number of these loans made annually edged upward from 427 in fiscal year 1975 to 544 in 1979. While this number is small, the increase is a hopeful sign. And recognizing the need for working more closely with Indian tribal organizations, the Agency has developed concentrated efforts toward achieving such working relationships. Examples of these efforts include approval of rural development planning grants of $247,000 to eight Indian tribes in eight States. Grants have been made to Indian housing research groups to stimulate Indian initiatives in solving housing and other problems. A supervisory housing assistance grant of $50,000 to the Chippewa Tribe in Minnesota. In cooperation with the Administration on Aging, Farmers Home has embarked upon a pilot program of financing congregate housing with central dining and other facilities for the elderly. Initially, we started with 10 projects, but expanded the number to 12 to provide for at least 2 projects to be constructed on Indian reservations. Mr. Chairman, as you know, assistance to American Indians to improve their desperately inadequate housing conditions is complicated by such factors as very low Indian family participation in Farmers Home 502 and 504 programs, and we believe it is limited because an interpretation of legal ownership of tribal land and threat of alienation of trust land, the increasing cost of housing, escalating interest rates, and inflation make it increasingly difficult for low-income Indians and other families to afford adequate housing. These costs are currently so burdensome, in fact, that Farmers Home's interest credit program does not bring the monthly payments down low enough to make ownership available to low-income Indians. Private lenders, such as savings and loan institutions, often avoid home loans on Indian reservations. The cost of operating a home, including insurance, taxes, and upkeep, have escalated far faster than the income of Indian families, and the era of cheap energy is over; therefore, the cost of heating, cooling, and lighting homes has skyrocketed and will remain high. Technical and legal obstacles in housing laws still exist. In addition, other changes in Farmers Home's basic authorities are needed. The Agency is currently considering several important administrative and regulatory changes to improve its housing assistance programs and services to Indian people. There is one change which we were considering submitting to Congress. Presently, only State-chartered corporations and certain public agencies are eligible to participate in certain title V housing programs. We need to be able to recognize tribal bodies as being eligible borrowers for such programs as section 515 rural rental housing. Farmers Home is also especially anxious to implement the fiscal year 1981 provisions of the homeownership assistance program. This program enables very low income homeowners to purchase a home with Farmers Home assistance. We are asking the Congress to fund this program, and many low-income Indians who live in more remote areas on reservations would be eligible for HOAP. We are also asking Congress to increase the funding to $50 million for the section 504 of rural housing loan program, which, together with the $25 million in 504 grants, will help older and low-income people to improve their homes when they are unsafe or a threat to health. The 504 program, like HOAP, is well suited for use on Indian reservations. I have mentioned several administrative changes Farmers Home has under consideration, changes that we feel would help the Agency better serve the needs of Indians and others. Thank you very much for the time, Mr. Chairman. [Mr. Latcholia's prepared statement on behalf of the Farmers Home Administration follows:] STATEMENT OF KENNETH LATCHOLIA DEPUTY ADMINISTRATOR FOR RURAL DEVELOPMENT SUBCOMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT HOUSE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS MR. CHAIRMAN, THANK YOU FOR THE OPPORTUNITY TO APPEAR BEFORE YOU TO I WILL DISCUSS THE PROGRESS FARMERS HOME ADMINISTRATION (FMHA) HAS MADE IN HELPING RURAL AND SMALL TOWN PEOPLE, ESPECIALLY AMERICAN INDIANS, SOLVE THEIR HOUSING PROBLEMS. IN ADDITION, WE SEEK YOUR COUNSEL IN HELPING FMHA DEVELOP WAYS TO SPEED PROGRESS IN PROVIDING TOOLS TO INDIANS TO ALLEVIATE AND ELIMINATE SEVERE INADEQUACIES THAT EXIST IN THEIR HOUSING CONDITIONS. AS YOU KNOW, FMHA IS VERY CONCERNED ABOUT THE HOUSING PROBLEMS FACED BY THE AMERICAN INDIAN. THE AGENCY IS COMMITTED TO WORKING ON ALL LEVELS TOWARD ALLEVIATING HOUSING PROBLEMS BOTH ON AND OFF THE RESERVATION. THE RECORD SHOWS THAT FARMERS HOME ADMINISTRATION HAS PLAYED AN IMPORTANT ONLY MEAGERLY IN THIS PROGRESS. AT THIS POINT, I WOULD LIKE TO PROVIDE THE COMMITTEE WITH STATISTICAL INFORMATION ON THE CONDITION OF INDIAN HOUSING. ACCORDING TO THE 1970 CENSUS: 62.4 PERCENT OF INDIAN HOMES ON RESERVATIONS ARE SUB-STANDARD, COMPARED TO A NATIONAL AVERAGE OF SUBSTANDARD HOUSING SLIGHTLY 1/ 1970 CENSUS OVER 32,000 OF THESE HOMES ARE SO RUNDOWN THAT RENOVATION IS OUT OF THE QUESTION. REPLACED. 2/ ALMOST 50 PERCENT OF THE HOMES ON INDIAN RESERVATIONS HAVE NO AS YOU KNOW FMHA FINANCES SINGLE FAMILY RURAL DWELLINGS, BOTH NEW AND USED, AS WELL AS RURAL RENTAL APARTMENT DWELLINGS. SINCE FMHA IS THE LENDER OF LAST RESORT, IF A FAMILY IS ABLE TO SECURE HOUSING CREDIT ELSEWHERE, UNDER ACCEPTABLE RATES AND CONDITIONS, IT IS INELIGIBLE FOR FMHA FINANCIAL ASSISTANCE. FOR LOW INCOME FAMILIES, THE AGENCY SUBSIDIZES LOANS SO THAT PAYMENTS ARE MADE AT INTEREST RATES RANGING DOWN TO AS LOW AS ONE PERCENT PER ANNUM. 2/ CONCLUSIONS REACHED IN TWO RECENT SURVEYS: BUREAU OF INDIAN AFFAIRS 1977 AND QUANDEL CORPORATION 1978. |