BROWNING, Mont. – Mortgage agency Fannie Mae has invested $2 million in equity to help build 20 units of affordable rental housing on the Blackfeet reservation.
Tribal representatives and housing officials gathered here for the project’s completion ceremony, which was held recently.
Fannie Mae’s federal charter will not allow it to lend money directly for housing, but it can indirectly fund units by buying Low Income Housing Tax Credits, as it has done here to help finance the new single-family homes of the South Flatiron project.
Fannie Mae’s contribution was the largest but not the only financing for the housing. The tribe contributed some of its federal housing block grant money, and other private sources were tapped as well.
Tax credit deals always involve a number of parties, and this one was no different. Although the LIHTC is a federal program, it is administered by states, so the award of credits was made by the Montana Board of Housing.
Since tribes pay no federal income taxes, the tax credits are useless to them, and typically they are sold to investors through the capital markets. Here, Enterprise Social Investment Corp. and Raymond James Tax Credit Funds combined to make the sale to Fannie Mae.
The new development consists of 10 two-bedroom and 10 three-bedroom units, available to low-income residents for as little as $225 per month.
Amenities include fenced yards, dishwashers, and carports, as well as full views of nearby Glacier National Park.
Fannie Mae’s involvement came as part of its “American Dream” commitment to buy $2 trillion in affordable housing loans between 2000 and 2010. It already has reached the halfway point of that commitment.
Fannie Mae specifically targeted American Indian housing when it announced in 2000 that it would buy or invest in $1.25 billion in housing finance through 2005 in the state of Montana. It plans to assist 11,000 residents of the state through its Montana partnership office, headed by Mary Lou Affleck.
For all of last year, Fannie Mae bought or invested in $217 million of housing on Indian lands, a huge boost from $81 million the year before.
As previously reported in Indian Country Today, President Bush’s proposal to cut the tax on corporate dividends presents a direct challenge to Indian country deals done with the LIHTC. That’s because corporations would have to choose between the two.
The Senate’s move to cut the President’s tax proposal in half, and Bush’s more recent, smaller scaling back of his proposal, are thus good news for LIHTC deals because it is likely there won’t be enough in the smaller packages to cover the dividend proposal, and it may be jettisoned.
The Blackfeet and their Montana neighbors, the Confederated Salish & Kootenai tribes, have taken advantage of the LIHTC to finance a dozen housing projects using it between them.
In addition to having a great need for housing as on most reservations, the Blackfeet Tribe has an additional problem in especially poor quality of homes built here. Some here have ascribed the infestation to poor quality “HUD homes” funded by the federal government.