12 USC 1715z-13a - Loan guarantees for Indian housing

U.S Code last checked for updates: May 02, 2024

§ 1715z–13a.

Loan guarantees for Indian housing

(a)

Authority

(b)

Eligible loans

Loans guaranteed pursuant to this section shall meet the following requirements:

(1)

Eligible borrowers

(2)

Eligible housing

(3)

Security

(4)

Lenders

The loan shall be made only by a lender approved by and meeting qualifications established by the Secretary, except that loans otherwise insured or guaranteed by an agency of the Federal Government or made by an organization of Indians from amounts borrowed from the United States shall not be eligible for guarantee under this section. The following lenders are deemed to be approved under this paragraph:

(A)

Any mortgagee approved by the Secretary of Housing and Urban Development for participation in the single family mortgage insurance program under title II of the National Housing Act [12 U.S.C. 1707 et seq.].

(B)

Any lender whose housing loans under chapter 37 of title 38 are automatically guaranteed pursuant to section 1802(d) 1

 So in original. Probably should be section “3702(d)”.

of such title.

(C)

Any lender approved by the Secretary of Agriculture to make guaranteed loans for single family housing under the Housing Act of 1949 [42 U.S.C. 1441 et seq.].

(D)

Any other lender that is supervised, approved, regulated, or insured by any agency of the Federal Government.

(5)

Terms

The loan shall—

(A)

be made for a term not exceeding 30 years;

(B)

bear interest (exclusive of the guarantee fee under section 404 2

 So in original. Probably should be “subsection (d)”.

and service charges, if any) at a rate agreed upon by the borrower and the lender and determined by the Secretary to be reasonable, which may not exceed the rate generally charged in the area (as determined by the Secretary) for home mortgage loans not guaranteed or insured by any agency or instrumentality of the Federal Government;

(C)

involve a principal obligation not exceeding—

(i)

97.75 percent of the appraised value of the property as of the date the loan is accepted for guarantee (or 98.75 percent if the value of the property is $50,000 or less); and

(ii)

the amount approved by the Secretary under this section; and

(D)

involve a payment on account of the property (i) in cash or its equivalent, or (ii) through the value of any improvements to the property made through the skilled or unskilled labor of the borrower, as the Secretary shall provide.

(c)

Certificate of guarantee

(1)

Approval process

(2)

Standard for approval

(3)

Effect

(4)

Fraud and misrepresentation

(5)

Trailing documents

(A)

In general

The Secretary may issue a certificate of guarantee under this subsection for a loan involving a security interest in Indian trust land before the Secretary receives the trailing documents required by the Secretary from the Bureau of Indian Affairs, including the final certified title status report showing the recordation by the Bureau of Indian Affairs of the mortgage relating to the loan, if the originating lender agrees to indemnify the Secretary for any losses that may result when—

(i)

a claim payment is presented to the Secretary due to the default of the borrower on the loan; and

(ii)

the required trailing documents are outstanding.

(B)

Termination of indemnification agreement

(C)

Rule of construction

(d)

Guarantee fee

(e)

Liability under guarantee

(f)

Transfer and assumption

(g)

Disqualification of lenders and civil money penalties

(1)

In general

If the Secretary determines that any lender or holder of a guarantee certificate under subsection (c) has failed to maintain adequate accounting records, to adequately service loans guaranteed under this section, to exercise proper credit or underwriting judgment, or has engaged in practices otherwise detrimental to the interest of a borrower or the United States, the Secretary may—

(A)

refuse, either temporarily or permanently, to guarantee any further loans made by such lender or holder;

(B)

bar such lender or holder from acquiring additional loans guaranteed under this section; and

(C)

require that such lender or holder assume not less than 10 percent of any loss on further loans made or held by the lender or holder that are guaranteed under this section.

(2)

Civil money penalties for intentional violations

(3)

Payment on loans made in good faith

(h)

Payment under guarantee

(1)

Lender options

(A)

In general

In the event of default by the borrower on a loan guaranteed under this section, the holder of the guarantee certificate shall provide written notice of the default to the Secretary. Upon providing such notice, the holder of the guarantee certificate shall be entitled to payment under the guarantee (subject to the provisions of this section) and may proceed to obtain payment in one of the following manners:

(i)

Foreclosure

(ii)

No foreclosure

(B)

Requirements

(2)

Limitations on liquidation

(i)

Indian Housing Loan Guarantee Fund

(1)

Establishment

(2)

Credits

The Guarantee Fund shall be credited with—

(A)

any amounts, claims, notes, mortgages, contracts, and property acquired by the Secretary under this section, and any collections and proceeds therefrom;

(B)

any amounts appropriated under paragraph (7);

(C)

any guarantee fees collected under subsection (d); and

(D)

any interest or earnings on amounts invested under paragraph (4).

(3)

Use

Amounts in the Guarantee Fund shall be available, to the extent provided in appropriation Acts, for—

(A)

fulfilling any obligations of the Secretary with respect to loans guaranteed under this section, including the costs (as such term is defined in section 661a of title 2) of such loans;

(B)

paying taxes, insurance, prior liens, expenses necessary to make fiscal adjustment in connection with the application and transmittal of collections, and other expenses and advances to protect the Secretary for loans which are guaranteed under this section or held by the Secretary;

(C)

acquiring such security property at foreclosure sales or otherwise;

(D)

paying administrative expenses in connection with this section; and

(E)

reasonable and necessary costs of rehabilitation and repair to properties that the Secretary holds or owns pursuant to this section.

(4)

Investment

(5)

Limitation on commitments to guarantee loans and mortgages

(A)

Requirement of appropriations

(B)

Limitations on costs of guarantees

(C)

Limitation on outstanding aggregate principal amount

(6)

Liabilities

(7)

Authorization of appropriations

(j)

Requirements for standard housing

The Secretary shall, by regulation, establish housing safety and quality standards for use under this section. Such standards shall provide sufficient flexibility to permit the use of various designs and materials in housing acquired with loans guaranteed under this section. The standards shall require each dwelling unit in any housing so acquired to—

(1)

be decent, safe, sanitary, and modest in size and design;

(2)

conform with applicable general construction standards for the region;

(3)

contain a heating system that—

(A)

has the capacity to maintain a minimum temperature in the dwelling of 65 degrees Fahrenheit during the coldest weather in the area;

(B)

is safe to operate and maintain;

(C)

delivers a uniform distribution of heat; and

(D)

conforms to any applicable tribal heating code or, if there is no applicable tribal code, an appropriate county, State, or National code;

(4)

contain a plumbing system that—

(A)

uses a properly installed system of piping;

(B)

includes a kitchen sink and a partitional bathroom with lavatory, toilet, and bath or shower; and

(C)

uses water supply, plumbing, and sewage disposal systems that conform to any applicable tribal code or, if there is no applicable tribal code, the minimum standards established by the applicable county or State;

(5)

contain an electrical system using wiring and equipment properly installed to safely supply electrical energy for adequate lighting and for operation of appliances that conforms to any applicable tribal code or, if there is no applicable tribal code, an appropriate county, State, or National code;

(6)

be not less than—

(A)

(i)

570 square feet in size, if designed for a family of not more than 4 persons;

(ii)

850 square feet in size, if designed for a family of not less than 5 and not more than 7 persons; and

(iii)

1020 square feet in size, if designed for a family of not less than 8 persons, or

(B)

the size provided under the applicable locally adopted standards for size of dwelling units;

except that the Secretary, upon the request of a tribe or Indian housing authority, may waive the size requirements under this paragraph; and

(7)

conform with the energy performance requirements for new construction established by the Secretary under section 526(a) of the National Housing Act [12 U.S.C. 1735f–4(a)].

(k)

Environmental review

For purposes of environmental,3

 So in original. The comma probably should not appear.

review, decisionmaking, and action under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and any other law that furthers the purposes of that Act, a loan guarantee under this section shall—

(1)

be treated as a grant under the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101 et seq.); and

(2)

be subject to the regulations promulgated by the Secretary to carry out section 105 of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4115).

(l)

Definitions

For purposes of this section:

(1)

The term “family” means 1 or more persons maintaining a household, as the Secretary shall by regulation provide.

(2)

The term “Guarantee Fund” means the Indian Housing Loan Guarantee Fund established under subsection (i).

(3)

The term “Indian” means person recognized as being Indian or Alaska Native by an Indian tribe, the Federal Government, or any State.

(4)

The term “Indian area” means the area within which an Indian housing authority or Indian tribe is authorized to provide housing.

(5)

The term “Indian housing authority” means any entity that—

(A)

is authorized to engage in or assist in the development or operation of—

(i)

low-income housing for Indians; or

(ii)

housing subject to the provisions of this section; and

(B)

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.

The term includes tribally designated housing entities under the Native American Housing Assistance and Self-Determination Act of 1996 [25 U.S.C. 4101 et seq.].

(6)

The term “Secretary” means the Secretary of Housing and Urban Development.

(7)

The term “standard housing” means a dwelling unit or housing that complies with the requirements established under subsection (j).

(8)

Tribe; indian tribe.—

The term “tribe” or “Indian tribe” means any Indian tribe, band, nation, or other organized group or community of Indians, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act [43 U.S.C. 1601 et seq.], that is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians pursuant to the Indian Self-Determination and Education Assistance Act of 1975 [25 U.S.C. 5301 et seq.].

(9)

The term “trust land” means land title to which is held by the United States for the benefit of an Indian or Indian tribe or title to which is held by an Indian tribe subject to a restriction against alienation imposed by the United States.

(Pub. L. 102–550, title I, § 184, Oct. 28, 1992, 106 Stat. 3739; Pub. L. 104–330, title VII, § 701(a)–(j), Oct. 26, 1996, 110 Stat. 4048–4050; Pub. L. 105–276, title V, § 595(e)(11)–(13), Oct. 21, 1998, 112 Stat. 2658; Pub. L. 106–377, § 1(a)(1) [title II, § 227], Oct. 27, 2000, 114 Stat. 1441, 1441A–30; Pub. L. 106–568, title X, § 1002, Dec. 27, 2000, 114 Stat. 2925; Pub. L. 106–569, title V, § 502, Dec. 27, 2000, 114 Stat. 2961; Pub. L. 107–292, § 2(d), Nov. 13, 2002, 116 Stat. 2053; Pub. L. 110–37, § 2, June 18, 2007, 121 Stat. 229; Pub. L. 113–6, div. F, title VIII, § 1806, Mar. 26, 2013, 127 Stat. 433; Pub. L. 113–235, div. K, title II, § 241, Dec. 16, 2014, 128 Stat. 2759; Pub. L. 116–260, div. Q, title I, § 105(b), Dec. 27, 2020, 134 Stat. 2171.)

cite as: 12 USC 1715z-13a

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