LAPWAI, Idaho – A $3.5 million housing project including mortgage finance
and federal tax credit investment plans to provide units for more than 60
families on the Nez Perce reservation.

In a year or two if all goes well, 20 homeownership units built with a $1.8
million loan and a dozen Low Income Housing Tax Credit rent-to-own units
should rise on a steep and beautiful hillside in Lapwai. An additional 32
will be available at large, including modular homes.

These units will comprise the Sundown Heights development, where currently
64 lots have been developed. The lots and a 250,000-gallon water tank built
to service them, have been forlornly waiting a year for the necessary
Bureau of Indian Affairs approvals in order for construction to begin.

The fact that half of these buildings will leverage outside finance shows
once again that there is a mechanism (several in fact) that can drive
housing investment (in this case by Seattle-based Washington Mutual Bank
and Fannie Mae of Washington, D.C.) in the most remote rural areas.

Washington Mutual’s 20 mortgages (and another two by Wells Fargo Home
Mortgage) will be done through the federal Department of Housing and Urban
Development’s section 184 guaranteed American Indian loan program. Fannie
Mae is investing in the tax credits through Raymond James Tax Credit Funds
of Atlanta, which operates many tax credit funds, including a couple
specifically designed for Indian housing.

The rest are being financed primarily by the sale of old HUD “Mutual Help”
homes to their occupants, with the cash engendered being used to build new
units.

With 190 families on the current Nez Perce Tribal Housing Authority waiting
list, according to executive director Cielo Gibson, Sundown Heights may be
able to relieve up to one-third of the housing problem among the
reservation’s 4,000 inhabitants. There is still room for additional lots to
be developed, up to a total of about 150.

The three and four bedroom units are scheduled to be from between 1,350-
and 2,000-square-feet. Construction, which may get started this fall, will
be between $95,000 and $135,000 per unit. The housing authority is acting
as developer, and will take out the HUD 184 mortgages involved.

Key to the program’s success will be a vigorous counseling program the
housing authority has started. It even devotes a large room in its building
here to the counseling effort, which was financed by a HUD ROSS (resident
opportunities for self sufficiency) grant.

“When you start from scratch it’s a lengthy process,” Gibson said of
counseling. But, “the counseling makes the difference between a successful
homeowner and one that doesn’t succeed.”

The executive director of the tribe, Gibson noted, has directed tribal
employees to attend homebuyer education classes.

Homeownership isn’t a totally foreign idea on the reservation, Gibson said.
It has been accomplished on the “private property” parts of the homeland,
which like many combines “fee simple” (private) and federal trust land.

A down-payment assistance program has helped 30 people buy houses on
private property. The trust land areas, with their thorny title problems,
are where ownership has been slow to take root. Just two DPA grants have
gone for trust land.

And the tax credit is also not a newcomer to the Nez Perce, since the tribe
has used it on a previous project to rehabilitate older housing. That was
the Whitebird Subdivision, where 30 units were spruced up. That was the
first use of the LIHTC on a reservation in Idaho.

The housing authority has more than 500 HUD units under management, but has
been conveying them to tribal members. The housing authority vigorously
enforces its leases, and has a delinquency rate of between 10 and 12
percent.

The next most pressing need after homeownership, Gibson said, is rehab for
those old HUD units.