Title VI Application Process
The Title VI program uses a team approach with regular conference calls to help ensure project success by providing technical assistance, answering questions, and coordinating the various parties to keep the project on schedule. The main participants include:
-
The tribe or its tribally designated housing authority (TDHE), which plans and implements the project. An eligible tribe/TDHE (borrower) is one that receives IHBG funds and is authorized to pledge those funds as security for the project. The project must meet Indian Housing Block Grant (IHBG) program regulations at 24 CFR Part 1000.
-
The lender, who provides loan financing to the borrower. In general, any lender that is supervised, regulated, or insured by any agency of the United States is eligible to participate in the Title VI program. In addition, the Secretary of HUD may approve a lender.
-
The Office of Native American Programs, which administers IHBG and other programs for Native Americans. The office is divided into six Area Offices. These offices provide technical assistance on grants and monitors grant and Title VI regulatory compliance. Each Area Office has an individual assigned to assist with the Title VI project.
-
The Office of Loan Guarantee administers Title VI, Section 184, and the Section 184A programs. OLG staff is located at HUD Headquarters in Washington D.C.
Although every project is different, HUD has developed a general checklist for the Title VI Loan Guarantee application process. The two-step process consists of the tribe’s/TDHE’s request for a Preliminary Letter of Acceptance and the lender’s Firm Commitment Request.
Preliminary Letter of Acceptance
The Preliminary Letter of Acceptance (PLA Request) is the Office of Loan Guarantee’s (OLG) preliminary approval of a guarantee to a tribe/TDHE. It is not an approval of a Title VI loan application or a commitment to approve/guarantee the Title VI loan. The preliminary review is recommended by HUD, and is beneficial because it:
-
Verifies the amount of the available guarantee
-
Permits an early compliance check and feasibility review
-
Offers an opportunity to identify and address potential issues before they create project delays
-
Increases lender interest by documenting HUD’s willingness to issue the guarantee
-
Provides an opportunity for the local Office of Native American Programs and OLG to offer technical assistance
A tribe/TDHE makes a request for a PLA to its Area Office of Native American Programs, which is then reviewed by the Area Office and OLG. Once accepted, HUD will issue a preliminary letter of acceptance (PLA). Because project planning takes time, HUDs PLA’s are good for 120 days (4 months), with extensions available on a case-by-case basis. Due to project changes, the tribe/TDHE is expected to submit updated material to its selected lender for inclusion in the lender’s Firm Commitment Request for the guarantee.
Firm Commitment
The tribe’s/TDHE’s lender makes a Firm Commitment to OLG. The lender is responsible for maintaining loan application documentation, including receipt of the tribe’s/TDHE’s current project documents.
The documents sent to OLG should be submitted according to the order shown on the checklist.
If the application is incomplete, OLG will request additional information and place the request on hold.
If the request is approved, HUD will issue a Firm Commitment to the lender. The Firm Commitment will identify any outstanding items the lender must submit, and closing conditions that the lender must meet prior to the issuance of a guarantee.
The Firm Commitment is valid for 90 days, with extensions available on a case-by-case basis.
Issuance of the Loan Guarantee
Once the lender meets the conditions in the Firm Commitment letter and forwards remaining outstanding items to OLG, the loan will be ready to close. After the loan has closed, OLG will execute agreements with the lender and tribe/TDHE and issue a guarantee to the lender. The lender will provide copies of the documents to the tribe and TDHE.
Summary
The entire Title VI process from the request for the Preliminary Letter of Acceptance to the issuance of a guarantee is flexible to meet the needs of the project, the tribe, and the borrower. If the tribe/TDHE is submitting project information to other funding sources, that information may be sufficient for documenting the Title VI request. If OLG requires additional information, it will notify the borrower or lender.
There is no application deadline for the Title VI Loan Guarantee Program, and the guarantee is not competitive. OLG will generally handle the requests in the order that they are received. The requests may be submitted electronically, on paper, or in a combination of both. Technical assistance is available from the tribe’s/TDHE’s Area ONAP and OLG.
Click here to contact the OLG in your region.