U.S. Sens. John Thune (R-S.D.) and Mike Rounds (R-S.D.) and U.S. Rep. Kristi Noem (R-S.D.) today welcomed U.S. Department of Agriculture (USDA) Secretary Sonny Perdue’s announcement that USDA, at the request of the delegation, will implement a new Section 502 relending pilot program on tribal lands in South Dakota. The USDA Rural Development (USDA-RD) Section 502 Direct Loan Program helps low-income families pursue home ownership. According to USDA, South Dakota and North Dakota are the only states that have been authorized for this pilot program.  

“Home ownership has always been part of the American Dream, and as a result of today’s announcement, more families throughout South Dakota will hopefully get the opportunity to see their own dreams realized, too,” said Thune. “I can’t think of a better place than South Dakota for this pilot program to be implemented and look forward to seeing the positive effect this will have on families living in tribal communities throughout the state. I want to thank Secretary Perdue for seeing the potential in this pilot program and taking quick action to see that it moves forward.”   

“Access to credit is critical for families who are trying to purchase a home,” said Rounds. “The USDA’s new Section 502 relending pilot program will help those living on tribal lands secure a home loan. We thank Secretary Sonny Perdue for his leadership on this initiative.”

“Strengthening families is a direct investment into strengthening the future, and expanding home ownership opportunities is a key part of that,” said Noem. “I am thankful Secretary Perdue and USDA recognized the potential of South Dakota tribal communities for this pilot program. I am hopeful it will help ease the path to home ownership for tribal families in the years ahead.”

“To thrive, rural America needs a creative and forward-thinking partner in USDA,” said Assistant to the USDA Secretary for Rural Development Anne Hazlett. “Under Secretary Perdue’s leadership, USDA is harnessing innovation so we can be a better, more effective partner to Tribal communities in building their futures.”

In March 2018, the delegation requested this pilot program, which is supported by the Great Plains Tribal Chairmen’s Association and the South Dakota Native Homeownership Coalition, be implemented in South Dakota because while the current Section 502 program is highly utilized, only 23 of the 7,187 loans that were issued in fiscal year 2017 went to Native American families on tribal land. Under its current structure, USDA-RD lacks the adequate staff resources that are required to build relationships and deliver loans in tribal communities.   

Recognizing the lack of Section 502 direct loans in tribal communities, officials from USDA-RD, both in Washington, D.C., and South Dakota, collaborated with two Native American community development financial institutions (CDFIs) in South Dakota to develop this pilot program.

Both CDFIs, Mazaska Owecaso Otipi Financial in Pine Ridge and Four Bands Community Fund in Eagle Butte, are institutions in good standing with USDA-RD and, as a result of today’s announcement, are now eligible lenders under Section 502. Each will receive $800,000 in Section 502 direct loan funding from USDA-RD and be responsible for contributing $200,000 in additional funds to the pilot project. These funds would be used to relend to Native American families in tribal communities in South Dakota and North Dakota that meet the program’s requirements.

Families that are interested in learning more about this pilot program should contact the eligible CDFIs or one of the congressional delegation’s offices in Washington or South Dakota.  

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