GAO-10-326, Native American Housing: Tribes Generally View Block Grant Program as Effective, but Tracking of Infrastructure Plans and Investments Needs Improvement


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Program as Effective, but Tracking of Infrastructure Plans and 
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Report to Congressional Committees: 

United States Government Accountability Office: 
GAO: 

February 2010: 

Native American Housing: 

Tribes Generally View Block Grant Program as Effective, but Tracking 
of Infrastructure Plans and Investments Needs Improvement: 

GAO-10-326: 

GAO Highlights: 

Highlights of GAO-10-326, a report to congressional committees. 

Why GAO Did This Study: 

The Native American Housing Assistance and Self-Determination Act of 
1996 (NAHASDA) changed how the Department of Housing and Urban 
Development (HUD) provides housing assistance to Native Americans. 
Congress created NAHASDA to recognize self-determination for tribes in 
addressing their low-income housing needs. In NAHASDA’s 2008 
reauthorization, Congress asked GAO to assess the program’s 
effectiveness. This report discusses (1) how tribes have used NAHASDA 
funds, (2) how NAHASDA has improved the process of providing tribes 
with funds for housing, and (3) the extent to which NAHASDA has 
contributed to infrastructure improvements in tribal communities. GAO 
analyzed agency documentation, surveyed all tribes receiving grants in 
fiscal year 2008, conducted site visits with select tribes, and 
interviewed officials at HUD and other agencies. 

What GAO Found: 

Native American tribes have used NAHASDA block grant funds to develop 
new housing and to provide other types of housing assistance to 
eligible members (see figure below), but fewer small grantees have 
developed new housing. Out of 359 grantees in fiscal year 2008, 102 
received less than $250,000, with 22 of those reporting that they had 
developed new housing over the life of their participation in the 
program. Smaller grantees often provide tenant-based rental assistance 
and other such services to members, but HUD neither tracks activities 
that are not unit-based (units built, acquired, or rehabilitated) nor 
reports those activities to Congress. However, HUD is revising its 
reporting to track more activities, which should help efforts to 
assess the impact of NAHASDA. 

Figure: NAHASDA Grantee Replacing a Log Cabin Using Block Grant Funds: 

[Refer to PDF for image: photograph] 

Source: GAO. 

[End of figure] 

Most grantees that we surveyed and interviewed view NAHASDA as 
effective, largely because it emphasizes tribal self-determination. 
Grantees feel the program has helped to improve housing conditions and 
increase access to affordable housing, but they reported that 
developing housing finance mechanisms and increasing economic 
development remain as challenges. 

Housing-related infrastructure development is an affordable housing 
activity under NAHASDA, but HUD does not collect grantees’ 
infrastructure plans or measure their infrastructure investments. 
Indian Health Service (IHS) data show an acute need for sanitation-
related infrastructure in Indian housing, and 85 percent of grantees 
responding to our survey reported that developing infrastructure, such 
as providing homes with access to drinking water, was a continuing 
need. According to IHS officials, HUD can access IHS data on 
sanitation deficiencies under a 2007 memorandum of understanding 
between the agencies. HUD could use this data to track grantees’ 
efforts to address a key need in their communities and broaden the 
scope of accomplishment data it reports to Congress. This data could 
also help grantees identify any unmet sanitation needs they might 
address with their NAHASDA grants. 

What GAO Recommends: 

To better assess program impact and help grantees identify their 
infrastructure needs, GAO recommends that HUD (1) incorporate 
reporting on infrastructure in its planned revisions for grantee 
reporting on uses of block grant funds and (2) obtain IHS data on 
housing-related infrastructure deficiencies on Indian lands. HUD 
agreed with the report’s conclusions and recommendations. 

View GAO-10-326 or key components. For more information, contact 
William B. Shear at (202) 512-8678 or shearw@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

The IHBG Program Has Helped Tribes Address Some of Their Affordable 
Housing Needs, but HUD and Tribes Reported That Small Grantees Face 
Unique Challenges: 

Survey Respondents and Tribes We Interviewed Generally Viewed NAHASDA 
as Effective in Meeting Their Low-Income Housing Needs, but Some 
Reported Challenges, Including Concerns with the Allocation Formula: 

Almost Half of the Grantees We Surveyed Use IHBG Funds for 
Infrastructure Development, but HUD Does Not Collect Grantees' Plans 
or Monitor Their Investments in Housing-Related Infrastructure: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Survey Respondents' Suggestions for Smaller Tribes 
Participating in NAHASDA: 

Appendix III: Cherokee Freedmen: 

Appendix IV: Comments from the Department of Housing and Urban 
Development: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Survey Respondents Reporting That They Provided Specific 
Types of Housing Assistance Using IHBG Funds in Fiscal Years 2008 and 
2009: 

Table 2: Survey Respondents Reporting That They Used IHBG Funds to 
Build New Units, by Fiscal Year 2008 Grant Size: 

Table 3: NAHASDA Grantees' Use of Specific Funding Programs in 
Combination with the IHBG Program Based on Survey Responses: 

Table 4: Survey Respondents' Views on the Overall Effectiveness of 
NAHASDA: 

Table 5: Survey Respondents' Views on the Overall Effectiveness of 
NAHASDA, by Fiscal Year 2008 Grant Size: 

Table 6: Survey Respondents' Views on NAHASDA Compared with 1937 Act 
Housing Programs: 

Table 7: Most Frequent Suggestions on How NAHASDA Could be Improved: 

Table 8: Survey Respondents' Suggestions on How the IHBG Allocation 
Formula Could Be Improved: 

Table 9: Survey Respondents' Use of Various Programs to Develop 
Housing-Related Infrastructure: 

Table 10: Location and Other Characteristics of NAHASDA Grantees 
Selected for Site Visits and Telephone Interviews: 

Table 11: Advice for Grantees Receiving Grants of Less Than $250,000 
per Year: 

Figures: 

Figure 1: Funding for Indian Housing from Fiscal Year 1993 to 2009, 
and NAHASDA's Legislative and Regulatory Changes: 

Figure 2: Weighted Share of Seven Need Factors in the IHBG Formula: 

Figure 3: Number of Homeownership and Rental Units Developed with IHBG 
Funds, Fiscal Years 2003 through 2008: 

Figure 4: $1 Million Senior Apartment Community Built with $400,000 in 
IHBG Funds (ONAP Alaska Region): 

Figure 5: Fiscal Year 2008 IHBG Adjusted Grant Amounts: 

Figure 6: Small Grantee Replacing a Log Cabin with a 400 to 500 Square 
Foot Home Using $30,000 in IHBG Funds (ONAP Alaska Region): 

Figure 7: Tribal Temporary Foster Care Facility and Public Safety 
Building Funded through the ICDBG Program (ONAP Northwest Region): 

Figure 8: Tribal Community Center Funded through Low-Income Housing 
Tax Credit Programs (ONAP Northern Plains Region): 

Figure 9: Example of Large Grantee Housing Project (ONAP Alaska 
Region): 

Figure 10: Percentage of Survey Respondents Reporting Specific 
Challenges to Leveraging as Moderate to Very Great: 

Figure 11: Grantees View NAHASDA as Most Effective at Improving 
Housing Conditions for Low-Income Native Americans: 

Figure 12: Housing-Related Infrastructure: 

Figure 13: Survey Respondents' Rankings of Their Greatest Continuing 
Housing Needs, by Percentage: 

Figure 14: Survey Respondents' Use of the IHBG Program for 
Infrastructure Development, by Fiscal Year 2008 Grant Size: 

Figure 15: Survey Respondents' Views on Problems with NAHASDA Ranked 
by Number of Responses: 

Figure 16: Types of Infrastructure for Which Survey Respondents 
Reported Using IHBG Funds: 

Figure 17: Cherokee Freedmen History: 

Abbreviations: 

1937 Act: U.S. Housing Act of 1937: 

AI/AN: American Indian and Alaska Native: 

APR: Annual Performance Report: 

BIA: Bureau of Indian Affairs: 

HUD: Department of Housing and Urban Development: 

ICDBG: Indian Community Development Block Grant: 

IHBG: Indian Housing Block Grant: 

IHP: Indian Housing Plan: 

IHS: Indian Health Service: 

LIHTC: Low-Income Housing Tax Credit: 

NAHASDA: Native American Housing Assistance and Self-Determination Act 
of 1996: 

NAIHC: National American Indian Housing Council: 

ONAP: Office of Native American Programs: 

TDHE: tribally designated housing entity: 

Title VI: Title VI Loan Guarantee Program: 

USDA: U.S. Department of Agriculture: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

February 25, 2010: 

The Honorable Christopher J. Dodd: 
Chairman: 
The Honorable Richard C. Shelby: 
Ranking Member: 
Committee on Banking, Housing, and Urban Affairs: 
United States Senate: 

The Honorable Barney Frank: 
Chairman: 
The Honorable Spencer Bachus: 
Ranking Member: 
Committee on Financial Services: 
House of Representatives: 

In the United States, Native Americans disproportionately experience 
socioeconomic challenges, including high unemployment and extreme 
poverty, which impact housing conditions on Indian reservations and in 
other Indian areas. The U.S. Census Bureau reported in 2008 that 
Native Americans were almost twice as likely to live in poverty as the 
rest of the population--27 percent compared with 15 percent. As a 
result, overcrowding, substandard housing, and homelessness are far 
more common in Native American communities; nearly 46 percent of 
Native American households were overcrowded in 2008, a rate that was 
almost three times as high as the rest of the country. The U.S. 
government's relationship with Native American tribes has historically 
been troubled, making it difficult to address the needs of low-income 
Native Americans. Since 1961, the government has sought to address 
Native Americans' need for more housing that is safe, decent, and 
affordable by allowing them access to several housing programs 
beginning with the U.S. Housing Act of 1937 (1937 Act) and 
administered by the Department of Housing and Urban Development (HUD). 
[Footnote 1] In October 1996, Congress went a step further in creating 
a housing program for Native Americans that recognized the tribes' 
right to self-determination and self-governance. The Native American 
Housing Assistance and Self-Determination Act of 1996 (NAHASDA) 
reorganized the system of housing assistance that HUD provided to 
Native Americans by eliminating or incorporating several separate 
programs Native Americans utilized into a single block grant program--
known as the Indian Housing Block Grant (IHBG) program--along with the 
Title VI Loan Guarantee (Title VI) program to assist grantees with 
private market financing.[Footnote 2] NAHASDA was first funded in 
fiscal year 1998, and in November 1998 we reported on its 
implementation.[Footnote 3] Today, more than 360 grantees servicing 
approximately 555 tribes participate in NAHASDA's block grant program--
most grantees have participated since its inception--with the goal of 
providing their members with adequate and affordable housing. 

In the 2008 reauthorization of NAHASDA, you asked us to assess the 
effectiveness of NAHASDA in achieving its purposes of meeting the 
affordable housing needs of low-income Native American families. You 
asked that we look at the program's effectiveness in meeting the needs 
of tribes of various sizes, specifically with respect to smaller 
tribes or those receiving lesser or minimum grant amounts. In this 
report, we evaluate (1) how NAHASDA program funds have allowed Native 
American tribes to address their affordable housing needs; (2) how, if 
at all, NAHASDA has improved the process of providing Native American 
tribes with access to federal funds to meet their affordable housing 
needs; and (3) the extent to which NAHASDA funding has contributed to 
infrastructure improvements in Native American communities. 

In conducting this work, we reviewed NAHASDA's legislative history and 
HUD's policies and procedures for administering the program. We also 
reviewed previous congressional reports and testimonies, an Office of 
Management and Budget report, our previous reports, and an independent 
study of the program contracted by HUD. We obtained documents from HUD 
related to NAHASDA grantee population and enrollment, grant amounts 
awarded, and grantees' use of funds to pursue eligible affordable 
housing activities. We determined that the data HUD provided to us 
were sufficiently reliable for our purposes. To obtain the 
perspectives of Native American tribes and tribally designated housing 
entities participating in NAHASDA, we conducted site visits with 
grantees in four of HUD's six Office of Native American Programs 
(ONAP) regions and conducted telephone interviews with grantees in the 
two remaining regions, and we surveyed all tribes and tribally 
designated housing entities that received a grant in fiscal year 2008, 
obtaining a 66 percent response rate.[Footnote 4] For site visits and 
telephone interviews, we selected 12 grantees (2 in each region) based 
on such factors as 2008 population, enrollment, and grant size 
relative to other regional grantees; housing activities reported to 
HUD; and geographic location. We also met with officials from the 
National American Indian Housing Council, a nonprofit housing advocacy 
organization that represents American Indians, Alaska Natives, and 
Native Hawaiians; and Cherokee Freedmen representatives who advocate 
for housing and other benefits for the Cherokee Freedmen. We 
interviewed officials in ONAP headquarters and in each regional ONAP 
office. Finally, we interviewed officials at the Indian Health 
Service, Bureau of Indian Affairs, and U.S. Department of Agriculture 
Rural Development because those agencies also provide assistance to 
Native American communities. Appendix I contains a more detailed 
description of our scope and methodology. Appendix III contains a 
brief history of the Cherokee Freedmen and information pertaining to 
the Cherokee Nation's provision of housing assistance to Cherokee 
Freedmen members. 

We conducted this performance audit in Alaska; Arizona; California; 
Colorado; Illinois; Michigan; Montana; Oklahoma; Utah; Washington; 
Washington, D.C.; and Wisconsin from January 2009 to February 2010 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

NAHASDA authorized two HUD-administered programs--IHBG and Title VI--
that aim to provide affordable housing assistance to Native Americans 
living on or near Indian tribal lands or areas, including assistance 
for housing-related infrastructure.[Footnote 5] NAHASDA was first 
funded in fiscal year 1998 and was most recently reauthorized in 2008. 

[Side bar: Types of Indian Lands: 

Federal Indian reservation: An area of land reserved for a tribe or 
tribes under treaty or other agreement with the United States, 
executive order, or federal statute or administrative action as 
permanent tribal homelands, and where the federal government holds 
title to the land in trust on behalf of the tribe. 

Allotted lands: Remnants of reservations broken up during the federal 
allotment period of the late 19th and early 20th centuries. Starting 
with the General Allotment Act in 1887 (also known as the Dawes Act) 
until the Indian Reorganization Act of 1934, allotments were conveyed 
to members of affected tribes and held in trust by the federal 
government. As allotments were taken out of trust, they became subject 
to state and local taxation, which resulted in thousands of acres 
passing out of Indian hands. 

Restricted status or restricted fee land: Land title is held by an 
individual Indian person or a tribe and can only be alienated or 
encumbered by the owner with the approval of the Secretary of the 
Interior because of limitations contained in the conveyance instrument 
pursuant to federal law. 

State Indian reservations: Lands held in trust by a state for an 
Indian tribe. These lands are not subject to state property tax, 
though they are subject to state law. End of side bar] 

Prior to NAHASDA, Native Americans received assistance for affordable 
housing under various programs aimed at providing housing assistance 
to low-income families. For example, several of the programs were 
authorized by the 1937 Act, including housing development and 
modernization grants, operating subsidies, and Section 8 rental 
assistance. Prior to NAHASDA, there were no specific provisions 
relating to the unique circumstances of Native Americans living on or 
near tribal lands, such as the federal government's obligations to 
Native Americans through treaties and legislation, the relationships 
between sovereign governments (federal and tribal) with different 
laws, and the challenges with development on trust lands. When NAHASDA 
was enacted in 1996, it incorporated the major programs that served 
Native Americans into a single block grant program (the IHBG program). 
[Footnote 6] NAHASDA also created the Title VI program. 

The IHBG program is a formula grant program that provides funding for 
affordable housing activities to Native American tribes or tribally 
designated housing entities (TDHE).[Footnote 7] The purpose of the 
Title VI program is to assist IHBG recipients that are unable to 
obtain financing for eligible affordable housing activities without a 
federal guarantee. Through the IHBG and Title VI programs, NAHASDA 
aims to accomplish the following statutory objectives: 

* assist and promote affordable housing activities to develop, 
maintain, and operate affordable housing in safe and healthy 
environments on Indian reservations and in other Indian areas for 
occupancy by low-income Indian families; 

* ensure better access to private mortgage markets for Indian tribes 
and their members and promote self-sufficiency of Indian tribes and 
their members; 

* coordinate activities to provide housing for Indian tribes and their 
members with federal, state, and local activities to further economic 
and community development for Indian tribes and their members; 

* plan for and integrate infrastructure resources with housing 
development for Indian tribes; and: 

* promote the development of private capital markets in Indian country 
for the benefit of Indian communities.[Footnote 8] 

NAHASDA, as described in the statute, is "[t]o provide federal 
assistance for Indian tribes in a manner that recognizes the right of 
tribal self-governance, and for other purposes." Under NAHASDA, tribes 
practice self-governance or self-determination through (1) negotiated 
rulemaking, (2) receiving funding directly rather than through Indian 
Housing Authorities, and (3) determining the details of their housing 
programs.[Footnote 9] 

Negotiated rulemaking is the process whereby an agency considering 
drafting a rule brings together representatives of that agency and 
affected parties for negotiations, consistent with the Negotiated 
Rulemaking Act of 1990. ONAP consults with tribes on various matters. 
One important element of these discussions is negotiated rulemaking, 
which allows Native Americans to participate in developing 
regulations, including those pertaining to the IHBG allocation 
formula. Before NAHASDA, HUD provided most of its assistance to Native 
Americans through Indian Housing Authorities in the same manner as 
public housing. With the enactment of NAHASDA, tribes may choose to 
receive housing funds directly or they may designate a TDHE to 
administer the housing program on their behalf. Tribes and TDHEs can 
use IHBG funds for any eligible NAHASDA activity. Finally, under 
NAHASDA, tribes are able to determine (1) whom they serve (for 
example, giving preference to members of the participating tribe); (2) 
what types of eligible activities they offer; and (3) how they deliver 
their programs and projects. 

[Side bar: Federally Recognized Tribes and Participation in NAHASDA: 

According to the Bureau of Indian Affairs (BIA), a federally 
recognized tribe is an American Indian or Alaska Native tribal entity 
that has a government-to-government relationship with the United 
States and is eligible for BIA funding and services. Tribes may 
receive federal recognition by an Act of Congress; by the 
administrative procedures under 25 CFR, Part 83; or by the decisions 
of a United States court. As of August 2009, there were 564 federally 
recognized tribes. According to Department of Housing and Urban 
Development officials, all tribes had to obtain federal recognition to 
participate in the Native American Housing Assistance and Self-
Determination Act of 1996 (NAHASDA) program, with the exception of 
five state recognized tribes that participated in federal housing 
programs under the U.S. Housing Act of 1937. When NAHASDA was 
implemented, those five tribes were grandfathered into the program. 
End of side bar] 

Entities eligible for NAHASDA programs are federally recognized Indian 
tribes or their TDHEs and a limited number of state recognized tribes 
that were funded under the 1937 Act. Families that are eligible for 
NAHASDA-funded assistance are low-income Indian families--defined as 
Indian families whose income does not exceed 80 percent of the area 
median income--residing on a reservation or in an Indian 
area.[Footnote 10] Further, NAHASDA requires that dwelling units be 
occupied, owned, leased, purchased, or constructed by low-income 
families and that the dwelling units remain affordable for the 
remaining useful life of the property.[Footnote 11] According to HUD's 
2009 IHBG formula allocation data, 282,111 American Indian and Alaska 
Native (AI/AN) households residing in NAHASDA formula areas were low-
income. 

Under NAHASDA, there are seven eligible activities: 

1. Indian housing assistance, i.e. modernization or operating 
assistance for 1937 Act units; 

2. housing development, including the acquisition, new construction, 
and reconstruction or rehabilitation of affordable housing; 

3. housing services, including housing counseling and assistance to 
owners, tenants, and contractors involved in eligible housing 
activities; 

4. housing management services for affordable housing, including loan 
processing, inspections, and tenant selection; 

5. crime prevention and safety; 

6. model activities that provide creative approaches to solving 
affordable housing problems; and: 

7. reserve accounts for administrative and planning activities related 
to affordable housing. 

Under NAHASDA, grantees can use a range of approaches to provide 
homeownership and rental assistance. These include providing: 

* homeownership units for purchase or lease-purchase through new 
construction, acquisition (for example, purchase of existing units), 
rehabilitation, or acquisition and rehabilitation; 

* rental units through new construction, acquisition (for example, 
purchase of existing units), rehabilitation, or acquisition and 
rehabilitation; 

* rental units through conversion of existing structures or demolition 
and replacement of existing structures; 

* homeownership assistance through acquisition (for example, 
downpayment or closing cost assistance to the homebuyer) or 
acquisition and rehabilitation; and: 

* tenant-based rental assistance (residents pay up to 30 percent of 
their adjusted income). 

Grantees also can leverage NAHASDA funds by combining them with funds 
from other federal, state, local, and private sources to support 
eligible program activities. According to HUD, leveraging was not 
common under the 1937 Act. 

Since the enactment of NAHASDA, several legislative and regulatory 
changes have occurred (see figure 1). Those changes include the 
creation of the Native Hawaiian Housing Block Grant program in 2000 
and the use of grant funds for housing-related community development 
activities.[Footnote 12] Funding for the IHBG program has remained 
steady. NAHASDA's first appropriation in fiscal year 1998 was $592 
million, and average funding was approximately $633 million between 
1998 and 2009. The highest level of funding was $691 million in 2002, 
and the lowest was $577 million in 1999. For fiscal year 2009, the 
program's appropriation was $621 million. However, when accounting for 
inflation, constant dollars have generally decreased since the 
enactment of NAHASDA. The highest level of funding in constant dollars 
was $779 million in 1998, and the lowest was $621 million in 2009. 
Amounts cited above and in figure 1 are for the IHBG program and 
exclude NAHASDA set-asides such as technical assistance and Title VI 
funding. 

Figure 1: Funding for Indian Housing from Fiscal Year 1993 to 2009, 
and NAHASDA's Legislative and Regulatory Changes: 

[Refer to PDF for image: vertical bar and line graph] 

Fiscal year: 1993; 
1973 Act Programs; 
Actual Dollars: $537; 
Constant 2009 dollars: $800. 

Fiscal year: 1994; 
1973 Act Programs; 
Actual Dollars: $585; 
Constant 2009 dollars: $849. 

Fiscal year: 1995; 
1973 Act Programs; 
Actual Dollars: $593; 
Constant 2009 dollars: $837. 

Fiscal year: 1996; 
1973 Act Programs; 
Actual Dollars: $491; 
Constant 2009 dollars: $675. 

Fiscal year: 1997; 
1973 Act Programs; 
Actual Dollars: $562; 
Constant 2009 dollars: $752. 

Fiscal year: 1998; 
NAHASDA regulations established: Regulations implementing NAHASDA were 
written pursuant to the first negotiated rulemaking committee; 
Actual Dollars: $592; 
Constant 2009 dollars: $779. 

Fiscal year: 1999; 
Actual Dollars: $577; 
Constant 2009 dollars: $745. 

Fiscal year: 2000; 
NAHASDA amendment passed: Public Law (P.L.) 106-568 made changes, such 
as creating a parallel program to cover Native Hawaiians and allowing 
for waivers of environmental reviews; 
Actual Dollars: $617; 
Constant 2009 dollars: $773. 

Fiscal year: 2001; 
Actual Dollars: $634; 
Constant 2009 dollars: $769. 

Fiscal year: 2002; 
NAHASDA amendment passed: P.L. 107-292 made changes, such as allowing 
for the usage of grants for housing-related community development; 
Actual Dollars: $691; 
Constant 2009 dollars: $826. 

Fiscal year: 2003; 
Actual Dollars: $659; 
Constant 2009 dollars: $769. 

Fiscal year: 2004; 
NAHASDA amendment passed: P.L. 108-393 established a limited guarantee 
level of 95% for the Title VI loan program; 
Actual Dollars: $652; 
Constant 2009 dollars: $744. 

Fiscal year: 2005; 
NAHASDA amendment passed: P.L. 109-58 made minor changes, such as the 
addition of energy efficiency as part of a development activity; 
Actual Dollars: $642; 
Constant 2009 dollars: $709. 

Fiscal year: 2006; 
Actual Dollars: $606; 
Constant 2009 dollars: $646. 

Fiscal year: 2007; 
Final rule published from formula negotiated rulemaking committee: The 
rule made changes to the IHBG formula, such as addressing certain 
definitions of formula areas and establishing a new minimum allocation 
formula; 
Actual Dollars: $641; 
Constant 2009 dollars: $667. 

Fiscal year: 2008; 
NAHASDA reauthorization and amendments passed: P.L. 110-411 made 
changes, such as establishing a demonstration loan guarantee program 
for community development; 
Actual Dollars: $667; 
Constant 2009 dollars: $665. 

Fiscal year: 2009; 
Actual Dollars: $621; 
Constant 2009 dollars: $621. 

Source: GAO analysis of NAHASDA statute and regulations. 

[End of figure] 

ONAP, which administers NAHASDA, is part of HUD's Office of Public and 
Indian Housing and administers the Indian Community Development Block 
Grant and the Section 184 Indian Home Loan Guarantee programs. ONAP's 
headquarters in Washington, D.C. and its Denver office direct the 
administration of the IHBG program on the national level, while six 
regional offices administer grants on the local level.[Footnote 13] 
Each regional office contains two divisions: Grants Management, which 
provides funding, technical assistance, and project support to 
grantees; and Grants Evaluation, which reviews grantees' performance 
and initiates enforcement procedures when necessary. 

NAHASDA changed HUD's role and involvement in Native American housing. 
Prior to NAHASDA, HUD had greater involvement in the development of 
housing projects while also managing multiple programs that served 
Native Americans. Several of the programs were competitive, and HUD 
reviewed and scored project proposals for those programs and awarded 
grants to the highest-ranked projects, in addition to distributing 
funds through the other noncompetitive (formula-based) programs. Under 
the competitive programs, HUD had greater influence over how funds 
were spent. Under NAHASDA, HUD plays a more administrative role in 
delivering housing benefits to Native Americans, providing funding 
through a single, tribally negotiated grant allocation formula. HUD's 
role is (1) to provide grants, loan guarantees, and technical 
assistance to Indian tribes and Alaska Native villages for the 
development and operation of low-income housing in Indian areas; (2) 
to conduct oversight by ensuring that reporting requirements are met 
and by monitoring grant recipients onsite; and (3) to enforce remedies 
for noncompliant grant recipients. 

Prior to NAHASDA, HUD distributed grants from multiple programs to 217 
Indian Housing Authorities. Under NAHASDA, in fiscal year 2008, 535 
tribes benefited from more than 350 IHBG grants. The amount of funding 
is based on an allocation formula that has two components: (1) the 
costs of operating and modernizing pre-NAHASDA HUD-funded units and 
(2) the need for providing affordable housing activities. Need is 
calculated based on seven different factors that include the grantee's 
AI/AN population and the number of households within that population 
that fall in certain low-income categories (see figure 2). Allocation 
amounts are adjusted by local area costs for construction and rents. 
Because population impacts all need factors in the grant allocation, 
larger grantees (larger tribes operating their own housing programs or 
the TDHEs representing those tribes) receive larger grants. 
Additionally, grantees that own and operate pre-NAHASDA units receive 
both portions of the grant while those without the pre-NAHASDA units 
receive only the need portion. Since their inception, NAHASDA's 
regulations have included a provision for minimum funding. Tribes 
whose annual need allocation was less than $50,000 in their first year 
of participation or less than $25,000 in subsequent years have 
received minimum funding in those amounts (the allocation is to the 
tribe, although the grantee might be a separate entity operating the 
housing program). The minimum funding allocation was revised for 
fiscal year 2008.[Footnote 14] In fiscal year 2008, individual grants 
ranged from the minimum to more than $70 million. 

[Side bar: HUD’s Use of AI/AN Data in Allocating NAHASDA Grants: 

The American Indian and Alaska Native (AI/AN) population data that the 
Department of Housing and Urban Development (HUD) currently uses to 
determine annual Indian Housing Block Grant (IHBG) allocations is 
based on 2000 U.S. Census data as adjusted by Indian Health Service 
data on AI/AN births and deaths. The Census data used are for all 
AI/AN households within a tribe’s formula (geographic) area, and the 
Census attempts to count all housing units and all persons residing in 
those units. HUD has procedures for a tribe’s formula area to be 
corrected and for a tribe to challenge its population or household 
data. If tribes meet specific conditions, HUD also will use tribal 
enrollment data in lieu of population data to determine IHBG 
allocations. In some cases, the population data for a tribe’s formula 
area is greater than its enrollment. In general, for those cases, HUD 
does not allow population data to exceed twice the tribe’s enrollment. 
End of side bar] 

Figure 2: Weighted Share of Seven Need Factors in the IHBG Formula: 

[Refer to PDF for image: pie-chart] 

Households that are in overcrowded units or lack plumbing or kitchen 
facilities: 25%; 
Households with housing costs that exceed 50 percent of income: 22%; 
Number of low-income households in excess of available housing: 15%; 
Extremely low-income households: 13%; 
Population (American Indians and Alaska Natives): 11%; 
Low-income households: 7%; 
Very low-income households: 7%. 

Source: GAO. 

[End of figure] 

According to the data HUD uses annually for the IHBG formula 
allocation, each of the need factors has increased from 1999 to 2009. 
For example, during this period, the number of AI/AN households living 
in overcrowded units and units lacking kitchen facilities increased by 
almost 10 percent, and the number of AI/AN households with housing 
expenses greater than 50 percent of their income increased by 43 
percent. In order to receive their grant distribution, grantees must 
submit an Indian Housing Plan (IHP) for each program year. In the IHP, 
grantees identify their affordable housing needs and describe the 
housing activities they plan to pursue to address those needs. At the 
end of the program year, grantees also must submit an Annual 
Performance Report (APR) that outlines actual accomplishments and, if 
federal fiscal year expenditures are $500,000 or more, the results of 
an independent audit. HUD is modifying its reporting process and plans 
to implement a combined IHP and APR with several revisions in fiscal 
year 2011. In addition to reporting, grantees must follow requirements 
for environmental reviews, procurement and labor standards, family 
eligibility, and accounting for program income. 

As part of its oversight, HUD also conducts periodic onsite monitoring 
visits with grantees using a risk-based approach to select which 
grantees it will visit each year. Risk factors include grant size and 
the amount of time since a grantee's last visit. In fiscal year 2009, 
ONAP completed 60 onsite monitoring visits with NAHASDA grantees 
nationwide. Additionally, HUD has enforcement procedures for grantees 
found to be noncompliant with program requirements. Enforcement 
procedures involve issuing (1) a letter of warning, (2) a notice of 
intent to impose remedies if there is continued noncompliance, and (3) 
imposition of remedies, which includes the option of a hearing before 
a hearing officer. Enforcement can be discontinued at any time if the 
grantee corrects the violation prior to the imposition of remedies. 

The IHBG Program Has Helped Tribes Address Some of Their Affordable 
Housing Needs, but HUD and Tribes Reported That Small Grantees Face 
Unique Challenges: 

Native American tribes receiving NAHASDA grants have used the funds to 
develop new housing and to provide other types of housing assistance. 
However, fewer small grantees, which receive lesser grants, have 
developed new housing with NAHASDA funds compared to those receiving 
larger grants, even though it is the primary federal housing program 
for Native Americans. Many NAHASDA grantees, including those receiving 
lesser grants, reported providing tenant-based rental assistance, 
housing counseling, and downpayment assistance. Smaller grantees--
those receiving less than $250,000 annually--often focus on providing 
those services. The APR that HUD currently uses to track the use of 
grant funds does not collect data on activities that are not unit-
based (directly involving housing units built, acquired, or 
rehabilitated). However, HUD is revising its reporting to track more 
activities. Both HUD and grantees agreed that the opportunity to 
leverage grant funds to secure funds from other sources allows 
grantees to better address their affordable housing needs. However, a 
lack of administrative capacity and other challenges limit additional 
funding opportunities for some grantees. 

Tribes Have Used IHBG Funds to Build, Acquire, and Rehabilitate 
Affordable Housing and to Provide Other Types of Housing Assistance: 

In recent years, Native American tribes and TDHEs receiving IHBG funds 
under NAHASDA have used the funds to build, acquire, and rehabilitate 
affordable housing units and to provide other types of housing 
assistance, such as tenant-based rental assistance, housing 
counseling, and downpayment assistance to eligible tribal members. 
During fiscal years 2003 through 2008, NAHASDA grantees collectively 
used IHBG funds to build 8,130 homeownership and 5,011 rental units; 
acquire 3,811 homeownership and 800 rental units; and rehabilitate 
27,422 homeownership and 5,289 rental units (see figure 3). 

Figure 3: Number of Homeownership and Rental Units Developed with IHBG 
Funds, Fiscal Years 2003 through 2008: 

[Refer to PDF for image: stacked vertical bar graph] 

Fiscal year: 2003; 
Homeownership units built: 2,010; 
Homeownership units acquired: 880; 
Homeownership units rehabilitated: 7,157; 
Rental units built: 1195; 
Rental units acquired: 226; 
Rental units rehabilitated: 1,064. 		 

Fiscal year: 2004; 
Homeownership units built: 1,192; 
Homeownership units acquired: 465; 
Homeownership units rehabilitated: 3,647; 
Rental units built: 927; 
Rental units acquired: 147; 
Rental units rehabilitated: 1,127. 		 

Fiscal year: 2005; 
Homeownership units built: 1,157; 
Homeownership units acquired: 258; 
Homeownership units rehabilitated: 6,203; 
Rental units built: 647; 
Rental units acquired: 130; 
Rental units rehabilitated: 827. 

Fiscal year: 2006; 
Homeownership units built: 1,194; 
Homeownership units acquired: 798; 
Homeownership units rehabilitated: 4,442; 
Rental units built: 863; 
Rental units acquired: 154; 
Rental units rehabilitated: 779. 

Fiscal year: 2007; 
Homeownership units built: 1,548; 
Homeownership units acquired: 608; 
Homeownership units rehabilitated: 3,041; 
Rental units built: 579; 
Rental units acquired: 95; 
Rental units rehabilitated: 567. 

Fiscal year: 2008; 
Homeownership units built: 1,029; 
Homeownership units acquired: 802; 
Homeownership units rehabilitated: 2,932; 
Rental units built: 800; 
Rental units acquired: 48; 
Rental units rehabilitated: 925. 

Source: GAO analysis of HUD data. 

[End of figure] 

HUD tracks the number of units that grantees build, acquire, and 
rehabilitate using IHBG funds each fiscal year through the grantees' 
APR. Grantees use the APR, which serves as a self-assessment document, 
to report on their use of grant funds at the end of each program year. 
[Footnote 15] The APR also follows the Indian Housing Plan (IHP), 
which grantees submit to HUD each program year to describe their 
affordable housing needs and how they will use grant funds to address 
those needs. 

Between 2003 and 2008, grantees developed more homeownership units 
than rental units with IHBG funds. For example, the number of 
homeownership units built was more than one and one-half times the 
number of rental units built; the number of homeownership units 
acquired was almost five times the number of rental units acquired; 
and the number of homeownership units rehabilitated was more than five 
times the number of rental units rehabilitated. National American 
Indian Housing Council board members that also serve as executive 
directors for tribal housing entities nationwide told us that while 
large-scale rental housing is often needed, such properties are very 
expensive to maintain over time.[Footnote 16] They said that, as a 
result, the associated costs provide a disincentive for tribes to 
develop this type of housing. For example, the housing director of one 
small grantee we visited showed us the tribe's new senior apartment 
community, which was funded in part by NAHASDA (see figure 4). During 
our visit, the director explained that he spends much of his own time 
carrying out maintenance services at the facility. 

Figure 4: $1 Million Senior Apartment Community Built with $400,000 in 
IHBG Funds (ONAP Alaska Region): 

[Refer to PDF for image: photograph] 

Source: GAO. 

[End of figure] 

Among NAHASDA grantees, during fiscal years 2003 through 2008, the 
most common development activity was rehabilitation of existing units, 
particularly homeownership units. In each fiscal year, the number of 
homeownership units rehabilitated was substantially greater than the 
number of homeownership units built or acquired. Grantees can use IHBG 
funds to rehabilitate units owned by the tribe or TDHE or units owned 
by private entities that will be occupied by eligible members, or they 
can provide the funds to eligible homeowners for rehabilitation. 

In addition to these unit-based activities, many grantees, including 
several of those we interviewed, have used IHBG funds to provide 
tenant-based rental assistance, housing or financial literacy 
counseling, and downpayment assistance to eligible individuals and 
families. Based on the results of our survey of all grantees for 2008, 
in fiscal years 2008 and 2009, approximately 50 percent of grantees 
used IHBG funds to provide tenant-based rental assistance; more than 
50 percent used IHBG funds to provide housing or financial literacy 
counseling; and approximately 30 percent used IHBG funds to provide 
downpayment assistance (see table 1). 

Table 1: Survey Respondents Reporting That They Provided Specific 
Types of Housing Assistance Using IHBG Funds in Fiscal Years 2008 and 
2009: 

Type of assistance: Tenant-based rental assistance; 
Fiscal year 2008: 52 percent (112/217); 
Fiscal year 2009: 49 percent (104/214). 

Type of assistance: Housing or financial literacy counseling; 
Fiscal year 2008: 63 percent (136/217); 
Fiscal year 2009: 54 percent (114/211). 

Type of assistance: Downpayment assistance; 
Fiscal year 2008: 36 percent (74/206); 
Fiscal year 2009: 28 percent (57/204). 

Source: GAO survey of NAHASDA grantees. 

Note: The number of grantees providing a response for each type of 
assistance varied. A total of 232 grantees responded to our survey. 

[End of table] 

Grantees that have housing stock developed with 1937 Act program 
funds, or pre-NAHASDA housing stock, also can use IHBG funds to 
provide modernization and operating assistance for those housing 
units. In fiscal year 2008, HUD allocated IHBG funds to support 
modernization or operation of 57,523 pre-NAHASDA units that grantees 
collectively maintained in their housing inventories.[Footnote 17] HUD 
also tracks modernization or operation of pre-NAHASDA units in the APR. 

HUD and Tribes Reported That Small Grantees Face Challenges in 
Developing New Housing: 

HUD and tribes we interviewed and surveyed reported that small 
grantees, which receive lesser grants, face particular challenges in 
building new housing units with IHBG funds. The minimum grant amount 
in fiscal year 2008 was $48,660 ($49,715 for fiscal year 2009). For 
the purposes of our review, we generally considered annual grants less 
than $250,000 to be lesser grants and the grantees receiving those 
grants to be small grantees. In fiscal year 2008, 102 out of 359 
grantees received grants of less than $250,000 to maintain existing 
housing, develop new housing, and pursue other eligible activities 
under NAHASDA (see figure 5). 

Figure 5: Fiscal Year 2008 IHBG Adjusted Grant Amounts: 

[Refer to PDF for image: pie-chart] 

$1 million or more (N=140): 39%; 
$500,000 to less than $1 million (N=52): 14%; 
$250,000 to less than $500,000 (N=65): 18%; 
$50,000 to less than $250,000 (N=78): 22%; 
Less than $50,000 (N=24): 7%. 

Total = 359 Grantees. 

Source: GAO analysis of HUD data. 

Note: The 359 grantees are tribes or TDHEs that represent one or more 
tribes. Individual tribes receive an allocation; however, the grantee 
receives the total distribution of funds. Under umbrella TDHEs that 
represent more than one tribe, some smaller grant amounts may be 
combined. Adjusted grant amounts include backfunding to grantees or 
repayments to HUD, as applicable. 

[End of figure] 

Out of 227 grantees providing a survey response to whether they had 
built new housing units using any IHBG funds since participating in 
NAHASDA, 159 (70 percent) indicated that they had built at least one 
unit (see table 2). Of the 22 small grantees in this group (those 
receiving less than $250,000 in fiscal year 2008), the average number 
of units was considerably small. The three grantees receiving less 
than $50,000 built an average of four units over the life of their 
participation in the program, compared with an average 12 units for 
the 19 grantees that received between $50,000 and $250,000 in 2008. 
The larger grantees have built the majority of units. The 22 grantees 
that responded to this survey question and received $1 million or more 
in fiscal year 2008 built, on average, almost 450 housing units each. 

Table 2: Survey Respondents Reporting That They Used IHBG Funds to 
Build New Units, by Fiscal Year 2008 Grant Size: 

Grant size: Less than $50,000; 
Number of grantees: 3; 
Average number of units: 4.33. 

Grant size: $50,000 to less than $250,000; 
Number of grantees: 19; 
Average number of units: 12.32. 

Grant size: $250,000 to less than $500,000; 
Number of grantees: 58; 
Average number of units: 20.12. 

Grant size: $500,000 to less than $1 million; 
Number of grantees: 57; 
Average number of units: 48.67. 

Grant size: $1 million or more; 
Number of grantees: 22; 
Average number of units: 447.59. 

Grant size: Total; 
Number of grantees: 159. 

Source: GAO survey of NAHASDA grantees. 

Note: Unit averages are for units built with any IHBG funds over the 
life of grantees' participation in the program. A total of 232 
grantees responded to our survey and 227 responded to this question. 
Of those 227, 68 reported not building any units with IHBG funds. 

[End of table] 

Among the 12 grantees we interviewed, 4 received less than $250,000 in 
2008, and only 1 of the 4 received more than that amount in any of its 
prior years in the program. Of those 4 grantees, only 1 had developed 
new housing with IHBG funds. During our visit, the housing director 
showed us a 10-home development that was completed in 2006 with IHBG 
and other funding, including funding from another HUD program. 
Although the grantee completed its first IHBG-funded development in 
2006, it has participated in NAHASDA since the program's inception in 
fiscal year 1998. One other small grantee we interviewed also had 
developed new housing, but not with IHBG funds. During our visit with 
the second grantee, the tribal administrator explained that the 
grantee's newest units were funded with 1937 Act funds it received 
from HUD just before NAHASDA's implementation. That grantee also has 
participated in NAHASDA since its inception. 

Development of new housing can be difficult for smaller grantees 
receiving lesser grants. ONAP officials and several grantees we 
interviewed stated that new housing development with lesser grants or 
minimum funding can take place only if the funds are accumulated over 
several years or if development is done in phases or on a smaller 
scale (see figure 6). In many cases, new development is possible for 
those grantees only if IHBG funds are leveraged (combined with funds 
from other sources), a process which can involve additional 
challenges, which we will discuss later in this report. 

Figure 6: Small Grantee Replacing a Log Cabin with a 400 to 500 Square 
Foot Home Using $30,000 in IHBG Funds (ONAP Alaska Region): 

[Refer to PDF for image: photograph] 

[End of figure] 

In our survey, we asked all respondents to suggest best practices or 
effective strategies for grantees receiving less than $250,000 in 
annual IHBG funds. Similar to what ONAP officials and the grantees we 
interviewed said, many survey respondents suggested that grantees 
receiving lesser grants pursue phased housing development, leveraging, 
and small-scale development. Additionally, several respondents 
suggested that the following actions can be helpful: 

* pool their resources (grant funds, staff, and expertise) with other 
small grantees, such as under an umbrella TDHE or informally, and 
rotate new development among grantees; 

* minimize administrative expenses (for example, by limiting staff to 
those that have experience with housing programs or in grant writing) 
or work with consultants; 

* focus on small projects critical to the community, such as housing 
rehabilitation or home maintenance, or on providing only rental 
assistance and downpayment assistance; and: 

* network with and seek technical assistance from other tribes, agency 
officials, or NAIHC. 

Further details on survey respondents' suggestions for grantees 
receiving less than $250,000 annually are discussed in Appendix II. 

The Annual Performance Report Does Not Collect Data on Several 
Significant Eligible Housing Activities, but HUD Expects Revisions to 
Help Efforts to Assess the Impact of NAHASDA on Low-Income Native 
Americans: 

The APR that HUD uses to collect data on grantees' use of IHBG funds 
does not track several significant activities because HUD currently 
tracks only unit-based activities in the APR. Grantees report on the 
number of units they build, acquire, and rehabilitate as well as on 
the number of pre-NAHASDA units they operate and modernize using IHBG 
funds. However, they are not required to report on the number of 
individuals or households that receive tenant-based rental assistance, 
housing counseling, or downpayment assistance. Grantees can include 
this type of information as narrative in the APR, but HUD does not 
track it. As a result, it is not included in HUD's annual report to 
Congress on program accomplishments for NAHASDA. Since HUD currently 
does not track and report IHBG-funded activities that are not unit- 
based, smaller grantees that receive lesser grants and either have not 
developed new housing or have done so over several years also have not 
been able to adequately demonstrate their use of IHBG funds. Those 
grantees often focus on providing members with services such as rental 
and downpayment assistance. 

In addition to limitations in the information it captures, the current 
APR is a multiyear report that requires grantees to report on multiple 
fiscal years when prior year funds remain unspent. At present, a grant 
remains open across fiscal years until the funds from that grant are 
fully expended. Both ONAP officials and officials for two grantees we 
interviewed stated that multiyear reporting can be confusing and can 
reduce the accuracy of the data being reported. For example, ONAP 
headquarters officials explained that some grants used to fund 
construction have remained open for several years concurrently. 
According to the officials, this confuses grantees' reporting on use 
of funds as well as HUD's administrative process. 

ONAP has begun revising the APR and plans to implement the revised 
format in fiscal year 2011. The revised APR is expected to be a single-
year report, which should eliminate multiyear reporting 
inconsistencies. Additionally, HUD's planned revisions should allow 
grantees to report on activities beyond housing units built, acquired, 
and rehabilitated and demonstrate greater impact relative to those 
units--for example, the number of students or elderly households 
assisted, or the number of individuals moved into housing from 
homelessness or substandard housing conditions. The new format also 
will expand general reporting categories because HUD plans to track 
tenant-based rental assistance, downpayment and closing-cost 
assistance, and homebuyer lending subsidies. Finally, the IHP and APR 
will be a combined document, which HUD believes will further simplify 
reporting. Measures that address a full range of activities should 
help tribes receiving lesser grants to better demonstrate how and to 
what extent NAHASDA funds are helping them meet their affordable 
housing needs. Additionally, a more complete set of program measures 
should help HUD and Congress better assess the extent of NAHASDA's 
impact on low-income Native Americans and whether the program is a 
significant improvement over the programs it replaced. 

HUD and Tribes Agreed that Leveraging Their IHBG Funds with Funds from 
Other Sources Allows Grantees to Better Address Their Affordable 
Housing Needs: 

HUD and tribes participating in NAHASDA agreed that the opportunity to 
leverage IHBG funds with funds from other sources, a key component of 
NAHASDA, allows grantees to better address their affordable housing 
needs. HUD officials told us that the opportunity to leverage IHBG 
funds to support affordable housing activities is a significant 
benefit for tribes participating in NAHASDA, and a positive change for 
Native American housing since leveraging was not common under 1937 Act 
programs. Moreover, an official in one regional ONAP office described 
leveraging as a core concept of NAHASDA. While leveraging HUD funds 
was allowed prior to NAHASDA, two separate regional officials 
explained that leveraging still had been a relatively new concept for 
HUD and tribes since the public housing structure under which tribes 
previously received assistance did not encourage leveraging. NAHASDA 
requires that grantees explain how grant funds will allow them to 
leverage additional resources in their annual IHP. 

As part of self-determination, grantees prioritize how they use grant 
funds to address a variety of housing needs that qualify as eligible 
NAHASDA activities. With regard to leveraging IHBG funds, ONAP 
officials in one region stated that none of the grantees in that 
region was so successful or received so large a grant that it did not 
need additional support to address its housing needs. In several 
regional offices, the officials told us that they provide resources to 
assist grantees with leveraging. Some offices had a staff member who 
was dedicated to helping grantees identify leveraging opportunities 
and providing them with technical assistance. However, one regional 
official noted that regional staff members do not assist grantees with 
completing applications for funding. 

Half of the grantees we interviewed and 48 percent (100/209) of survey 
respondents answering a question on the role leveraging plays in their 
ability to fund affordable housing development and activities said 
that it plays a great or very great role. Many of the grantees 
participating in leveraging activities explained that IHBG funding 
alone is insufficient to adequately address their communities' 
affordable housing needs. The housing director of one large grantee we 
visited told us that, instead of using IHBG funds independently to 
support housing activities, he focused on leveraging the funds to 
obtain additional support. He said he viewed NAHASDA as opening up the 
opportunity for tribes to use as many resources as possible to fund 
their housing needs. The housing director of a second large grantee we 
visited explained that nearly all of the grantee's 70-plus IHBG-funded 
units had been built with a combination of funds from the IHBG program 
and other sources. A third housing director provided us with records 
showing that, since NAHASDA's inception in 1998, the grantee had 
leveraged its IHBG funds to secure additional funding for housing 
development at an almost one-to-one ratio. Survey respondents 
leveraging their IHBG funds provided similar comments. They stated 
that leveraging is necessary either to fully fund a development 
project; to pursue both development and rehabilitation; to build 
multiple housing units; or to generally address their communities' 
affordable housing needs. Some respondents offered examples of how 
combined funding from the IHBG program and other sources allowed them 
to address specific housing needs, including funding a new housing 
rehabilitation program for members, purchasing units to address 
overcrowding and homelessness, and providing homebuyer assistance. 

Based on our interviews with NAHASDA grantees and on survey responses 
grantees provided, we found that grantees generally use the Indian 
Community Development Block Grant (ICDBG) program and the Section 184 
Indian Home Loan Guarantee program in combination with the IHBG 
program to fund affordable housing activities. Both the ICDBG and 
Section 184 are HUD programs. Some grantees also use programs provided 
by the U.S. Department of Agriculture (USDA) Rural Development, and 
some larger grantees use the Low-Income Housing Tax Credit program 
(see table 3). 

Table 3: NAHASDA Grantees' Use of Specific Funding Programs in 
Combination with the IHBG Program Based on Survey Responses: 

Program and agency: Title VI Loan Guarantee Program; HUD; 
Description: Authorized by NAHASDA in 1996 and enables HUD to provide 
a 95 percent loan guarantee to private lenders or investors that make 
loans to NAHASDA grantees to develop housing and community facilities. 
The Title VI loan is secured by a tribe's or tribally designated 
housing entity's pledge of its current and future IHBG funds; 
Respondent participation (percentage and number): 17 percent (33/199). 

Program and agency: Indian Community Development Block Grant Program 
(ICDBG); HUD; 
Description: Authorized by Title I of the Housing and Community 
Development Act of 1974, as amended, and assists eligible grantees 
with developing viable communities, mainly by funding housing and 
economic development activities principally for persons of low-and 
moderate-income. Program regulations provide for two types of grants, 
single purpose and imminent threat. Single purpose grants are awarded 
competitively within ONAP regions.[A] Eligible applicants are 
federally recognized Indian tribes, Alaska Native villages, Village 
and Regional Corporations established under the Alaska Native Claims 
Settlement Act, and certain other tribal organizations; 
Respondent participation (percentage and number): 70 percent (153/218). 

Program and agency: Section 184 Indian Home Loan Guarantee Program; 
HUD; 
Description: Authorized by the Housing and Community Development Act 
of 1992 and designed to offer homeownership and housing rehabilitation 
opportunities to eligible Native Americans on trust or restricted 
lands. The program provides a 100 percent federal guarantee to private 
lenders for home loans made to federally recognized tribes or their 
members and tribally designated housing entities; 
Respondent participation (percentage and number): 58 percent (124/214). 

Program and agency: Section 502 Single-Family Housing Direct Loan 
Program; USDA; 
Description: Authorized by the Housing Act of 1949, as amended, to 
provide very low-and low-income individuals or families in rural areas 
with loans to finance the purchase or construction of a home at an 
affordable interest rate. Applicants may obtain 100 percent financing; 
Respondent participation (percentage and number): 18 percent (35/191). 

Program and agency: Section 515 Rural Rental Housing Loan Program; 
USDA; 
Description: Authorized by the Housing Act of 1949, as amended, to 
provide loans to any individual, corporation, association, trust, 
Indian tribe, public or private nonprofit organization, consumer 
cooperative, or partnership to provide rental or cooperative housing 
and related facilities in rural areas for very low-, low-, or moderate-
income persons or families, including elderly persons and persons with 
disabilities; 
Respondent participation (percentage and number): 10 percent (19/190). 

Program and agency: Rural Community Development Initiative Grant 
Program (RCDI); USDA; 
Description: Created in 2000 to develop the capacity and ability of 
nonprofit organizations, low-income rural communities, or federally 
recognized tribes to undertake projects related to housing, community 
facilities, or community and economic development in rural areas. 
Eligible applicants are qualified private, nonprofit (including faith-
based and community), and public (including tribal) intermediary 
organizations that provide financial and technical assistance programs 
to multiple recipients; 
Respondent participation (percentage and number): 12 percent (21/178). 

Program and agency: Low-Income Housing Tax Credit Program (LIHTC); 
IRS; 
Description: Created by the Tax Reform Act of 1986. Under the program, 
state and local agencies are authorized to issue federal tax credits 
for the acquisition, rehabilitation, or construction of affordable 
rental housing. To qualify for credit, a project must have a specific 
proportion of its units set aside for lower income households and the 
rents on those units are limited to a maximum of 30 percent of 
qualifying income. The amount of the credit is based on several 
factors, including the development cost and the proportion of units 
that is set aside. Credits are provided for a period of 10 years. 
State and local agencies that issue LIHTC awards distribute the funds 
competitively and according to a qualified allocation plan; 
Respondent participation (percentage and number): 25 percent (51/205). 

Source: GAO analysis of HUD, USDA, and GAO's NAHASDA survey data. 

Note: The number of grantees providing a response for each program 
varied. A total of 232 grantees responded to our survey. 

[A] The ICDBG single purpose grant is awarded based on five rating 
factors, including (1) capacity of the applicant, (2) need or extent 
of the problem, and (3) leveraging resources. Imminent threat funds 
may be made available to alleviate or remove imminent threats to 
health or safety. The funds are awarded only if ONAP determines that 
certain regulatory requirements are met. 

[End of table] 

Of the 12 grantees we interviewed, 8 told us that either the TDHE or 
the tribe itself had received competitively awarded grants through the 
ICDBG program and used those grants to fund a variety of projects. In 
addition to housing development, the projects included providing water 
and sewer systems; community buildings, such as a foster care facility 
and public safety building; flood protection for homes; and small 
business incubators (see figure 7). Among survey respondents, 
participation in the ICDBG program in individual ONAP regions was 
between 60 and 95 percent, with the highest participation rate in the 
Northern Plains region, followed by the Northwest region.[Footnote 18] 
Five of the 12 grantees we interviewed said they had used the Section 
184 loan program, and two others said they would consider the program 
in future leveraging efforts. Among survey respondents, participation 
in the Section 184 loan program in individual ONAP regions was more 
varied, from 39 to 85 percent, with the highest participation rate in 
the Northern Plains region, followed closely by the Northwest region. 
[Footnote 19] 

Figure 7: Tribal Temporary Foster Care Facility and Public Safety 
Building Funded through the ICDBG Program (ONAP Northwest Region): 

[Refer to PDF for image: 2 photographs] 

Temporary foster care facility: 
Public safety building: 

Source: GAO. 

[End of figure] 

Although USDA's Rural Development provides low-income housing 
assistance through several programs for which Native American tribes 
or their members are eligible, few NAHASDA grantees use the three USDA 
programs we asked about in our survey. Several grantees we interviewed 
said they participated in at least one USDA program in combination 
with the IHBG program; however, overall numbers from our survey show 
that only 10 percent of grantees reported using USDA's Section 515 
program (Rural Rental Housing) and 18 percent reported using the 
Section 502 program (Single-Family Housing). USDA Rural Development 
officials told us they were surprised the figures were so low, 
especially given that Native American areas (along with the 
Mississippi Delta, Appalachia, and the Colonias on the Mexican border) 
are among the primary areas they target in order to serve some of the 
poorest and worst housed groups in the nation. They also said that 
they have set-asides under the Section 515 program for new 
construction on tribal lands. Several of the grantees we interviewed 
told us that they had little or no interaction with USDA local field 
office officials, and when they did, it was usually at their tribe's 
initiative. For example, one small grantee's housing director said 
that he was aware that some USDA programs might benefit his tribe, but 
that he had not had any contact with officials at the local USDA 
office, even though the office is about one hour away. USDA also told 
us that they are currently developing a more targeted outreach 
strategy that identifies tribal housing authorities as critical 
intermediaries and partners in raising the visibility of USDA Rural 
Development's programs in Indian country. 

Some larger grantees also use Low-Income Housing Tax Credit (LIHTC) 
programs in combination with the IHBG program to fund affordable 
housing activities (see figs. 8 and 9). For each ONAP region, we 
interviewed two grantees whose population and grant size varied 
widely. As such, of the 12 grantees we interviewed, we make references 
to the "six smaller" or "six larger" grantees. Five of the six larger 
grantees we interviewed said that they currently use or had used LIHTC 
programs. Similarly, 96 percent of survey respondents who said they 
participate in LIHTC programs received grants of at least $250,000 in 
fiscal year 2008. 

Figure 8: Tribal Community Center Funded through Low-Income Housing 
Tax Credit Programs (ONAP Northern Plains Region): 

[Refer to PDF for image: photograph] 

Source: GAO. 

[End of figure] 

Figure 9: Example of Large Grantee Housing Project (ONAP Alaska 
Region): 

[Refer to PDF for image: 4 photographs] 

Large grantee purchased homes (top photos) and used IHBG, low-income 
housing tax credit programs, and other funding to replace them with 
new affordable homes (bottom photos). 

Source: GAO. 

[End of figure] 

Lack of Administrative Capacity and Other Challenges Limit Additional 
Funding Opportunities for Some Grantees: 

According to HUD officials and the grantees we interviewed, some 
grantees are limited in their ability to seek additional funds, 
including those that (1) have limited administrative resources, which 
prevents them from participating in a variety of programs; (2) are too 
small to qualify for LIHTC programs, which may require the development 
of a minimum number of housing units to serve a significant proportion 
of the low-income population; and (3) undergo frequent administrative 
turnover. Additionally, though most of the grantees agreed that 
leveraging their IHBG funds by combining them with funds from other 
sources is beneficial, most grantees participating in multiple 
programs were larger grantees. And, among the 48 percent of survey 
respondents indicating that leveraging plays a great or very great 
role in their ability to fund affordable housing and related 
activities, 81 percent received at least $250,000 in IHBG funds in 
2008. Of the respondents indicating that leveraging plays some, 
little, or no role in funding affordable housing, 66 percent reported 
having 5 or fewer persons on their housing staff (staff that manage, 
administer, and prepare grants or reports for the grantee's housing 
program). 

All six of the smaller grantees we interviewed said they lacked some 
aspect of administrative capacity (such as housing staff resources, 
expertise, and time), which limits or prevents their participation in 
other programs or their ability to compete for non-NAHASDA funds. 
Three of the six smaller grantees had not applied for funding from 
other federal agencies, and three had not applied for or had 
experienced challenges applying for the ICDBG program, though ICDBG 
participation is high among grantees overall. Two of the six grantees 
also had not applied for the competitive portion of NAHASDA stimulus 
funds due to time constraints or to not having a grant writer to 
prepare a competitive proposal.[Footnote 20] Grantees we interviewed 
and those responding to our survey also reported that burdensome 
administrative requirements impact their ability to participate in 
NAHASDA and other housing programs (see figure 10). The grants planner 
for one small grantee we visited said his tribe declined the IHBG 
grant one year because it determined the grant amount would not 
justify the effort and cost of participating in the program. The 
housing director of another small grantee explained that while 
leveraging offers the ability to stretch dollars, without enough 
funding to pay for the necessary staff resources, it is very difficult 
to take on the extra burden of making different funding sources work 
together. 

Figure 10: Percentage of Survey Respondents Reporting Specific 
Challenges to Leveraging as Moderate to Very Great: 

[Refer to PDF for image: horizontal bar graph] 

Limited capacity due to resources: 75%; 
Burdensome administrative requirements from funding sources: 74%; 
Incompatibility among different funding programs: 68%; 
Lack of coordination between agencies providing funding: 68%; 
Limited interest from financial institutions: 61%; 
Exclusion from some programs due to size: 51%. 

Source: GAO survey of NAHASDA grantees. 

Note: The number of grantees providing a response for each leveraging 
challenge varied. 

[End of figure] 

As noted, five of the six larger grantees we interviewed indicated 
they had participated in LIHTC programs. However, none of the smaller 
grantees we interviewed indicated that they had participated in LIHTC 
programs, and two explained that such programs would require more 
resources than were available to them. For example, the housing 
director of one of the smaller grantees said that they had considered 
participating in a LIHTC program, but found they could not undertake 
the required scale of development. HUD data supports this assessment. 
According to HUD, of 16,754 LIHTC projects placed into service between 
1995 and 2006, only about 17 percent of the projects had 20 or fewer 
units.[Footnote 21] 

Limited resources mainly impact smaller grantees that receive lesser 
grants, but grantees of any size may experience frequent turnover in 
housing and management staff that affect the continuity of housing 
plans and activities. One housing director explained that frequent 
turnover in housing management and staff can contribute to a lack of 
knowledge of implementing housing programs and lack of consistency in 
the grantee's housing plan. 

Incompatibility among different funding programs was cited by 68 
percent of survey respondents as a challenge to leveraging. Some other 
funding programs may be incompatible with the IHBG program due to 
conflicting requirements, such as requirements for eligible 
beneficiaries. In addition, 68 percent of survey respondents 
identified lack of coordination between agencies providing funding as 
a leveraging challenge. Several grantees we interviewed reported that 
a lack of coordination between HUD and other funding agencies limits 
their efforts to combine IHBG funds with funds from those other 
agencies. For example, the grantees explained that, like HUD, various 
agencies require grantees to complete environmental reviews when they 
receive funds to develop housing and related infrastructure. However, 
they said that HUD generally does not accept environmental reviews 
that meet other agencies' requirements, making it necessary for them 
to have multiple reviews carried out. 

Officials from NAIHC and three grantees we interviewed also reported 
that limited interest from financial institutions is an ongoing 
challenge for tribal entities in obtaining financing for housing 
development. They said that many banks are reluctant to do business 
with tribes because of cumbersome procedures or lack of experience. 
For example, they explained that the Bureau of Indian Affairs' (BIA) 
process for issuing land title or trust status reports when a mortgage 
is made on trust lands is lengthy and inefficient. Several grantees 
explained that BIA's process for issuing this paperwork can take 
months or years, making such transactions impractical for lenders and 
difficult for members pursuing homeownership or receiving 
homeownership assistance. In 1998 we reported that from 1992 through 
1996, lenders made only 91 conventional home purchase loans to Native 
Americans on trust lands (80 of which went to members of only two 
tribes), largely because lenders have a limited understanding of land 
ownership, jurisdiction, and legal issues pertaining to Native 
American trust lands.[Footnote 22] 

A more recent source notes that while federal programs and other 
efforts subsequently encouraged greater lending to Native Americans on 
trust lands, challenges remain. Both the Section 184 and NAHASDA's 
Title VI loan guarantee programs aim to provide an incentive for 
private lenders to make housing loans to tribes and their members. 
[Footnote 23] In comparison with the Section 184 program, 
participation in Title VI was low among grantees we interviewed and 
those responding to our survey. Two of the 12 grantees we interviewed 
and 17 percent (33/199) of survey respondents said they had 
participated in Title VI. Data we received from ONAP on both loan 
programs support what we found on Section 184 and Title VI 
participation. In fiscal year 2008, HUD provided guarantees for 1,577 
Section 184 loans totaling $274.8 million compared with only 8 Title 
VI loans totaling $14.2 million. And, in fiscal year 2009, HUD 
provided guarantees for 2,401 Section 184 loans totaling $395.4 
million compared with only 6 Title VI loans totaling $12.8 million. 
However, Title VI is a newer loan program and it offers lenders a 95 
percent federal guarantee, compared with the Section 184 program's 100 
percent guarantee. Some individual grantees also have made efforts to 
facilitate lending in their communities. For example, one grantee we 
met with had an agreement with BIA to do title permitting onsite in 
order to expedite the title process for Section 184 program loans, and 
two other grantees we interviewed had established their own banks. 

Survey Respondents and Tribes We Interviewed Generally Viewed NAHASDA 
as Effective in Meeting Their Low-Income Housing Needs, but Some 
Reported Challenges, Including Concerns with the Allocation Formula: 

Grantees responding to our survey and those we interviewed generally 
viewed NAHASDA as an effective affordable housing program and as an 
improvement over the programs it replaced. A primary reason was that 
NAHASDA emphasizes tribal self-determination, which is the right to 
use grant funds with minimal restrictions to meet tribes' self-
identified housing needs. Survey respondents reported that they view 
NAHASDA as most effective at providing homeownership opportunities and 
improving housing conditions for low-income Native Americans. However, 
some grantees we spoke with and some responding to our survey had 
specific concerns about NAHASDA, such as problems with meeting what 
they considered to be onerous regulatory requirements and perceived 
inequities in the grant allocation formula. Negotiated rulemaking 
between HUD and tribes participating in NAHASDA provides the tribes 
with an opportunity to address their concerns with NAHASDA's 
regulations, including concerns pertaining to the grant allocation 
formula. 

Tribes View NAHASDA as Effective at Addressing Their Affordable 
Housing Needs and as an Improvement over the HUD Programs It Replaced: 

Based on our survey of and interviews with NAHASDA grantees, most 
grantees view NAHASDA as an effective low-income housing program, and 
a primary reason was NAHASDA's recognition of tribal self-
determination. Of the 223 survey respondents that provided views on 
NAHASDA's effectiveness, almost 90 percent (200 grantees) reported 
that the program has had a positive effect in helping them to meet 
their affordable housing needs (see table 4). Of those 200 grantees, 
more than half (110 grantees) reported that NAHASDA has had a very 
positive effect. Similarly, 8 of the 12 grantees we interviewed told 
us that NAHASDA has simplified the process of providing housing 
benefits for their tribes. However, 5 of the 8 grantees who said that 
NAHASDA has simplified the process of accessing affordable housing 
benefits also mentioned some cumbersome aspects to the program, such 
as the reporting requirements. 

Table 4: Survey Respondents' Views on the Overall Effectiveness of 
NAHASDA: 

Very positive; 
Number of responses: 110; 
Percentage of those that answered the question: 49.3. 

Generally positive; 
Number of responses: 90; 
Percentage of those that answered the question: 40.4. 

Neither positive or negative; 
Number of responses: 15; 
Percentage of those that answered the question: 6.7. 

Generally negative; 
Number of responses: 7; 
Percentage of those that answered the question: 3.1. 

Very negative; 
Number of responses: 1; 
Percentage of those that answered the question: 0.4. 

Total; 
Number of responses: 223; 
Percentage of those that answered the question: 100. 

Source: GAO survey of NAHASDA grantees. 

Note: Results shown exclude seven responses of "don't know or no 
opinion" and two "not checked" responses. 

[End of table] 

Among survey respondents, there were some minor differences in the 
results across grantees receiving grants of various sizes. Of the 47 
survey respondents that provided views on NAHASDA's effectiveness and 
that received a grant less than $250,000 in fiscal year 2008, 46 had a 
generally positive or very positive view of NAHASDA's effectiveness 
(see table 5). In contrast with this consistently positive view of 
NAHASDA among respondents that received lesser grants, eight grantees 
that received more than $250,000 reported negative views on NAHASDA's 
effectiveness. Our analysis of survey respondents' written 
explanations shows that some grantees preferred the 1937 Act housing 
programs because they were able to successfully compete for funds. 
Officials we spoke with at NAIHC said that larger tribes with 
sophisticated housing departments were more likely to view NAHASDA as 
less effective than the 1937 Act programs it replaced because they may 
receive less funding under the block grant formula. 

Table 5: Survey Respondents' Views on the Overall Effectiveness of 
NAHASDA, by Fiscal Year 2008 Grant Size: 

Very or generally positive: 
Grantees receiving less than $250,000: Number: 46; 
Grantees receiving less than $250,000: Percentage: 97.9; 
Grantees receiving more than $250,000: Number: 154; 
Grantees receiving more than $250,000: Percentage: 87.5. 

Neither positive or negative: 
Grantees receiving less than $250,000: Number: 1; 
Grantees receiving less than $250,000: Percentage: 2.1; 
Grantees receiving more than $250,000: Number: 14; 
Grantees receiving more than $250,000: Percentage: 8.0. 

Very or generally negative: 
Grantees receiving less than $250,000: Number: 0; 
Grantees receiving less than $250,000: Percentage: 0; 
Grantees receiving more than $250,000: Number: 8; 
Grantees receiving more than $250,000: Percentage: 4.5. 

Total: 
Grantees receiving less than $250,000: Number: 47; 
Grantees receiving less than $250,000: Percentage: 100; 
Grantees receiving more than $250,000: Number: 176; 
Grantees receiving more than $250,000: Percentage: 100. 

Source: GAO survey of NAHASDA grantees. 

Note: Results shown exclude seven responses of "don't know or no 
opinion" and two "not checked" responses. 

[End of table] 

We asked survey respondents to provide explanations to support their 
overall views of NAHASDA, and most that viewed NAHASDA positively 
wrote that the program helps them meet their overall affordable 
housing needs. However, of those that provided more specific reasons 
for NAHASDA's positive impact, most respondents mentioned that the 
program has been effective because it allows the grantee to: 

* target specific housing needs for their tribe, such as increasing 
energy efficiency in affordable units (56 responses); 

* exercise self-determination and program flexibility (19 responses); 
and: 

* leverage their NAHASDA grant with funding from other sources (10 
responses). 

We also surveyed grantees on the extent to which they thought NAHASDA 
was effective at meeting certain programmatic goals. We found that 
survey respondents viewed NAHASDA as very effective at improving 
housing conditions and increasing access to affordable rental housing 
and homeownership, but less effective at developing housing finance 
mechanisms and increasing economic development on Indian lands (see 
figure 11).[Footnote 24] 

Figure 11: Grantees View NAHASDA as Most Effective at Improving 
Housing Conditions for Low-Income Native Americans: 

[Refer to PDF for image: horizontal bar graph] 

Improving housing conditions for low-income tribal members: 
Effectiveness of NAHASDA: 
Very to extremely: 54.3%; 
Somewhat to moderately: 39.2%; 
Slightly or not: 4.3%. 

Increasing access to affordable rental housing: 
Effectiveness of NAHASDA: 
Very to extremely: 44.4%; 
Somewhat to moderately: 36.2%; 
Slightly or not: 13.8%. 

Increasing access to affordable homeownership: 
Effectiveness of NAHASDA: 
Very to extremely: 45.3%; 
Somewhat to moderately: 34.9%; 
Slightly or not: 15.1%. 

Developing private housing finance mechanisms: 
Effectiveness of NAHASDA: 
Very to extremely: 20.3%; 
Somewhat to moderately: 36.2%; 
Slightly or not: 25.9%. 

Increasing economic development activities, such as providing jobs for 
tribal members: 
Effectiveness of NAHASDA: 
Very to extremely: 24.1%; 
Somewhat to moderately: 47.4%; 
Slightly or not: 20.7%. 

Source: GAO survey of NAHASDA grantees. 

Note: Of the 232 respondents, 221 provided views on NAHASDA and 11 
either did not provide their opinion or checked "don't know." 
Percentages show the portion of the total survey responses. 

[End of figure] 

One survey respondent primarily operating in an urban area wrote that 
under NAHASDA, they have been able to develop mixed-use housing in 
their region and have been able to supplement the housing they provide 
with social support services. Similarly, another survey respondent 
wrote that under NAHASDA, they have been able to maintain existing 
housing units and provide financial literacy training to the community 
as well as counseling to aid prospective homeowners in the tribe. 

We asked survey respondents to compare their experiences under NAHASDA 
with experiences under the 1937 Act housing programs it replaced in 
1998. Of the 138 respondents that checked that they had participated 
in the 1937 Act programs, 102 grantees--or about 74 percent--reported 
that NAHASDA is an improvement over the programs it replaced. Of those 
that viewed NAHASDA as an improvement, about half--53 out of 102--
checked that NAHASDA was much better. Only 17 reported that NAHASDA 
was worse or much worse than the 1937 Act programs it replaced (see 
table 6). 

Table 6: Survey Respondents' Views on NAHASDA Compared with 1937 Act 
Housing Programs: 

Much better: 
Number of responses: 53; 
Percentage of those that answered the question: 38.4. 

Better: 
Number of responses: 49; 
Percentage of those that answered the question: 35.5. 

About the same: 
Number of responses: 19; 
Percentage of those that answered the question: 13.8. 

Worse: 
Number of responses: 15; 
Percentage of those that answered the question: 10.9. 

Much worse: 
Number of responses: 2; 
Percentage of those that answered the question: 1.4. 

Total: 
Number of responses: 138; 
Percentage of those that answered the question: 100.0. 

Source: GAO survey of NAHASDA grantees. 

Note: Results shown exclude seven responses of "don't know or no 
opinion" and two "not checked" responses. Percentages show the portion 
of those respondents that provided views on NAHASDA. 

[End of table] 

The grantees we interviewed also viewed NAHASDA as an improvement over 
1937 Act housing programs, and all of them identified self- 
determination as the main reason. For example, one grantee we 
interviewed said that because of the flexibility afforded by NAHASDA, 
their tribe was able to buy housing units in urban areas rather than 
on their reservation and rent the units to low-income members. This 
grantee explained that they intended to provide housing in locations 
that had more opportunities for employment so that program 
beneficiaries could become increasingly self-sufficient. 

Self-determination was also the most common reason that survey 
respondents favored NAHASDA over the previous housing programs. The 
102 survey respondents reporting that NAHASDA was better or much 
better provided 85 written reasons for their answers. We analyzed 
their responses and found that the largest group--65 responses--said 
that NAHASDA was an improvement because it provided for tribal self- 
determination. For example, one survey respondent wrote that each 
tribe has unique housing needs influenced by their specific cultures, 
economic conditions, and physical environments and that NAHASDA has 
been a drastic improvement because it allows tribes the flexibility to 
meet those needs. Another respondent wrote that although the funding 
levels have effectively dropped with NAHASDA, the program has allowed 
tribes to be more flexible with how they spend the grant, allowing for 
a more effective use of the limited funding. For those survey 
respondents that provided explanations on how NAHASDA was worse or 
much worse than the programs it replaced, the main reasons provided 
were: 

* NAHASDA provides less funding than previous programs (six responses): 

* NAHASDA is a block grant, which does not reward those tribes that 
have the capacity to apply for and win competitive housing grants 
(five responses); and: 

* NAHASDA has too many administrative and regulatory requirements 
(five responses). 

Tribes Recommended Loosening Administrative Burdens to Improve the 
Program and Reported Limitations in the NAHASDA Grant Allocation 
Formula as a Major Challenge: 

Respondents to our survey provided a total of 133 distinct 
recommendations on how to improve NAHASDA, and most of the respondents 
wrote that certain administrative rules and obligations were too 
onerous (see table 7). Most commonly, those respondents cited 
mandatory environmental reviews as overly cumbersome. Others noted 
certain administrative restrictions on their funds; for example, some 
said that the cap on the portion of the grant they can use for 
administrative expenses was arbitrary and limited their administrative 
capacity.[Footnote 25] Specifically, one respondent wrote that 
determining the amount spent on administrative costs should be up to 
each tribe so that tribes can manage their own programs as they see 
fit. 

Table 7: Most Frequent Suggestions on How NAHASDA Could be Improved: 

How NAHASDA could be improved: Minimize regulatory requirements; 
Number of such recommendations: 32. 

How NAHASDA could be improved: Provide more training for grantees; 
Number of such recommendations: 22. 

How NAHASDA could be improved: Ensure that HUD staff is trained and 
more responsive; 
Number of such recommendations: 21. 

How NAHASDA could be improved: Revise HUD's reporting requirements; 
Number of such recommendations: 19. 

How NAHASDA could be improved: Revise the allocation formula; 
Number of such recommendations: 18. 

How NAHASDA could be improved: Appropriate more funds; 
Number of such recommendations: 12. 

How NAHASDA could be improved: Provide funds more quickly; 
Number of such recommendations: 9. 

Source: GAO survey of NAHASDA grantees. 

Note: Survey respondents--111 total--provided various suggestions on 
improving NAHASDA. Of those that we were able to categorize, we 
identified 133 distinct recommendations primarily because some 
respondents provided more than one suggestion. 

[End of table] 

Grantees we interviewed identified limitations in the grant allocation 
formula as a particular challenge with the IHBG program. They told us 
that they believe the allocation formula is either based on inaccurate 
data (for example, enrollment numbers or area construction costs) or 
does not consider certain key factors, such as a lack of land to 
develop housing. In calculating a grantee's annual allocation, the 
formula considers such factors as fair market rent and total 
development cost for a grantee's local area. However, the formula does 
not take into account whether a tribe has buildable land to use for 
housing development in the calculation of total development cost or as 
a separate factor.[Footnote 26] The housing director of one small 
grantee we visited that did not own trust land reported that they had 
to first allocate grant funds to purchase land for any new 
development. Similarly, of the 201 survey respondents that provided an 
opinion specifically on the grant allocation formula, 159 grantees--or 
nearly 80 percent--said the formula could be improved. And, of those 
survey respondents that checked certain problems with utilizing 
NAHASDA, 46 percent of respondents said that the formula is based on 
inaccurate data, and 64 percent said that it does not consider certain 
factors such as properly accounting for construction costs or the cost 
of purchasing land for development. Survey respondents provided a 
total of 159 suggestions on how the IHBG allocation formula could be 
improved, and most recommended that the demographic data used in 
determining the need portion of the grant be updated (see table 8). 
For example, multiple survey respondents said that U.S. Census figures 
do not accurately reflect the population for which they provide 
housing services. 

Two of the grantees we interviewed and some survey respondents also 
said that the IHBG operation and maintenance subsidy that currently 
supports 1937 Act units should extend to NAHASDA-funded units. During 
our visit with one of the grantees we interviewed, the housing 
director explained that because their NAHASDA units are low-income, 
the tribe would likely need assistance with upkeep to ensure that they 
maintain their value.[Footnote 27] 

In addition, several of the 12 grantees we interviewed stated that the 
minimum IHBG grant of around $50,000 per year is insufficient for 
those who receive it to pursue any significant housing activities, 
especially new housing development. Some survey respondents provided 
similar comments about the minimum grant amount. Moreover, ONAP 
officials in all six regions stated that grantees receiving lesser 
grants, including the minimum, are limited in their ability to address 
their affordable housing needs. 

Table 8: Survey Respondents' Suggestions on How the IHBG Allocation 
Formula Could Be Improved: 

How the IHBG formula could be improved: Improve the demographic data 
used; 
Number of such recommendations: 38. 

How the IHBG formula could be improved: Increase the minimum grant; 
Number of such recommendations: 24. 

How the IHBG formula could be improved: Revisit the definition of the 
formula area; 
Number of such recommendations: 19. 

How the IHBG formula could be improved: Increase funding; 
Number of such recommendations: 20. 

How the IHBG formula could be improved: Incorporate certain ongoing 
costs, such as unit maintenance; 
Number of such recommendations: 23. 

How the IHBG formula could be improved: Incorporate certain regional 
costs, such as construction costs; 
Number of such recommendations: 19. 

How the IHBG formula could be improved: Other suggestions; 
Number of such recommendations: 16. 

Source: GAO survey of NAHASDA grantees. 

[End of table] 

However, ONAP headquarters officials explained that tribes participate 
in developing regulations for the grant allocation formula, including 
establishing a minimum grant amount, through negotiated rulemaking 
with HUD. They informed us that the negotiated rulemaking committee 
will be convened in March 2010 to determine regulations that implement 
October 2008 statutory changes to NAHASDA. They also confirmed that 
the May 2012 committee agenda will include reviewing the allocation 
formula. 

Almost Half of the Grantees We Surveyed Use IHBG Funds for 
Infrastructure Development, but HUD Does Not Collect Grantees' Plans 
or Monitor Their Investments in Housing-Related Infrastructure: 

Of the 232 NAHASDA grantees responding to our survey, 70 percent 
viewed investment in housing-related infrastructure--such as 
connecting a home to a local water supply--as a great housing need, 
but slightly less than half indicated that they use IHBG funds to 
develop infrastructure (see figure 12). Additionally, we found that 
HUD does not collect grantees' infrastructure plans or measure their 
investments in infrastructure for affordable homes funded by the IHBG 
program. According to data from the Department of Health and Human 
Services' Indian Health Service (IHS), there is an acute need for 
sanitation-related infrastructure for Indian housing in general, and 
our survey indicates a significant need for adequate sanitation 
infrastructure for homes funded by HUD programs. Some IHS officials 
also told us that they have found instances where HUD homes were built 
with insufficient planning, taxing existing water supplies and 
wastewater systems. Although HUD does not collect information on the 
sanitation infrastructure needs for HUD homes, IHS does collect such 
information and, according to IHS officials, can make it available to 
HUD under a 2007 memorandum of understanding between the agencies. 

Figure 12: Housing-Related Infrastructure: 

[Refer to PDF for image: illustration] 

The following items are identified in the illustration: 

Access; 
Communications; 
Community-level; 
Electricity; 
Heat; 
Sanitation; 
Water; 
Gas line; 
Well; 
Septic tank; 
Underground sewer system pipe. 

Source: GAO and Art Explosion (images). 

[End of figure] 

Seventy Percent of Survey Respondents Viewed Housing-Related 
Infrastructure as a Great Need, but Only About Half Report Using IHBG 
Funds to Help Meet that Need: 

Out of 232 NAHASDA grantees that responded to our survey, 85 percent 
(198 grantees) reported that developing infrastructure, such as 
providing homes with access to drinking water, was a continuing need 
for their tribe. And, 70 percent (164 grantees) said that developing 
infrastructure was a great or very great need. Additionally, grantees 
that responded to our survey ranked adding or updating housing-related 
infrastructure 4th out of 13 greatest continuing housing needs, after 
constructing new units, rehabilitating existing units, and operating 
and maintaining units (see figure 13). 

Figure 13: Survey Respondents' Rankings of Their Greatest Continuing 
Housing Needs, by Percentage: 

[Refer to PDF for image: horizontal bar graph] 

Constructing new units: 79.3%; 
Rehabilitating existing units: 49.1%; 
Operating and maintaining units: 40.9%; 
Adding or updating infrastructure: 27.6%; 
Purchasing land for housing: 26.3%; 
Addressing overcrowding: 16.8%; 
Increasing energy efficiency: 15.9%; 
Providing rental assistance: 15.5%; 
Increasing homeownership: 13.8%; 
Providing downpayment assistance: 9.9%; 
Addressing homelessness: 6.9%; 
Providing housing services to members outside the tribal area: 6.0%; 
Crime prevention and safety: 6.0%. 

Source: GAO survey of NAHASDA grantees. 

Note: Percentages indicate the portion of survey respondents that 
ranked a particular need in their top three continuing housing needs. 
Results do not include 4.3 percent of respondents that reported "other 
continuing housing needs." 

[End of figure] 

Despite this demonstrated need for infrastructure development, 
slightly less than half of the survey respondents--98 of the 222 who 
responded to this question--reported that they actually use their IHBG 
grant for infrastructure development (see figure 14). Some of the 
grantees that responded to our survey explained that they have a 
pronounced need for infrastructure development and that they often do 
not receive enough funding to address infrastructure with the IHBG 
program. Of those grantees that we spoke with, smaller grantees were 
less likely to use the IHBG program for infrastructure, either because 
they do not receive enough funding to address their needs or because 
they provide assistance to persons living in units that are on a city-
or county-funded infrastructure system. Indeed, the results of our 
survey show that, of the grantees receiving a large grant, twice as 
many used IHBG funds for infrastructure development as those receiving 
a small grant. 

Figure 14: Survey Respondents' Use of the IHBG Program for 
Infrastructure Development, by Fiscal Year 2008 Grant Size: 

[Refer to PDF for image: 2 pie-charts] 

Grantees receiving less than $250,000: 28%; 
14 out of 50 grantees. 

Grantees receiving more than $250,000: 48.8%; 
84 out of 172 grantees. 

Total: 44.1%; 
98 out of 222 grantees. 

Source: GAO survey of NAHASDA grantees. 

[End of figure] 

Officials in four of the six regional ONAP offices, as well as half of 
the IHS field directors that we spoke with, said that because of the 
need for affordable housing for most tribes, tribal housing 
departments may be providing housing units without adequate 
infrastructure to support those units. Although the grantees we 
interviewed did not say that they built homes with inadequate 
infrastructure, six said that they use or intend to use other programs 
to help meet their infrastructure needs. 

NAHASDA emphasizes tribal self-determination by providing a 
noncompetitive block grant to tribes, but survey respondents that 
provided views on problems with the program said that the greatest 
problem--out of a list of six most common problems--is a lack of 
funding specifically for housing-related infrastructure (see figure 
15).[Footnote 28] 

Figure 15: Survey Respondents' Views on Problems with NAHASDA Ranked 
by Number of Responses: 

[Refer to PDF for image: horizontal bar graph] 

Lack of funding specifically for housing-related infrastructure: 122; 
Allocation formula does not consider certain key factors: 88; 
Administrative costs of operating the program are high: 86; 
Program regulations do not allow us to address certain housing needs: 
73; 
Grant allocation formula is based on inaccurate data: 58; 
Agency delays in disbursing grant funds: 48. 

Source: GAO survey of NAHASDA grantees. 

[End of figure] 

Housing-related infrastructure development is an affordable housing 
activity under NAHASDA. ONAP officials, especially those in the 
regional offices, said that prior to NAHASDA, they worked with IHS to 
identify all infrastructure needs for housing developments funded by 
HUD. Under NAHASDA, however, tribes have the flexibility to determine 
the uses of their funding within the scope of eligible activities, 
including the extent to which they want to use the IHBG program for 
infrastructure development. 

Instead of using the IHBG program, survey respondents reported that 
they were more likely to fund their infrastructure development using 
other funding sources (see table 9). Although some tribes rely on 
other programs to help fund their infrastructure development, our 
interviews with grantees and findings from a 2003 NAIHC study indicate 
that non-IHBG programs for infrastructure development--such as 
programs administered by the Environmental Protection Agency, HUD, and 
USDA--have characteristics that present challenges to some tribes. 
[Footnote 29] For example, while the study found that the ICDBG 
program was a sought-after program for IHBG grantees to fund 
infrastructure projects, it was only available to tribes that have the 
administrative capacity to meet the application requirements. 
Furthermore, our analysis found that the ICDBG program is consistently 
funded at about one-tenth the level of the IHBG program, making it 
much smaller. In addition, since IHS is statutorily prohibited from 
funding sanitation facility construction projects for IHBG-funded 
units, some survey respondents and grantees we spoke with said that 
they were disappointed that IHS would not provide the sanitation 
infrastructure support without reimbursement from the tribe.[Footnote 
30] 

Table 9: Survey Respondents' Use of Various Programs to Develop 
Housing-Related Infrastructure: 

Programs available to tribes to develop housing-related 
infrastructure: IHS programs; 
Number of respondents that reported using program(s): 155; 
Percentage of all responding: 66.8. 

Programs available to tribes to develop housing-related 
infrastructure: HUD's ICDBG program; 
Number of respondents that reported using program(s): 118; 
Percentage of all responding: 50.9. 

Programs available to tribes to develop housing-related 
infrastructure: Bureau of Indian Affairs programs; 
Number of respondents that reported using program(s): 109; 
Percentage of all responding: 47.0. 

Programs available to tribes to develop housing-related 
infrastructure: IHBG program (NAHASDA); 
Number of respondents that reported using program(s): 98; 
Percentage of all responding: 44.1. 

Programs available to tribes to develop housing-related 
infrastructure: State and local government programs; 
Number of respondents that reported using program(s): 69; 
Percentage of all responding: 29.7. 

Programs available to tribes to develop housing-related 
infrastructure: USDA programs; 
Number of respondents that reported using program(s): 61; 
Percentage of all responding: 26.3. 

Programs available to tribes to develop housing-related 
infrastructure: Other sources of funds, including nongovernmental 
sources; 
Number of respondents that reported using program(s): 40; 
Percentage of all responding: 20.7. 

Source: GAO survey of NAHASDA grantees. 

Note: Respondents could select more than one source of funding. 

[End of table] 

HUD Does Not Collect Information on Grantees' Infrastructure Needs or 
the Amounts Grantees Invest in Housing-Related Infrastructure 
Development: 

HUD's primary tools for monitoring grantees' uses of IHBG funds are 
the IHP and the APR. In our review of the IHP, which describes 
grantees' plans for the coming year, we found that it does not provide 
a means for HUD to systematically collect information from grantees on 
both their housing-related infrastructure needs and their plans to 
address those needs, including infrastructure for new housing 
construction. The IHP collects information on some of grantees' 
estimated housing needs, such as the number of families who need 
housing because they are living in overcrowded conditions. The IHP 
also collects information on grantees' plans to address those stated 
needs, such as by constructing new housing to alleviate the 
overcrowded conditions. However, although it does cover many important 
housing-related activities the IHP does not require grantees to 
describe how they intend to address any existing infrastructure 
deficiencies, such as a home with inadequate access to potable water. 
In addition, the IHP does not require grantees to describe what 
infrastructure development a new construction project will require and 
how that infrastructure will be funded. 

The APR, which describes grantees' accomplishments during the past 
year, provides grantees the opportunity to report how they are 
carrying out the plans and addressing the housing needs outlined in 
the IHP. In our review of the APR, we found that because it is based 
on activities described in the IHP, it also lacks an assessment of how 
a tribe is meeting the infrastructure needs of its low-income members. 
HUD officials we spoke with confirmed that the APR does not track 
grantees' infrastructure investments. Although the IHP and the APR 
allow grantees to describe any needs and plans--including those for 
infrastructure development--in a narrative format, we learned that 
those narratives are not included in ONAP's reporting system, which 
means that these components are not used in HUD's overall reports to 
Congress. Further, one grantee that we spoke with said that they do 
not believe HUD officials actually review the narratives or track them 
so they do not take the time to list activities that are not measured, 
such as infrastructure-related needs and plans. 

As previously noted, HUD is planning to combine the IHP and the APR by 
fiscal year 2011. We reviewed a draft of this document and found that 
while it does a better job of tracking grantees' uses of NAHASDA 
funds, from identifying affordable housing needs to assessing the 
impact of completed housing development, it does not systematically 
assess grantees' needs, plans, or investments related to 
infrastructure development. Because grantees are not required to 
report on or to quantify their need for and investments in 
infrastructure, HUD may lack the information necessary to assess the 
extent to which NAHASDA is meeting its statutory objectives of 
improving the health and safety of low-income Native Americans and 
integrating infrastructure resources to support housing development. 

The Indian Health Service Has Found That Inadequate Sanitation 
Infrastructure Is an Acute Problem for Native Americans, but HUD Has 
Not Used Health Service Data to Help Inform IHBG Grantees of Any 
Identified Deficiencies: 

Of the 98 survey respondents that reported using IHBG funds for 
infrastructure, the majority reported using the IHBG program to 
provide access to clean water and to provide for wastewater removal 
(see figure 16). Similarly, grantees that we spoke with, and some 
responding to our survey, explained that sanitation infrastructure, 
such as providing access to clean drinking water and providing for the 
safe, reliable removal of wastewater, was an important type of 
infrastructure for low-income housing. According to IHS, access to 
adequate sanitation facilities is a vital public health issue for 
Native Americans. Adequate access to safe drinking water helps to stem 
the spread of disease, and proper wastewater removal systems help 
reduce the incidence of bacteria, viruses, and parasites that cause 
communicable diseases like typhoid and hepatitis A. 

Figure 16: Types of Infrastructure for Which Survey Respondents 
Reported Using IHBG Funds: 

[Refer to PDF for image: horizontal bar graph] 

Water systems: 
Percentage that used IHBG funds for each type of infrastructure: 34.1%; 
Number of respondents: 79. 

Wastewater systems: 
Percentage that used IHBG funds for each type of infrastructure: 30.2%; 
Number of respondents: 70. 

Roads: 
Percentage that used IHBG funds for each type of infrastructure: 25.4%; 
Number of respondents: 59. 

Electrical systems: 
Percentage that used IHBG funds for each type of infrastructure: 22.0%; 
Number of respondents: 51. 

Telephone lines: 
Percentage that used IHBG funds for each type of infrastructure: 16.8%; 
Number of respondents: 39%. 

Gas/propane lines: 
Percentage that used IHBG funds for each type of infrastructure: 13.8%; 
Number of respondents: 32. 

Source: GAO survey of NAHASDA grantees. 

Note: This graphic does not include those respondents that reported 
using the IHBG for "other infrastructure," which amounted to 15 
responses, or 6.5 percent of the total. 

[End of figure] 

Government data sources show that there is still an acute need for 
adequate sanitation infrastructure on Indian lands. The U.S. Census 
estimated that in 2008 Native American households were five times as 
likely to have incomplete plumbing as the rest of the population. And, 
according to a March 2008 draft report issued by an interagency 
infrastructure task force written pursuant to the United Nation's 
Millennium Challenge Goals, approximately 43,800 housing units 
occupied by Native Americans--or about 13 percent of Native American 
homes--had inadequate access to safe drinking water and wastewater 
disposal systems in 2007. [Footnote 31] 

The report noted a slight improvement since the benchmark year, 2003, 
when there were 44,234 homes with inadequate infrastructure. However, 
it concluded that this rate of decrease was not sufficient to meet the 
U.S. government's goal of reducing the number of Native American homes 
with inadequate sanitation facilities to half of the 2003 figure by 
2015. HUD officials we spoke with told us that they joined this task 
force at its inception in 2003 and signed a memorandum of 
understanding with the other members of the task force, including IHS, 
to facilitate interagency coordination to meet the United Nations goal. 

The data used in the report were collected by IHS's Sanitation 
Tracking and Reporting System, a database that tracks reported 
sanitation deficiencies for most Native American communities. Although 
IHS is statutorily precluded from funding sanitation construction 
services for HUD homes, IHS is authorized to and actively collects 
data on the infrastructure needs for those homes as long as the data 
are reported by their tribal counterparts. IHS officials we spoke with 
in headquarters and five of the ten officials we contacted in field 
offices said that they have found instances where tribes in their 
region have built homes using NAHASDA funding with inadequate planning 
for sanitation infrastructure. For example, one official told us that 
his field office has been contacted by individual tribal members about 
NAHASDA homes with inadequate sewer lines or inadequate drains. He 
added that, in general, tribal housing departments may feel pressure 
from their community to maximize the number of housing units produced 
and that this pressure may lead to more units being built at the 
expense of adequate infrastructure for the units. The other five field 
directors said that they have not seen tribes build NAHASDA homes with 
inadequate infrastructure, but three of these five acknowledged that 
NAHASDA homes could be stretching existing infrastructure facilities 
in certain communities. For example, one director told us that because 
NAHASDA homes are often built within existing housing developments, as 
tribes add homes to existing communities, the communities' underlying 
sanitation infrastructure may increasingly be burdened with those 
homes. 

HUD officials we spoke with said that they also do not have the data 
necessary to measure the extent to which HUD-funded homes need updated 
infrastructure investment. However, according to IHS officials, HUD 
can access IHS's sanitation deficiency database pursuant to a 2007 
memorandum of understanding that specifically authorizes data sharing 
between IHS, HUD, and other agencies. 

Conclusions: 

Native American tribes generally have a positive view of NAHASDA, and 
most see it as an improvement over the housing programs previously 
available to them, in large part because of NAHASDA's emphasis on self-
determination for the tribes. However, small grantees that receive 
lesser grants reported facing challenges in building new housing and 
in trying to leverage their grant funds to secure additional funding 
for affordable housing activities. Reporting on NAHASDA 
accomplishments is currently limited primarily to building, acquiring, 
and rehabilitating housing units, despite the fact that many tribes 
use NAHASDA funds for other eligible purposes. Because of this 
limitation in reporting, HUD has not collected a full set of data on 
NAHASDA. As a result, Congress has not had a complete picture of the 
program's accomplishments. However, the revisions HUD plans to make to 
the Indian Housing Plan (IHP) and Annual Performance Report (APR) 
should address some reporting limitations, which should help efforts 
to assess the impact of NAHASDA on low-income Native Americans. 

NAHASDA also has helped some tribes with infrastructure development, 
but infrastructure continues to be a pressing need for many tribes, 
particularly in the area of sanitation. HUD does not currently collect 
grantees' assessments of their housing-related infrastructure needs or 
data on how they use grant funds to address those needs, and planned 
revisions to the IHP and APR do not address reporting on 
infrastructure. As a result, additional opportunities exist for HUD to 
collect such information, which would allow it to track grantees' 
efforts to address a key need in their communities and would broaden 
the scope of accomplishment data that HUD can report to Congress. 

Furthermore, comprehensive data on tribes' infrastructure needs as 
they pertain to sanitation facilities are already collected by IHS and 
are available to HUD under an interagency memorandum of understanding. 
If HUD were to obtain this data and share it with grantees, the data 
could help tribes identify any unmet sanitation needs that they might 
include in their reporting and address with their NAHASDA grants. 

Recommendations for Executive Action: 

To better assess the extent to which NAHASDA is meeting its objectives 
of providing safe and healthy homes and coordinating infrastructure 
with housing development for low-income Native Americans, we recommend 
that HUD's Office of Native American Programs ensure that its revised 
Indian Housing Plan and Annual Performance Report: 

* capture data on tribes' infrastructure-related needs; 

* capture tribes' plans for addressing their identified infrastructure 
needs; 

* measure the extent to which NAHASDA grantees are using IHBG funds 
and Title VI loan guarantees for housing-related infrastructure 
development; and: 

* assess the effectiveness of infrastructure development in meeting 
the needs of low-income Native Americans, such as by measuring the 
number of low-income Native Americans that have better access to 
drinking water or a safe heat source. 

To help grantees identify their existing sanitation infrastructure 
needs, we recommend that HUD provide them with sanitation deficiency 
data obtained from IHS on homes in the grantees' service area-- 
particularly for those homes that are statutorily precluded from 
receiving IHS-funded sanitation construction services. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to HUD for review and comment. 
HUD's Deputy Assistant Secretary for Native American Programs provided 
written comments that are discussed below and presented in Appendix IV. 

HUD stated that our report is generally positive and would be a very 
useful document. HUD also requested that we change the report title to 
reflect only the generally positive view of the Indian Housing Block 
Grant (IHBG) program under NAHASDA. However, we thought it necessary 
to include language on an issue for which the report makes 
recommendations to HUD. 

HUD also agreed with our conclusions and recommendations, noting that 
while there have been improvements, our conclusion that there is still 
a significant need for adequate infrastructure to support Indian 
housing is accurate. Additionally, HUD stated, and we agree, that HUD 
and the Indian Health Service (IHS) should continue to work together 
to address these problems. As indicated in our conclusions and 
recommendations, we believe that HUD's inclusion of infrastructure 
needs and investments in program reporting and its use of IHS data on 
sanitation deficiencies in Indian country should benefit Native 
American tribes participating in the IHBG program and capture 
additional program results for HUD and Congress. HUD noted that 
allowing tribes to use their IHBG funds to leverage IHS resources 
would improve their ability to address infrastructure deficiencies. In 
our report, we highlight that leveraging IHBG funds with funds from 
other sources has benefited tribes, and that many tribes view 
leveraging as a practical approach to adequately funding their 
communities' affordable housing needs. 

We are sending copies of this report to the Secretary of Housing and 
Urban Development and other interested parties. The report is also 
available at no charge on the GAO Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staffs have any questions about this report, please 
contact me at (202) 512-8678 or shearw@gao.gov. Contact points for our 
Office of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made major contributions 
to this report are listed in Appendix V. 

Signed by: 

William B. Shear: 
Director, Financial Markets and Community Investment: 

[End of section] 

Appendix I: Scope and Methodology: 

Our objectives were to evaluate (1) how Native American Housing 
Assistance and Self-Determination Act of 1996 (NAHASDA) program funds 
have allowed Native American tribes to address their affordable 
housing needs; (2) how, if at all, NAHASDA has improved the process of 
providing Native American tribes with access to federal funds to meet 
their affordable housing needs; and (3) the extent to which NAHASDA 
funding has contributed to infrastructure improvements in Native 
American communities. 

To address all three objectives, we reviewed NAHASDA's legislative 
history and the Department of Housing and Urban Development's (HUD) 
policies and procedures for administering the program. We interviewed 
officials in HUD's Office of Native American Programs (ONAP) 
headquarters and in all six regional ONAP offices. We reviewed 
previous congressional reports and testimonies, our previous reports, 
a 2007 Office of Management and Budget Program Assessment Rating Tool 
report on the Indian Housing Block Grant (IHBG) program, and a 2009 
independent study of the IHBG program contracted by HUD. To obtain 
information on grantees' experiences with the program, we developed a 
sample of 12 grantees--2 in each ONAP region--of various sizes. We 
reviewed HUD's annual IHBG allocation reports for fiscal years 1998 
through 2008, which include data on each tribe's American Indian and 
Alaska Native population, reported enrollment, criteria that HUD uses 
to determine the IHBG allocation, and the grant amount. Though 
grantees may be individual tribes or their tribally designated housing 
entities (TDHE), HUD makes an allocation to each tribe. To help us 
evaluate the program's effectiveness in meeting the affordable housing 
needs of tribes of various sizes, we further analyzed the fiscal year 
2008 allocation report by ONAP region to determine which grantees in 
each region could be identified as large or small based on population 
and enrollment--or as receiving a large or small grant--when compared 
with other grantees in the same region. In our analysis, we found that 
small and large grantees, based on population and grant size, were not 
always similar among the six ONAP regions. Because tribal populations 
vary across regions and grant size is largely based on population 
factors, small and large designations within regions also were 
relative to other grantees in each region. For the purposes of our 
review, we generally considered annual grants less than $250,000 to be 
lesser grants and the grantees receiving those grants to be small 
grantees. We chose to interview a range of grantees and, for each 
region, we interviewed two grantees whose population and grant size 
varied widely (see table 10). In making a final sample selection, we 
solicited input from the relevant oversight ONAP office on grantee 
participation, performance, and accessibility. We interviewed grantees 
either onsite or by telephone. To obtain a wider range of grantee 
perspectives, we also administered a Web-based survey to all grantees 
that received funding in fiscal year 2008, obtaining a 66 percent 
response rate. Additionally, we met with officials from groups 
representing Native American housing interests: the National American 
Indian Housing Council (NAIHC), a nonprofit organization that 
represents the interests of American Indians, Alaska Natives, and 
Native Hawaiians in providing affordable housing; and Cherokee 
Freedmen representatives, who advocate for housing and other benefits 
for the Cherokee Freedmen. Appendix III contains a brief history of 
the Cherokee Freedmen and information pertaining to the Cherokee 
Nation's provision of housing assistance to Cherokee Freedmen members. 
Finally, we interviewed officials at the Indian Health Service (IHS), 
Bureau of Indian Affairs (BIA), and U.S. Department of Agriculture 
(USDA) Rural Development because those agencies also provide 
assistance to Native American communities. 

Table 10: Location and Other Characteristics of NAHASDA Grantees 
Selected for Site Visits and Telephone Interviews: 

HUD ONAP region: Alaska; 
Grantee's location: Alaska; 
2008 American Indian and Alaska Native (AI/AN) population: 33,004[A]; 
2008 Tribal enrollment: 7,433; 
Fiscal year 2008 IHBG allocation: $13,383,003. 

HUD ONAP region: Alaska; 
Grantee's location: Alaska; 
2008 American Indian and Alaska Native (AI/AN) population: 958; 
2008 Tribal enrollment: 592; 
Fiscal year 2008 IHBG allocation: $301,873. 

HUD ONAP region: Eastern Woodlands; 
Grantee's location: Michigan; 
2008 American Indian and Alaska Native (AI/AN) population: 588; 
2008 Tribal enrollment: 294; 
Fiscal year 2008 IHBG allocation: $125,437. 

HUD ONAP region: Eastern Woodlands; 
Grantee's location: Wisconsin; 
2008 American Indian and Alaska Native (AI/AN) population: 11,157; 
2008 Tribal enrollment: 14,745; 
Fiscal year 2008 IHBG allocation: $3,465,919. 

HUD ONAP region: Southern Plains; 
Grantee's location: Oklahoma; 
2008 American Indian and Alaska Native (AI/AN) population: 2,793; 
2008 Tribal enrollment: 3,196; 
Fiscal year 2008 IHBG allocation: $500,088. 

HUD ONAP region: Southern Plains; 
Grantee's location: Oklahoma; 
2008 American Indian and Alaska Native (AI/AN) population: 118,059; 
2008 Tribal enrollment: 241,226; 
Fiscal year 2008 IHBG allocation: $27,605,755. 

HUD ONAP region: Southwest; 
Grantee's location: Arizona; 
2008 American Indian and Alaska Native (AI/AN) population: 189,314; 
2008 Tribal enrollment: 268,004; 
Fiscal year 2008 IHBG allocation: $74,025,827. 

HUD ONAP region: Southwest; 
Grantee's location: California; 
2008 American Indian and Alaska Native (AI/AN) population: 65; 
2008 Tribal enrollment: 214; 
Fiscal year 2008 IHBG allocation: $48,660. 

HUD ONAP region: Northwest; 
Grantee's location: Washington; 
2008 American Indian and Alaska Native (AI/AN) population: 200; 
2008 Tribal enrollment: 377; 
Fiscal year 2008 IHBG allocation: $137,663. 

HUD ONAP region: Northwest; 
Grantee's location: Washington; 
2008 American Indian and Alaska Native (AI/AN) population: 8,192; 
2008 Tribal enrollment: 4,096; 
Fiscal year 2008 IHBG allocation: $2,911,842. 

HUD ONAP region: Northern Plains; 
Grantee's location: Montana; 
2008 American Indian and Alaska Native (AI/AN) population: 7,905; 
2008 Tribal enrollment: 6,970; 
Fiscal year 2008 IHBG allocation: $4,109,638. 

HUD ONAP region: Northern Plains;
Grantee's location: Utah; 
2008 American Indian and Alaska Native (AI/AN) population: 725; 
2008 Tribal enrollment: 437; 
Fiscal year 2008 IHBG allocation: $182,343. 

Source: GAO analysis of HUD data. 

Note: The AI/AN population data is based on 2000 U.S. Census data for 
all AI/AN households within a tribe's formula (geographic) area while 
enrollment is based on tribal data for members enrolled. 

[A] This grantee is a regional housing entity serving several tribes. 

[End of table] 

Survey Administration: 

We initially contacted 351 tribes or TDHEs who were recipients of 2008 
NAHASDA grants.[Footnote 32] We sent initial notifications and the 
survey by e-mail to most grantees. A small number of grantees did not 
have e-mail accounts, and we contacted them by telephone and sent them 
the survey by fax. To encourage responses, we followed up with four e- 
mails that included a link to the survey. Additionally, to try and 
increase the response rate, we contacted those grantees who had not 
responded to the e-mailed survey by telephone. We also contacted some 
respondents by telephone to clarify unclear responses. We received 
responses from 232 grantees, or a 66 percent response rate. Grantees 
responding to the survey represented 413 of the 535 tribes (77 
percent) nationwide that benefited from NAHASDA grants in 2008. 

To pretest the questionnaire, we conducted cognitive interviews and 
held debriefing sessions with five NAHASDA grantees; two pretests were 
conducted in person and three were conducted by telephone. Pretest 
participants were selected to represent a variety of grantee sizes (as 
represented by dollar amount of the grants); whether they represented 
a tribe, single-tribe TDHE, or umbrella TDHE; and geographic 
locations. We conducted these pretests to determine if the questions 
were burdensome or difficult to understand and if they measured what 
we intended. In addition, we met individually with officials from ONAP 
and NAIHC to obtain their comments on our questionnaire. On the basis 
of the feedback from the pretests and these other knowledgeable 
entities, we modified the questions as appropriate. 

Content coding of responses. We provided respondents with an 
opportunity to answer several open-ended questions. The responses to 
those questions were classified and coded for content by a GAO 
analyst, while a second analyst verified that the first analyst had 
coded the responses appropriately. Some comments were coded into more 
than one category since some respondents commented on more than one 
topic. As a result, the number of coded items is not equal to the 
number of respondents who provided comments. These comments cannot be 
generalized to our population of NAHASDA grantees. 

Nonsampling errors. Because this was not a sample survey, there are no 
sampling errors. However, the practical difficulties of conducting any 
survey may introduce other types of errors, commonly referred to as 
nonsampling errors. For example, differences in how a particular 
question is interpreted, the sources of information available to 
respondents, or the types of people who do not respond can introduce 
unwanted variability into the survey results. We included steps at 
both the data collection and data analysis stages for the purpose of 
minimizing such nonsampling errors. 

These steps included (1) having survey specialists help develop the 
questionnaire, (2) pretesting the questionnaire with NAHASDA grantees, 
(3) using multiple reminders to encourage survey response, and (4) 
contacting respondents to follow up on obvious inconsistencies, 
errors, and incomplete answers. 

Nonresponse analysis. Because only 66 percent of the study population 
provided responses, bias from nonresponse may result. If the responses 
of those who did not respond would have differed from the responses of 
those who did on some survey questions, the numbers reported solely 
from those who did respond would be biased from excluding parts of the 
population with different characteristics or views. To limit this kind 
of error, we made multiple attempts to obtain the participation of as 
many NAHASDA grantees as possible. We performed an additional analysis 
to determine whether our survey respondents had characteristics that 
were significantly different from all grantees in the study 
population. To do this, we identified two grantee characteristics that 
were available for the entire study population--grantee location 
(region) and grant size. For these comparisons, we found little 
difference between the distribution of responses from the respondents 
and the actual population values. 

However, when comparing respondents to nonrespondents by grant size, 
we found that the survey respondents, on average, received much larger 
grants; the median grant size was $717,686 for those who responded and 
$451,222 for those who did not. This suggests that grantees receiving 
large grant amounts were more likely to participate in our survey than 
others. For example, more than two-thirds of grantees with grants 
larger than $250,000 participated in the survey while only about half 
of the smaller grantees participated. Respondents to the survey 
received about 80 percent of the grant amounts distributed in 2008. 

We performed computer analyses to identify inconsistencies in 
responses and other indications of error. In addition, an independent 
analyst verified that the computer programs used to analyze the data 
were written correctly. 

To evaluate how NAHASDA program funds have allowed Native American 
tribes to address their affordable housing needs, we reviewed NAHASDA 
legislation to identify housing activities that are eligible under the 
program. We reviewed HUD performance data on the NAHASDA program, 
including its fiscal year 2008 NAHASDA Report to Congress and 
cumulative data on affordable housing units grantees built, acquired, 
and rehabilitated using IHBG funds during fiscal years 2003 through 
2008. We assessed the reliability of these data by (1) performing 
electronic testing of the data elements, (2) reviewing existing 
information about the data and the systems that produced them, and (3) 
interviewing agency officials knowledgeable about these data. We 
determined that these variables were sufficiently reliable for our 
reporting purposes. In addition to analyzing the 2008 IHBG allocation 
report, we reviewed data on pre-NAHASDA units that HUD factored into 
making 2008 grant allocations. We also reviewed the Indian Housing 
Plan (IHP) and Annual Performance Report (APR) forms that grantees use 
to report on planned and actual housing activities each year. Further, 
we requested and analyzed a sample of completed IHPs for 2005 through 
2008 that grantees submitted in each ONAP region to determine the 
types of housing activities grantees were pursuing in recent years. We 
used the IHP information in part to develop our sample for grantee 
site visits and telephone interviews. In conducting those site visits 
and telephone interviews and in our Web-based survey, we asked 
grantees questions related to how they use IHBG funds to address their 
affordable housing needs, other sources of funding they use in 
combination with the IHBG program (leveraging), some of the challenges 
they experience with the IHBG program or with leveraging, and program 
reporting. Similarly, in our interviews with regional ONAP officials, 
we asked questions about grantees' housing activities, leveraging, and 
program reporting. Specific to leveraging, we asked whether ONAP 
provides resources to assist grantees with identifying and accessing 
other potential funding opportunities to supplement their IHBG funds. 
Finally, we interviewed officials at IHS, BIA, and USDA about 
collaborating with HUD to provide housing and related services to 
Native American communities. 

To evaluate how, if at all, NAHASDA has improved the process of 
providing Native American tribes with access to federal funds to meet 
their affordable housing needs, we obtained perspectives from ONAP, 
grantees, and NAIHC on NAHASDA as it compares to the housing programs 
for which Native Americans were eligible under the U.S. Housing Act of 
1937 (1937 Act). In our interviews with ONAP officials, grantees, and 
NAIHC representatives, we discussed various aspects of NAHASDA in 
comparison with the 1937 Act programs, including program structure and 
funding. In our Web-based survey, we also asked grantees to report on 
specific challenges they have experienced with the IHBG program, and 
we asked those with pre-NAHASDA experience to rate NAHASDA in 
comparison with pre-NAHASDA programs. 

To evaluate the extent to which NAHASDA funding has contributed to 
infrastructure improvements in Native American communities, we 
reviewed the NAHASDA legislation to identify the statutory goals of 
the program. We then analyzed HUD's IHP and APR forms to assess the 
extent to which HUD tracked grantees' infrastructure needs and 
measured their investments in housing-related infrastructure 
development. In conducting our grantee site visits and telephone 
interviews and in our Web-based survey, we discussed grantees' use of 
NAHASDA funds to meet their infrastructure needs. We also discussed 
their use of IHBG funds for infrastructure development. In our survey, 
in particular, we asked grantees to describe their housing-related 
infrastructure needs, the extent to which they use IHBG funds to meet 
those needs, and any challenges they face. In our meetings with each 
of the six regional ONAP offices and with officials at ONAP 
headquarters, we asked similar questions. Finally, we asked IHS 
officials for their assessment of the sanitation infrastructure needs 
on Indian lands and we reviewed IHS's sanitation deficiency data 
collection process and methodology. 

We conducted this performance audit in Alaska; Arizona; California; 
Colorado; Illinois; Michigan; Montana; Oklahoma; Utah; Washington; 
Washington, D.C.; and Wisconsin from January 2009 to February 2010 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Survey Respondents' Suggestions for Smaller Tribes 
Participating in NAHASDA: 

To identify potential steps that small grantees can take to maximize 
the impact of their Native American Housing Assistance and Self- 
Determination Act of 1996 (NAHASDA) grant, we asked all survey 
respondents to suggest best practices or effective strategies for 
grantees that receive lesser grants, which we defined as less than 
$250,000 per year (see table 11). Of the 168 distinct recommendations 
provided, respondents overwhelmingly mentioned using the NAHASDA grant 
in combination with other funding sources--also known as leveraging--
to maximize the grant's impact. Other recommendations focused on 
enhancing the administrative capacity of tribal housing departments. 
For example, some survey respondents wrote that tribes should make 
sure to hire staff with experience in grant writing and others 
recommended that small grantees pool their resources, for example by 
joining an umbrella tribally designated housing entity, to minimize 
administrative costs. 

Table 11: Advice for Grantees Receiving Grants of Less Than $250,000 
per Year: 

Survey respondents recommend that tribes receiving less than $250,000 
a year: Leverage their grant Use their NAHASDA grant to leverage other 
sources of funding such as the Section 184 loan program, U.S. 
Department if Agriculture's Rural Development loans, and state or 
local funding; 
Number of such recommendations: 61. 

Survey respondents recommend that tribes receiving less than $250,000 
a year: Focus on smaller projects instead of constructing units Focus 
on smaller projects such as home rehabilitation, weatherization, 
downpayment assistance, or rental assistance; 
Number of such recommendations: 21. 

Survey respondents recommend that tribes receiving less than $250,000 
a year: Identify and focus on the tribe's priorities Such as by 
conducting a survey of the tribe and by meeting with tribal leadership 
to create an effective housing plan; 
Number of such recommendations: 20. 

Survey respondents recommend that tribes receiving less than $250,000 
a year: Increase administrative capacity Such as by hiring a 
professional grant writer; 
Number of such recommendations: 18. 

Survey respondents recommend that tribes receiving less than $250,000 
a year: Pool their resources with other NAHASDA recipients Such as by 
joining an umbrella tribally designated housing entity in their 
region, in order to maximize administrative capacity and available 
funds; 
Number of such recommendations: 14. 

Survey respondents recommend that tribes receiving less than $250,000 
a year: Learn best practices from peers Such as by contacting the 
National American Indian Housing Council or other grantees with more 
experience in using NAHASDA; 
Number of such recommendations: 11. 

Survey respondents recommend that tribes receiving less than $250,000 
a year: Accumulate funds over time Combine multiple-year grants 
(called "phasing") to accumulate a larger pool of funds; 
Number of such recommendations: 10. 

Survey respondents recommend that tribes receiving less than $250,000 
a year: Minimize administrative expenses Such as by limiting housing 
staff size and travel expenses; 
Number of such recommendations: 10. 

Survey respondents recommend that tribes receiving less than $250,000 
a year: Other suggestions; 
Number of such recommendations: 3. 

Source: GAO survey of NAHASDA grantees. 

[End of table] 

[End of section] 

Appendix III: Cherokee Freedmen: 

As part of our outreach to tribal entities served by the Native 
American Housing Assistance and Self-Determination Act of 1996 
(NAHASDA) program, we obtained information pertaining to the provision 
of federal housing assistance to Cherokee Freedmen. In a suit filed in 
federal district court, the Cherokee Freedmen claim to be "direct 
descendants of former slaves of the Cherokees, or free blacks who 
intermarried with Cherokees, who were made citizens of the Cherokee 
Nation in the Nineteenth Century." The Cherokee Nation, a federally 
recognized Indian tribe headquartered in Oklahoma, has attempted to 
expel this particular group of its citizens over the past several 
years through both tribal legislation and constitutional amendment. 
The Cherokee Freedmen's claim for tribal membership is based on an 
1866 treaty between the Cherokee Nation and the federal government, 
under which two groups of people--former slaves of the Cherokee Nation 
and "all free colored persons"--either residing in Cherokee territory 
when the Civil War began or who returned within six months, and the 
descendants of such persons, were guaranteed "all rights of native 
Cherokees." In response to the efforts to deny them citizenship 
rights, the Cherokee Freedmen have turned to litigation in both 
federal and tribal court, claiming that the action of the Cherokee 
Nation conflicts with the treaty and violates equal protection. The 
Cherokee Nation's arguments are grounded on the premise that the 
authority of Indian tribes to define membership is inherent. Any 
attempt by the Cherokee Nation to act on its measures to disenroll the 
Cherokee Freedmen has been enjoined in tribal court while federal 
litigation proceeds.[Footnote 33] Figure 17 provides an overview of 
key events in the Cherokee Freedmen's history since 1866. 

Figure 17: Cherokee Freedmen History: 

[Refer to PDF for image: timeline] 

1896 Membership on the Dawes Rolls: The Dawes Commission created the 
membership rolls of the “Five Civilized Tribes of Oklahoma,” including 
the Cherokee Nation. For the Cherokee, two separate rolls were 
created: the Freedmen Roll and the Blood Roll. 

Treaty of 1866, Article IX: The Cherokee agreed that all freedmen who 
were residents of the Cherokee Nation and their descendants would have 
the same rights as Native Cherokees. 

1976 Ratification of Constitution: The Cherokee ratified their 
constitution, requiring reference to the Dawes Rolls for tribal 
membership. Subsequently, the Cherokee passed legislation requiring 
descent exclusively from the Blood Roll for tribal member-ship, 
denying the Cherokee Freedmen voting rights and eligibility for 
Cherokee Nation programs and services. 

2003 Election for Principal Chief: Several Cherokee Freedmen alleged 
to the Bureau of Indian Affairs (BIA) that they were excluded from 
voting in the 2003 election for Principal Chief because their ancestry 
came from the Freedmen Roll. BIA approved the results of this election. 

August 2003 Vann v. Kempthorne: In response to the 2003 election, the 
Cherokee Freedmen filed a lawsuit in federal district court against 
the Secretary of the Interior and requested that the election be ruled 
invalid. 

March 7, 2006, Allen v. Cherokee Nation Tribal Council: The Cherokee 
Nation Judicial Appeals Tribunal ruled that the provision of the Code 
of the Cherokee Nation that tribal membership was derived only through 
the Blood Roll violated the Cherokee Constitution. 

December 19, 2006, Federal District Court Decision: In Vann v. 
Kempthorne, the District Court for the District of Columbia ruled that 
both the 13th Amendment, which abolished slavery, and the Treaty of 
1866 abrogated tribal sovereign immunity with respect to the suit 
filed by the Freedmen described above. The court allowed the Cherokee 
Freedmen to sue the Cherokee Nation and the tribal officers, along 
with Secretary Kempthorne. 

March 3, 2007, Referendum: The Cherokee Nation voted to amend its 
constitution to exclude Freedmen from tribal membership (not approved 
by BIA). 

May 22, 2007, Temporary Injunction: The District Court of the Cherokee 
Nation issued a temporary injunction against enforcement of the March 
2007 constitutional amendment and reinstated membership benefits to 
the Freedmen. 

June 23, 2007, Referendum: The Cherokee Nation passed a referendum to 
remove the requirement for BIA approval of constitutional amendments. 

October 2008 NAHASDA Reauthorization: The statute authorized the 
Cherokee Nation to receive Native American Housing Assistance and Self-
Determination Act (NAHASDA) funds as long as the May 2007 injunction 
remained in effect pending the outcome of various litigation between 
the Cherokee Nation, Cherokee Freedmen, and the federal government. 

July 24, 2008, Vann v. Kempthorne Decision: The D.C. Circuit Court of 
Appeals, reversing the District Court, rules that the sovereign 
immunity of the Cherokee Nation was not abrogated by the 13th 
Amendment or the 1866 Treaty; however, the Court also held that tribal 
sovereign immunity did not bar a lawsuit that sought to stop the 
officers of the Cherokee Nation from violating the 13th Amendment and 
the 1866 Treaty. 

April 30, 2009: Several members of Congress sent a letter to Attorney 
General Holder requesting that the Department of Justice investigate 
allegations that the Cherokee Nation had denied benefits, including 
housing assistance, to its Cherokee Freedmen members. 

May 7, 2009: Two members of Congress urged the Department of Justice 
to reject fellow members’ request for an investigation into alleged 
violations of the Freedmen’s civil rights, contending that the issue 
is for the courts to decide. 

November 9, 2009: The Department of Justice declines to initiate an 
investigation, citing ongoing litigation over the status of the 
Freedmen. 

Source: GAO. 

[End of figure] 

The Cherokee Freedmen and Housing Benefits: 

As part of our outreach to tribal entities served by NAHASDA, we 
obtained information pertaining to the provision of housing assistance 
to Cherokee Freedmen. We relied on statements from the Cherokee 
Nation's housing department, representatives of the Cherokee Freedmen, 
and Department of Housing and Urban Development (HUD) officials for 
the following information: 

* According to the Cherokee Nation's housing department, the 
department is "color blind" and makes no distinction between Cherokee 
Freedmen and other enrolled members in providing housing benefits. 

* Cherokee Freedmen representatives told us that many Cherokee 
Freedmen members' enrollment applications have not been processed and 
many enrolled members have been unable to obtain housing and other 
benefits. 

* HUD officials explained that because they had not received any 
complaints from Cherokee Freedmen regarding housing benefits as of 
February 1, 2010, HUD is not actively monitoring the Cherokee Nation's 
compliance with the injunction in its provision of housing benefits to 
members. The officials said that they would pursue any such complaints 
through HUD's program monitoring and enforcement procedures. 

[End of section] 

Appendix IV: Comments from the Department of Housing and Urban 
Development: 

U.S. Department Of Housing And Urban Development: 
Office Of Public and Indian Housing: 
Washington, DC 20410-5000: 

February 22, 2010: 

Mr. William B. Shear: 
Director, Financial Markets and Community Investment: 
United States Government Accountability Office: 
Washington, DC 20548: 

As you requested, the Office of Public and Indian Housing, Office of 
Native American Programs has reviewed the draft report on Native 
American Housing. It is a generally positive report and will be a very 
useful document when issued. Other than some minor technical comments 
that were forwarded under separate cover the following official 
comments are provided: 

It is recommend that the title "Tribes Generally View Block Grant 
Program as Effective, but Tracking of Infrastructure Plans and 
Investments Needs Improvement" be changed to remove everything after 
the comma. The title highlights a small negative aspect of a report 
that is generally positive about the Indian Housing Block Grant (IHBG) 
program. 

One of the conclusions reached is that HUD does not collect or report 
on infrastructure needs, and does not access the Indian Health Service 
(IHS) sanitation deficiency data. Adequate access to safe drinking 
water and sanitation facilities has been a serious concern and 
documented need in Indian Country. While there have been improvements, 
as cited in the draft report, there still exists a significant need 
for adequate infrastructure to support Indian Housing. HUD and IHS 
should continue to work together to address these problems. Allowing 
the use of IHBG funds to leverage IHS infrastructure resources would 
greatly improve the resources available to Indian tribes to address 
this serious problem. 

Please contact Jennifer Bullough, Director of Grants Evaluation, 
Office of Native American Programs, at (202) 402-4274, if you have any 
questions. 

Sincerely, 

Signed by: 

Rodger J. Boyd: 
Deputy Assistant Secretary for Native American Programs: 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

William B. Shear, (202) 512-8678 or shearw@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, Andy Finkel, Assistant 
Director; Bernice Benta; Juliann Gorse; John McGrail; Marc Molino; 
Luann Moy; Paul Revesz; and Jennifer Schwartz made key contributions 
to this report. 

[End of section] 

Footnotes: 

[1] The 1937 Act, as amended, created programs to provide decent, 
safe, and sanitary housing for low-income families. Native Americans 
did not receive federal housing funds under the 1937 Act until 1961. 

[2] Title VI of NAHASDA enables HUD to provide a 95 percent loan 
guarantee to private lenders or investors that make loans to NAHASDA 
grantees to develop housing and community facilities. The Title VI 
loan is secured by a grantee's pledge of its current and future IHBG 
funds. In this report, we use the term grantee to mean NAHASDA grant 
recipient. 

[3] GAO, Native American Housing: Information on HUD's Funding of 
Indian Housing Programs, [hyperlink, 
http://www.gao.gov/products/GAO/RCED-99-16] (Washington, D.C.: Nov. 
30, 1998). 

[4] For additional details on the results of our survey, see GAO-10-
373SP. 

[5] According to the U.S. Census, in 2000, 879,381 American Indian and 
Alaska Native (AI/AN) individuals--or 36 percent of all AI/AN 
individuals--lived on trust land, reservations, or other tribal-owned 
property. The number of AI/AN individuals living on trust land, 
reservations, or other tribal-owned property more than doubled from 
1990 to 2000. These Census numbers are based on single-race reporting, 
that is, individuals who reported only that they were AI/AN and not 
AI/AN and another race. 

[6] A 1995 GAO report describes block grants as "a form of federal aid 
authorized for a wider range of activities […] The recipients of block 
grants are given greater flexibility to use funds based on their own 
priorities and to design programs and allocate resources as they 
determine to be appropriate. These recipients are typically general 
purpose governments at the state or local level, as opposed to service 
providers (for example, community action organizations)." GAO, Block 
Grants: Characteristics, Experience, and Lessons Learned, GAO/HEHS-95-
74 (Feb. 9, 1995). 

[7] A TDHE is either (1) a former Indian Housing Authority that 
managed Native American housing programs under the 1937 Act and 
converted its operations to meet the requirements of NAHASDA or (2) a 
new nontribal government entity authorized by one or more tribes to 
receive grants and provide affordable housing assistance for Native 
Americans under NAHASDA. A TDHE acts on behalf of the one or more 
tribes authorizing or establishing the housing entity. 

[8] The terms Indian and Native American generally refer to American 
Indians and Alaska Natives (AI/AN). In this report, we generally use 
Native American interchangeably with AI/AN. 

[9] According to 24 CFR 1000.10, an Indian Housing Authority is "[...] 
an entity that [...] is authorized to engage or assist in the 
development or operation of low-income housing for Indians under the 
1937 Act; and [...] is established: (i) by exercise of the power of 
self government of an Indian tribe independent of state law; or (ii) 
by operation of state law providing specifically for housing 
authorities for Indians, including regional housing authorities in the 
state of Alaska." 

[10] Under specific circumstances, non-low-income Indian families and 
non-Indian families residing on a reservation or in an Indian area 
also are eligible to receive assistance. 

[11] Per the 2008 reauthorization of NAHASDA, provisions regarding 
binding commitments for the remaining useful life of property do not 
apply to a family or household member who subsequently takes ownership 
of a homeownership unit. This affordability provision also does not 
apply to housing built under Section 202 of the 1937 Act. 

[12] The American Homeownership and Economic Opportunity Act of 2000 
authorized the Native Hawaiian Housing Block Grant program under 
NAHASDA to serve Native Hawaiians. The Hawaii State Department of 
Hawaiian Home Lands is the sole recipient of program funds. The Native 
Hawaiian Housing Block Grant program was not included in this review. 

[13] The six regional ONAP offices are Alaska ONAP (Anchorage), 
Eastern Woodlands ONAP (Chicago), Northern Plains ONAP (Denver), 
Northwest ONAP (Seattle), Southern Plains ONAP (Oklahoma City), and 
Southwest ONAP (Phoenix). In 2008, HUD's Alaska ONAP had the smallest 
proportion of total AI/AN residents in the six regions (3 percent); 
the largest proportions of AI/AN were in the Southwest region (32 
percent) and Eastern Woodlands region (30 percent). However, the 
Alaska region had the largest proportion of its total population that 
identifies as AI/AN (15 percent); the Eastern Woodlands region had the 
smallest proportion of its total population that identifies as AI/AN 
(0.49 percent). 

[14] Through negotiated rulemaking between HUD and tribal 
representatives, NAHASDA regulations initially established a provision 
for minimum IHBG funding. The provision allowed a tribe that was 
allocated less than $50,000 for the need portion of its grant in the 
first year of participation to have the need portion of its grant 
adjusted to $50,000. In subsequent fiscal years, a tribe that was 
allocated less than $25,000 for the need portion of its grant would 
have the need portion of its grant adjusted to $25,000. Minimum 
funding was initially established for fiscal years 1998 to 2002. From 
fiscal years 2003 to 2007, HUD extended minimum funding each year to 
avoid hardship to the affected tribes. In fiscal year 2008, the annual 
minimum grant was revised through negotiated rulemaking to reflect a 
percentage of the IHBG annual appropriation. 

[15] Prior to fiscal year 2003, ONAP did not have reliable data on 
IHBG activity. For data purposes, HUD considers NAHASDA-funded units 
to be those built using any IHBG funds. 

[16] According to the National American Indian Housing Council 
(NAIHC), as of January 2009, the organization had a membership of 267 
tribes and TDHEs, representing nearly 460 Indian tribes. NAIHC 
provides its members with training, technical assistance, research, 
communications, and advocacy. 

[17] Grantees' pre-NAHASDA housing units decrease in number over time 
when grantees convey units from their inventories through lease- 
purchase or purchase agreements; when units are demolished; or when 
grantees otherwise lose the legal right to own, operate, or maintain 
the units. 

[18] Among the six ONAP regions, survey respondents indicated their 
participation in the ICDBG program as follows: Alaska (69 percent or 
24/35); Eastern Woodlands (60 percent or 24/40); Northern Plains (95 
percent or 19/20); Northwest (72 percent or 13/18); Southern Plains 
(66 percent or 21/32); and Southwest (71 percent or 52/73). 

[19] Among the six ONAP regions, survey respondents indicated their 
participation in the Section 184 loan program as follows: Alaska (39 
percent or 13/33); Eastern Woodlands (74 percent or 28/38); Northern 
Plains (85 percent or 17/20); Northwest (79 percent or 15/19); 
Southern Plains (39 percent or 13/33); and Southwest (54 percent or 
38/71). 

[20] The American Recovery and Reinvestment Act of 2009 provided $510 
million in funding for NAHASDA. Half of the funds were awarded to 
fiscal year 2008 grantees in formula grants based on 2008 allocation 
inputs. The other half was made available through competitive grants. 

[21] Approximately 37 percent of the LIHTC projects HUD reported were 
placed into service between 1995 and 2006 had 21 to 50 units; 22 
percent had 51 to 99 units; and 24 percent had 100 or more units. 

[22] GAO, Native American Housing: Homeownership Opportunities on 
Trust Lands Are Limited, [hyperlink, 
http://www.gao.gov/products/GAO/RCED-98-49] (Washington, D.C.: Feb. 
24, 1998). 

[23] Individual tribal members can only apply for Section 184 loans. 

[24] [hyperlink, http://www.gao.gov/products/GAO/RCED-98-49]. 

[25] The regulations, as negotiated, limit planning and administrative 
expenses to 20 percent of a grantee's annual grant amount. Grantees 
must receive approval from HUD when those expenses are expected to 
exceed 20 percent of their annual grant amount. 

[26] Grantees we interviewed described land as not buildable if it 
included flood plains or hillside, or if it was near water with high 
mineral content. 

[27] NAHASDA was amended in October 2008 by Pub. L. No. 110-411 to 
allow for the operation and maintenance of NAHASDA units as a housing 
management service and not as a model activity, which required 
approval from HUD. 

[28] NAHASDA was amended in October 2008 by Pub. L. No. 110-411 to 
authorize a demonstration loan guarantee program for community 
development projects. HUD officials told us that this legislation did 
not impact tribes' ability to use the IHBG or the Title VI program for 
housing-related infrastructure development. 

[29] National American Indian Housing Council, Building the Framework: 
Housing Infrastructure Development in Indian Country (2003). 

[30] For many years, IHS has been statutorily precluded from directly 
funding the construction of sanitation facilities for HUD-funded 
homes. Prior to NAHASDA, HUD officials said that they worked with IHS 
to develop sanitation facilities for HUD-funded housing and 
coordinated the necessary payments to IHS. Now, tribes are responsible 
for planning their own housing development and can obtain technical 
assistance services from IHS and reimburse IHS for any construction 
costs from their IHBG funds or other sources. 

[31] Federal Infrastructure Task Force Access Subgroup, Meeting the 
Access Goal: Strategies for Increasing Access to Safe Drinking Water 
and Wastewater Treatment to American Indian and Alaska Native Homes 
(March 2008). 

[32] HUD reported 359 recipients of NAHASDA grants for fiscal year 
2008. We later adjusted the number we surveyed to 351 because at the 
time of our survey, 8 recipients were represented by umbrella TDHEs 
that were already part of our survey population. 

[33] For additional information on the history of the dispute, see 
Yule Kim and M. Maureen Murphy, The Cherokee Freedmen Dispute: Legal 
Background, Analysis, and Proposed Legislation, Congressional Research 
Service Report for Congress, RL34321 (Washington, D.C., Jan. 14, 2009). 

[End of section] 

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