[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 185 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 185
To amend title 38, United States Code, to improve the program for
direct housing loans made to Native American veterans, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 31, 2023
Mr. Rounds (for himself and Mr. Tester) introduced the following bill;
which was read twice and referred to the Committee on Veterans' Affairs
_______________________________________________________________________
A BILL
To amend title 38, United States Code, to improve the program for
direct housing loans made to Native American veterans, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Native American Direct Loan
Improvement Act of 2023''.
SEC. 2. IMPROVEMENTS TO PROGRAM FOR DIRECT HOUSING LOANS MADE TO NATIVE
AMERICAN VETERANS BY THE SECRETARY OF VETERANS AFFAIRS.
(a) General Authorities and Requirements.--
(1) Direct housing loans to native american veterans.--
Section 3762(a) of title 38, United States Code, is amended to
read as follows:
``(a) The Secretary may make a direct housing loan to a Native
American veteran under this subchapter if the Secretary ensures the
following:
``(1) That each Native American veteran to whom the
Secretary makes a direct housing loan under this subchapter--
``(A) holds, possesses, or purchases using the
proceeds of the loan a meaningful interest in a lot or
dwelling (or both) that is located on trust land; and
``(B) will purchase, construct, or improve (as the
case may be) a dwelling on the lot using the proceeds
of the loan.
``(2) That each such Native American veteran will convey to
the Secretary by an appropriate instrument the interest
referred to in paragraph (1)(A) as security for a direct
housing loan under this subchapter.
``(3) That the Secretary, including the Secretary's
employees or agents, may enter upon the trust land for the
purposes of carrying out such actions as the Secretary
determines are necessary, including--
``(A) to evaluate the advisability of the loan;
``(B) to monitor any purchase, construction, or
improvements carried out using the proceeds of the
loan; and
``(C) to manage any servicing or post-foreclosure
activities, including acquisition, property
inspections, and property management.
``(4) That there are established standards and procedures
that apply to the foreclosure of the interest conveyed by a
Native American veteran pursuant to paragraph (2), including--
``(A) procedures for foreclosing the interest; and
``(B) procedures for the resale of the lot or
dwelling (or both) purchased, constructed, or improved
using the proceeds of the loan.
``(5) That the loan is made in a responsible and prudent
manner, subject to standards and procedures as are necessary
for the reasonable protection of the financial interests of the
United States.''.
(2) Memorandums of understanding, agreements, and
determinations.--Section 3762(b) of such title is amended to
read as follows:
``(b)(1) To carry out the purpose of subsection (a), the Secretary
may--
``(A) enter into a memorandum of understanding with a
tribal organization, other entity, or individual;
``(B) rely on agreements or determinations of other Federal
agencies to guarantee, insure, or make loans on trust land; and
``(C) enter into other agreements or take such other
actions as the Secretary determines necessary.
``(2) If the Secretary determines that the requirements under
subsection (a) are not being enforced by a tribal organization, other
entity, or individual that is a party to any memorandum of
understanding, agreement, or determination described in paragraph (1),
the Secretary may cease making new direct housing loans to Native
American veterans under this subchapter within the area of the
authority of the tribal organization, other entity, or individual (as
the case may be).''.
(b) Direct Loans to Native American Veterans To Refinance Existing
Mortgage Loans.--Section 3762(h) of such title is amended to read as
follows:
``(h) The Secretary may make direct loans to Native American
veterans in order to enable such veterans to refinance existing
mortgage loans for any of the following purposes:
``(1) To refinance an existing loan made under this
section, if the loan--
``(A) meets the requirements set forth in
subparagraphs (B), (C), and (E) of paragraph (1) of
section 3710(e) of this title;
``(B) will bear an interest rate at least one
percentage point less than the interest rate borne by
the loan being refinanced; and
``(C) complies with paragraphs (2) and (3) of
section 3710(e) of this title, except that for the
purposes of this subsection the reference to subsection
(a)(8) of section 3710 of this title in such paragraphs
(2) and (3) shall be deemed to be a reference to this
subsection.
``(2) To refinance an existing mortgage loan not made under
this section on a dwelling owned and occupied by the veteran as
the veteran's home, if all of the following requirements are
met:
``(A) The loan will be secured by the same dwelling
as was the loan being refinanced.
``(B) The loan will provide the veteran with a net
tangible benefit.
``(C) The nature and condition of the property is
such as to be suitable for dwelling purposes.
``(D) The amount of the loan does not exceed either
of the following:
``(i) 100 percent of the reasonable value
of the dwelling, with such reasonable value
determined under the procedures established by
the Secretary under subsection (d)(2).
``(ii) An amount equal to the sum of the
balance of the loan being refinanced and such
closing costs (including any discount points)
as may be authorized by the Secretary to be
included in the loan.
``(E) Notwithstanding subparagraph (D), if a loan
is made for both the purpose of this paragraph and to
make energy efficiency improvements, the loan must not
exceed either of the following:
``(i) 100 percent of the reasonable value
of the dwelling as improved for energy
efficiency, with such reasonable value
determined under the procedures established by
the Secretary under subsection (d)(2).
``(ii) The amount referred to under
subparagraph (D)(ii), plus the applicable
amount specified under section 3710(d)(2) of
this title.
``(F) The loan meets all other requirements the
Secretary may establish under this subchapter.
``(G) The existing mortgage being refinanced is a
first lien on the property and secured of record.
``(3) To refinance an existing mortgage loan to repair,
alter, or improve a dwelling owned by the veteran and occupied
by the veteran as the veteran's home, if all of the following
requirements are met:
``(A) The loan will be secured by the same dwelling
as was the loan being refinanced.
``(B) The nature and condition of the property is
such as to be suitable for dwelling purposes, and the
repair, alteration, or improvement substantially
protects or improves the basic livability or utility of
such property.
``(C) The amount of the loan, including the costs
of repairs, alterations, and improvements, does not
exceed either of the following:
``(i) 100 percent of the reasonable value
of the dwelling as repaired, altered, or
improved, with such reasonable value determined
under the procedures established by the
Secretary under subsection (d)(2).
``(ii) An amount equal to the sum of--
``(I) the balance of the loan being
refinanced;
``(II) the actual cost of repairs,
alterations, or improvements; and
``(III) such closing costs
(including any discount points) as may
be authorized by the Secretary to be
included in the loan.
``(D) The loan meets all other requirements the
Secretary may establish under this subchapter.
``(E) The existing mortgage loan being refinanced
is a first lien on the property and secured of
record.''.
(c) Expansion of Outreach Program on Availability of Direct Housing
Loans for Native American Veterans.--Section 3762(i)(2) of such title
is amended by adding at the end the following new subparagraph:
``(G) Pursuant to subsection (g)(4), assisting Native
American veterans in qualifying for mortgage financing by--
``(i) partnering with local service providers, such
as tribal organizations, tribally designated housing
entities, Native community development financial
institutions, and nonprofit organizations, for
conducting outreach, homebuyer education, housing
counseling, and post-purchase education; and
``(ii) providing other technical assistance as
needed.
``(H) Attending conferences and conventions conducted by
the network of Native community development financial
institutions and other Native American homeownership
organizations to provide information and training to Native
community development financial institutions about the
availability of the relending program under section 3762A of
this title.''.
(d) Adequate Personnel.--Section 3762 of such title is amended by
adding at the end the following new subsection:
``(k) The Secretary shall assign a sufficient number of personnel
of the Department dedicated to carrying out the authority of the
Secretary under this subchapter, including construction and valuation
specialists to assist with issues unique to new construction and
renovations on trust land.''.
(e) Definitions.--Section 3765 of such title is amended--
(1) in paragraph (1)--
(A) by amending subparagraph (C) to read as
follows:
``(C) is located in the State of Alaska within a
region established under section 7(a) of the Alaska
Native Claims Settlement Act (43 U.S.C. 1606(a));'';
(B) in subparagraph (D), by striking the period at
the end and inserting a semicolon; and
(C) by adding at the end the following new
subparagraphs:
``(E) is defined by the Secretary of the Interior
and recognized by the United States as land over which
an Indian Tribe has governmental dominion; or
``(F) is on any land that the Secretary determines
is provided to Native American veterans because of
their status as Native Americans.''; and
(2) by adding at the end the following new paragraphs:
``(6) The term `community development financial
institution' has the meaning given that term in section 103 of
the Community Development Banking and Financial Institutions
Act of 1994 (12 U.S.C. 4702).
``(7) The term `Indian Tribe' means any Indian tribe, band,
nation, or other organized group or community, 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.), which is recognized as
eligible for the special programs and services provided by the
United States to Indians because of their status as Indians.
``(8) The term `Native community development financial
institution' means any entity--
``(A) that has been certified as a community
development financial institution by the Secretary of
the Treasury;
``(B) that is not less than 51 percent owned or
controlled by Native Americans; and
``(C) for which not less than 51 percent of the
activities of the entity serve Native Americans.
``(9) The term `net tangible benefit' shall have such
meaning as the Secretary determines appropriate, but shall
include the refinance of an interim construction loan.
``(10) The term `other technical assistance' means services
to assist a Native American veteran to navigate the steps
necessary for securing a mortgage loan on trust land, including
pre-development activities related to utilities, identifying
appropriate residential construction services, and obtaining
lease clearances and title status reports from the applicable
tribal organization or the Bureau of Indian Affairs.
``(11) The term `tribally designated housing entity' has
the meaning given that term in section 4 of the Native American
Housing Assistance and Self-Determination Act of 1996 (25
U.S.C. 4103).''.
(f) Interest Rate Reduction Financing Loan.--Section 3729(b)(4)(F)
of such title is amended by striking ``3762(h)'' and inserting
``3762(h)(1)''.
(g) Regulations.--Section 3761 of such title is amended by adding
at the end the following new subsection:
``(c) The Secretary shall prescribe such regulations as may be
necessary to carry out this subchapter.''.
SEC. 3. NATIVE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION RELENDING
PROGRAM.
(a) In General.--Subchapter V of chapter 37 of title 38, United
States Code, is amended by inserting after section 3762 the following
new section:
``Sec. 3762A. Native community development financial institution
relending program
``(a) Purpose.--The Secretary may make a loan to a Native community
development financial institution for the purpose of allowing the
institution to relend loan amounts to qualified Native American
veterans, subject to the requirements of this section.
``(b) Standards.--
``(1) In general.--The Secretary shall establish standards
to be used in evaluating whether to make a loan to a Native
community development financial institution under this section.
``(2) Requirements.--In establishing standards under
paragraph (1), the Secretary shall ensure that a Native
community development financial institution--
``(A) is able to originate and service loans for
single-family homes;
``(B) is able to operate the relending program in a
manner consistent with the mission of the Department to
serve veterans; and
``(C) uses loan amounts received under this section
only for the purpose of relending, as described in
subsection (c), to Native American veterans.
``(c) Relending Requirements.--
``(1) In general.--A Native community development financial
institution that receives a loan under this section shall use
the loan amounts to make loans to Native American veterans
residing on trust land.
``(2) Requirements.--A loan to a Native American veteran
made by a Native community development financial institution
under paragraph (1) shall--
``(A) be limited either to the purpose of purchase,
construction, or improvement of a dwelling located on
trust land or to the refinance of an existing mortgage
loan for a dwelling on trust land, consistent with the
requirements of section 3762(h) of this title; and
``(B) comply with such terms and conditions as the
Secretary determines are necessary to protect against
predatory lending, including the interest rate charged
on a loan to a Native American veteran.
``(d) Repayment.--A loan made to a Native community development
financial institution under this section shall--
``(1) be payable to the Secretary upon such terms and
conditions as are prescribed in regulations pursuant to this
subchapter; and
``(2) bear interest at a rate of one percent.
``(e) Oversight.--Subject to notice and opportunity for a hearing,
whenever the Secretary finds with respect to loans made under
subsection (a) or (c) that any Native community development financial
institution has failed to maintain adequate loan accounting records, to
demonstrate proper ability to service loans adequately, or to exercise
proper credit judgment, or that such Native community development
financial institution has willfully or negligently engaged in practices
otherwise detrimental to the interest of veterans or of the Government,
the Secretary may take such actions as the Secretary determines
necessary to protect veterans or the Government, such as requiring
immediate repayment of any loans made under subsection (a) and the
assignment to the Secretary of loans made under subsection (c).''.
(b) Clerical Amendment.--The table of sections at the beginning of
chapter 37 of such title is amended by inserting after the item
relating to section 3762 the following new item:
``3762A. Native community development financial institution relending
program.''.
(c) Native American Veteran Housing Loan Program Account.--Section
3763 of such title is amended by adding at the end the following new
subsection:
``(c) Of amounts available in the Account, the Secretary may use
for loans made under section 3762A of this title--
``(1) in fiscal year 2024, not more than $5,000,000; and
``(2) in any fiscal year after fiscal year 2024, an amount
as determined necessary by the Secretary to meet the demand for
such loans.''.
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