Senior Manager, Curriculum and Training 999 N. Capitol St. NE, Suite 900 Washington, DC 20002 dprunoske@nw.org 202-760-4219 Rural Community Assistance Corporation (RCAC) Angela Sisco Rural Development Specialist – Housing (208) 846-5983 asisco@rcac.org

Section 504-Single Family Housing Home Improvement Loan & Grant Program Very low income homeowners may qualify for 20 year, 1% loans for repairs, improvements, modernization or accessibility modifications up to $20,000 Elderly (62 yrs and older) homeowners who cannot repay the entire loan amount may qualify for a $7,500 lifetime grant which can be used to address health or safety hazards, and accessibility modifications. FY 16 Funding $29.9 Million (grants) $26.2 Million (loans) Very low income homeowners may qualify for loans of up to $20,000, term up to 20 years, at 1% fixed interest rate If under $7,500 – note only feature. If 62 or older and VL income – and can’t repay a loan, up to $7,500 grant. Or grant and loan combo. $7,499 loan @1%=$34/month loan. $20,000 loan for $92/month. Many loans on trust land are $7,499. A grant/loan combination is made if the applicant can repay part of the cost Funds are available for repairs to improve or modernize a home and remove health & safety hazards. Can be used to make homes accessible for disabled. Water, waste systems are eligible uses. Must be the owner/occupant of a modest single family home. Leasehold interest of trust land is acceptable with certain terms including HUD mutual help housing on Indian lands. Homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, (below 50 percent of the area median income). Minimal paperwork Matches well with BIA HIP funds Work with State office and execute a packaging memorandum of understanding for 504 loans and grants, as well as 502 loans. www.rd.usda.gov/programs-services/single-family-housing-repair-loans-grants 8

Mutual Self-Help Housing Overview Technical assistance grants (not for construction), are available to Tribes, Non-Profits, and Public Agencies to supervise groups of 4 to 12 direct loan applicants build their own homes. Technical assistance grantees are active in 35 states, and Puerto Rico. 65% of the required labor is provided by the homebuyers, but remaining work is subcontracted to qualified contractors (typically excavation, foundations, HVAC, electrical, and plumbing). Once all homes in a build group are completed, the new homeowners can move-in. http://www.rd.usda.gov/programs-services/mutual-self-help-housing-technical-assistance-grants 9

Zuni Pueblo Self-Help Grant A technical assistance grant was provided to the Zuni Pueblo Housing Authority to work with Seven 502 loan borrowers to build their homes. The borrowers are responsible to provide 65 percent of the labor under the construction supervisor’s supervision but certain things are contracted out. For example – the pouring of the foundations, like you see here.

Here is a picture of the first borrowers on the day they received the keys to their new homes.

Section 523 and 524 Site Loans Section 523 loans are used to acquire and develop sites only for housing to be constructed by the Self-Help method. Section 524 Loans -The developed sites may be sold to low- or moderate-income families utilizing USDA’s Housing loan programs, or any other mortgage financing program which serves low- and moderate-income families. Eligible applicants include: Private or public non-profit organizations.  Federally-recognized Tribes Section 524 loans are made to acquire and develop sites for low- or moderate-income families, with no restriction as to the method of construction.  Low-income is defined as between 50-80% of the area median income (AMI); the upper limit for moderate income is $5,500 above the low-income limit Who may apply for this program? Section 523 loans: Private or public non-profit organizations that will provide sites solely for self-help housing Section 524 loans: Private or public non-profit organizations.  The building site may be sold to low- or moderate-income families utilizing USDA’s Housing and Community Facilities Program’s (HCFP) loan programs, or any other mortgage financing program which serves low- and moderate-income families Non-profits that have the legal authority to operate a revolving loan fund Non-profits that have the financial, technical and managerial capacity to comply with relevant federal and state laws and regulations Federally-recognized Tribes What is an eligible area? Check eligible addresses. How may funds be used? Site loans are made to provide financing for the purchase and development of housing sites for low- and moderate-income families. What are the terms of the loans? 2-year loans Section 523 loans: 3% interest rate Section 524 loans: market rate -- at the discretion of the customer, either at loan approval or closing How do we get started? Applications for this program are accepted year round. Please apply through your State USDA Rural Development office.. Who can answer questions? Contact your State USDA Rural Development office http://www.rd.usda.gov/programs-services/rural-housing-site-loans 12

Sec. 502-Single Family Housing Guaranteed Loans Lease & Ordinance Review Applications made with approved lenders Mortgages are 30 years fixed rate 100% Financing Available Interest rates are negotiated with the lender There is no maximum loan amount Closing costs and repairs can be financed with the home purchase FY 16 Funding ~ $24 Billion Upfront Fees: Purchase & Refinance: 2.75% Annual Fees: Purchase & Refinance:.40% Properties financed must be in rural areas Available on Tribal Trust lands with approved lease and foreclosure ordinances 90% Guarantee There is no required down payment. The lender must also determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt. Applicants for loans may have an income of up to 115% of the median income for the area. Fee are going down October 1st to 1 percent upfront and .35 annual. www.rd.usda.gov/programs-services/single-family-housing-guaranteed-loan-program 13

Section 502-Single Family Housing Guaranteed Loans Eligible lenders: Community Development Financial Institutions CDFI are eligible to participate in the Guaranteed Loan Program if they are supervised by a Federal regulatory agency Credit Unions Credit unions are able to participate if they are supervised by the National Credit Union Administration Community Banks Informal packaging opportunity. Work with NCDFI’s, If can’t qualify for guarantee – they may be eligible for a loan at 1 percent interest rate. Packaging fee of $350 or $500 for home repair. www.rd.usda.gov/programs-services/single-family-housing-guaranteed-loan-program 14

Multi-Family Housing Programs 533 Housing Preservation Grants 515 Direct Loans 538 Guaranteed Loans Housing can be on or off trust land Contact: State and/or Local Office 15

Section 533 Housing Preservation Grant Program Provides grants to sponsoring organizations for the repair or rehabilitation of housing occupied by low and very low income people. Eligible applicants include: Federally Recognized Tribes Most State and local governmental entities Nonprofit organizations Individual homeowners are not eligible http://www.rd.usda.gov/programs-services/housing-preservation-grants 16

Sec. 538 Guaranteed Rural Rental Housing Eligible lenders must be approved and active in one of the following programs: Fannie Mae, Freddie Mac, Ginnie Mae HUD Federal Home Loan Bank members State or local housing finance agencies Eligible borrowers include: Most state and local governmental entities Nonprofit organizations For-profit organizations, including LLC's Federally-recognized Tribes http://www.rd.usda.gov/programs-services/multi-family-housing-loan-guarantees

Community Facilities Programs Contact: State and/or Local Office Grants FY 16 ~ $25.7 Million Tribal College Initiative ~ $4 Million Economic Impact Grants ~ $6.6 Million Direct Loans Poverty, Intermediate and Market Rates FY 16 ~ $2.2 Billion Guaranteed Loans Negotiate interest rate FY 16 ~ $246 Million Rural Community Development Initiative (RCDI) FY 16 ~ $8.5 Million A Community Facility Project may complement housing development within a community. For example, an eligible Tribe or TDHE may use CF program funds to build community buildings such as day care centers or community centers. Grant funds may be used to assist in the development of essential community facilities. Grant funds can be used to construct, enlarge, or improve community facilities for health care, public safety, and community and public services. This can include the purchase of equipment required for a facility's operation. A grant may be made in combination with other CF financial assistance such as a direct or guaranteed loan, applicant contributions, or loans and grants from other sources. Types of Eligible Grant Projects Fire, rescue, and public-safety vehicles Equipment for: Community health facilities Educational and cultural facilities Community support facilities www.rd.usda.gov/programs-services/community-facilities-direct-loan-grant-program 18

Sisseton Wahpeton Oyate Tribal Headquarters located on the Lake Traverse Reservation in northeastern South Dakota and southeastern North Dakota. A $31,200,000 Direct CF loan to build a new Tribal Headquarters. The building consolidates 28 public service Tribal departments, programs and agencies; serving as a central hub and assisting tribal members with tier social, educational and housing needs. Sisseton Wahpeton Housing Authority Agency Village, South Dakota Administrative Building Project Cost $ 1,323,250 RD CF loan $ 743,250 NAHASDA  $ 580,00   Oglala Sioux Lakota Housing Authority Pine Ridge, South Dakota Project Cost $ 3,625,000 RD CF loan    $ 3,625,000

In New Mexico, the Northern Pueblos Housing Authority a CF $100,000 loan/$50,000 grant for the design and installation of solar panels on the Picuris Pueblo fire station. The NetZero fire station was built leveraging USDA CF program funds with a HUD Indian Community Block Grant. The investment provides the Pueblo and surrounding rural communities with full service fire protection year round.

Water & Environmental Programs Water & Waste Disposal Loans & Grants FY 16 Direct Loans ~ $1.4 Billion FY 16 Grants ~ $361.1 Million Another $ 25 million for federally recognized Tribes Another $39.6 million for Rural Alaska Village Grants Technical Assistance & Training Grants FY16 ~ $20 million Solid Waste Management Grants FY16 ~ $4.2 million Contact: State and/or Local Offices Water and Environment Programs or WEP loans may be used to install new or improve existing water and wastewater systems. These systems may benefit Tribal housing development and may reduce the cost of housing for prospective homeowners and renters. Chehalis Tribe Water Towers www.rd.usda.gov/programs-services/water-waste-disposal-loan-grant-program 21

In New Mexico, the Pueblo of Jemez was awarded a $1,000,000 WEP grant to upgrade an existing water line and tank at the Pueblo, as well as extend new wastewater infrastructure to the Pueblo Place Housing Project. The multi-phase project will serve both existing and proposed housing on the Pueblo.

Rural Business & Cooperative Programs FY16 ~$4.3 million FY16 ~$1.9 million Set Asides for Federally Recognized Tribes Rural Business Development Grants (RBDG) = RBOG + RBEG FY16 ~ $22.8 million Intermediary Relending Program (IRP) FY16 $13.2 million Business and Industry (B&I) Guaranteed Loans FY16 ~ $1.5 billion Rural Energy for America Program (REAP) Renewable Energy Systems and Energy Efficiency Improvements Grants and Loan Guarantees Value Added Producer Grant FY 16 ~ $44 million Contact: State and/or Local Office Rural Business Development Grants – This program provides grants for rural projects that finance and facilitate development of small and emerging rural businesses help fund distance learning networks, and help fund employment related adult education programs. To assist with business development, RBDGs may fund a broad array of activities. It is well worth a visit to the link at the bottom of the slide. Intermediary Relending Program or IRP - What does this program do? Provides 1% low-interest loans to local intermediaries (such as non-profits, public agencies and Federally-recognized Tribes to re-lend to businesses and for community development projects in rural communities. How may funds be used? The acquisition, construction, conversion, enlargement, or repair of a business or business facility, particularly when jobs will be created or retained The purchase or development of land (easements, rights of way, buildings, facilities, leases, materials) The purchase of equipment, leasehold improvements, machinery, or supplies Start-up costs and working capital Pollution control and abatement Transportation services Feasibility studies and some fees Hotels, motels, convention centers Education institutions Aquaculture based rural small business Revolving lines of credit as described in 7 CFR Part 4274.314 Rural = 50,000 or less for B&I and RBDG Rural = 25,000 or less for IRP www.rd.usda.gov/programs-services/programs-services-businesses 23

National American Indian Housing Council June 2014 Website screen shot National American Indian Housing Council June 2014