House Passes Bill To Speed Up Mortgage Processes on Tribal Lands—and To Extend Leases to 99 Years

The House passed a bill to simplify the mortgage process on tribal lands, setting it up for President Donald Trump to sign into law.

The House voted 384-40 to pass S. 728, which would create new, faster deadlines for the Bureau of Indian Affairs to process residential and business mortgages on tribal land. The Senate passed a version in December.

The bill requires the bureau to conduct an initial screening within 10 days and contact the lender "as soon as practicable" to ensure the application is all in order. The bureau has 20 days to approve or disapprove of the leasehold mortgage and 30 days to approve a right-of-way or land mortgage.

The bill also creates new reporting requirements and an ombudsman who would report to the secretary of the Interior. South Dakota Republican Sen. John Thune, who introduced the bill in the Senate, said it could bolster chances to develop affordable housing.

"Affordable housing opportunities on tribal trust land can be hard to come by in South Dakota
and across the nation due in part to the BIA’s challenging mortgage approval process," Thune said last year. "It can complicate lenders’ ability to provide financing to prospective homebuyers and participate in federal tribal housing programs."

The mortgage process on tribal land can take up to a year

The government controls about 60 million acres of tribal lands, held in trust for the benefit of more than 570 tribes. About 60% of the country's population of American Indian and Alaska Native peoples live on or near reservations, according to research from the Federal Reserve Bank of Minneapolis.

BIA is required to review and approve all mortgages on tribal lands. But the timelines it has been given "aren't always adhered to," said South Dakota Republican Rep. Dusty Johnson, another supporter of the bill. Mortgages can take up to a year, instead of a few weeks, as is normal elsewhere.

"In a year, that sale can fall apart," Johnson said. "A family waiting to buy a home should not wait months because of bureaucratic inefficiencies."

As a result, Thune said the bill could encourage more mortgage lenders to offer services on tribal lands, and also make it easier to develop affordable housing there.

The bill "is a major step toward improving tribal families’ access to affordable housing opportunities on tribal trust land,” said Rudy Soto, executive director of the National American Indian Housing Council.

The Congressional Budget Office estimated the bill would cost $2 million over the next five years to implement, mainly for the hiring of three new employees.

Congress backs extension to tribal land leases

The House also passed H.R. 5910, which would allow tribes to sign leases of up to 99 years on federal land. Tribes gained the power to authorize leases of up to 25 years, with an option of another 25 years, in 1955.

But those timelines don't work for modern economic development projects, whether for commercial uses or housing, said Rep. Harriet Hageman, a Wyoming Republican and the bill's sponsor.

Congress has since allowed about 50 tribes the individual right to sign 99-year leases. But the bill would extend that right to all tribes, Hageman said.