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Mutual Help Homeownership Opportunity Program for Indian Areas

The Mutual Help program allows Indian housing authorities (IHAs) to help low-income Indian families purchase a home. A family makes monthly payments based on 15 to 30 percent of its adjusted income. Payments are credited to an equity account that is used to purchase the home.

Homeownership often has been very difficult for Indian families to achieve because of very low incomes and because issues related to ownership of Indian land have prevented access to private mortgage financing. The Mutual Help program allows eligible Indian families to gradually become homeowners.

Type of Assistance:
Development funds are provided to IHAs to construct, buy, or rehabilitate Mutual Help homes. The Indian Housing Act of 1988 also established a self-help component that allowed lower income Indian families to contribute a major portion of the labor necessary to build their homes. This is a cooperative effort supervised by someone with technical expertise in construction to reduce the overall development costs and eventual price to the buyer. Contracts between the IHA and a homebuyer are generally for a period of 15 to 25 years.

Eligible Grantees:
IHAs could apply for this program, if their plans were approved by the local governing body and were responsive to local housing needs. Under the Native American Housing Assistance and Self-Determination Act (NAHASDA) of 1996, which became effective October 1, 1997, tribes, IHAs, or their successor tribally designated housing entities may develop and operate programs similar to Mutual Help with NAHASDA funds. Existing contracts remain in force, however, unless they are renegotiated.

Eligible Customers:
Mutual Help benefits low-income Indian families who can pay between 15 and 30 percent of their adjusted income (but not less than the Administration Charge as determined by the IHA) and perform or pay for all required maintenance on the homes. The family is required to contribute at least $1,500 toward the cost of the home. Payments in excess of the Administration Charge are credited to an equity account that is used to purchase the home.

Eligible Activities:
There are no operating subsidies for administrative overhead, but operating subsidies can cover IHA training, counseling, collection losses, repair of vacant units, and unusual circumstances.

No longer applicable. Formerly, IHAs applied through their Area Office of Native American Programs (ONAP). Approvals were made at the Area level.

Funding Status:
No new funding has been available since NAHASDA took effect. Existing contracts remain in force unless renegotiated. Approximately 40,066 housing units were under management as of September 30, 1995.

Technical Guidance:
The Mutual Help program was authorized by the Housing Act of 1937, as amended, P.L. 75-412, 42 U.S.C. 1401-1435, and the Indian Housing Act of 1988, P.L. 100-358. Regulations are found at 24 CFR 950. The program is administered by ONAP in HUD's Office of Public and Indian Housing.

For More Information:
Additional information is available from the National ONAP Office in Denver, Colorado; contact Bruce Knott or Deborah LaLancette at (303) 675-1600. Information is also available from ONAP Area Offices in Albuquerque, Anchorage, Chicago, Denver, Oklahoma, Phoenix, and Seattle.