Department Awards First Loan Under Highly Fractionated Indian Land Program
LAS VEGAS, Dec. 6, 2016 - Agriculture Under Secretary Michael T. Scuse today announced that the U.S. Department of Agriculture (USDA) has approved and obligated the first loan under the Highly Fractionated Indian Land Loan program (HFIL). The program provides revolving loan funds to qualified intermediary lenders, allowing qualified tribes and individuals the ability to purchase tribal farmland that has multiple owners. Scuse made the announcement during the Intertribal Agriculture Council Membership meeting in Las Vegas, Nev.
"This program was created to address a longstanding barrier to agricultural financing in Indian Country," said Scuse. "Working with intermediary lenders, the program allows USDA to help increase the availability of farm loans to Native Americans who want to start or expand a farming or ranching operation on Indian lands."
The first recipient, the Native American Community Development Corporation Financial Services, Inc. (NACDCFS) of Browning, Mont., will lend funds directly to tribal members through a $10 million intermediary HFIL loan from USDA's Farm Service Agency (FSA). NACDCFS addresses critical needs in Native American communities related to the growth of family assets, supports economic development, and enhances the quality of life for communities and residents located on or near Montana's seven Indian reservations. NACDCFS provides one-on-one technical assistance to Native American entrepreneurs and agricultural producers. NACDCFS is a 501(c) (3), certified Native Community Development Financial Institution (CDFI), through the U.S. Department of Treasury.
Under the 1887 Dawes Act, Indian reservation land was divided and allotted to individual tribal members such that with the passing of each generation, title ownership was divided and parceled among heirs, while the land was not. As a result, land once owned by a single person could today be owned by hundreds or thousands of individuals, resulting in what is known as "highly fractionated Indian land." In many instances, landowners are unknown or cannot be located, which complicates the coordination of ownership or prevents the use of the property altogether. There are more than 245,000 owners of three million fractionated land interests, spanning approximately 150 Indian reservations.
Under HFIL, tribes and tribal members can submit an application directly to an intermediary lender. To participate, intermediary lenders first must be approved by USDA. The lenders may be private and tribal nonprofit corporations, public agencies, Indian tribes or lenders subject to federal or state regulation (such as a credit union or other financial institution). FSA will lend to the intermediary, which will relend to the applicant. The intermediary lender also will administer the loan for the applicant.
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