Nottawaseppi Huron Band of the Potawatomi, MI
Calhoun County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the Tribal Council of the Nottawaseppi Huron Band of the Potawatomi 1-20-2011 by Res. No. 01-20-11-02 (Title IX, Ch. 5, of the Tribal Code). Amendments noted where applicable.]

§ 9.5-1 Overview of program.

A. 
The Nottawaseppi Huron Band of Potawatomi Indians (NHBP or Tribe) has adopted this Down Payment Assistance Program to increase home ownership and make housing opportunities more affordable for enrolled members of the NHBP whose income falls below established income limits under the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA). Program grants are available to qualified members for down payment, mortgage rate buy down, and closing costs. The program also provides counseling on home ownership for eligible members who wish to progress from member applicant to homeowner.
B. 
The program will assist eligible members who qualify for a mortgage loan for the purchase of an existing single-family home or for new construction of a single-family home through a lending institution insured by the Federal Deposit Insurance Corporation (FDIC), United States Department of Agriculture (USDA) Rural Development Direct Loan, or Michigan State Housing Development Authority (MSHDA). Program grants shall contain resale restrictions. A recipient of a program grant shall grant NHBP a security interest in the premises which is purchased or constructed with the grant, as evidenced by a second mortgage. Resale restrictions and rights granted to NHBP shall ensure the integrity of the program and continued availability of affordable low- to moderate-income housing in the State of Michigan to all qualified enrolled members.
C. 
NHBP shall only provide a grant under this program to any individual tribal member at one time during his or her life.

§ 9.5-2 Definitions.

As used in this chapter, the following terms shall have the meanings indicated:
ASSISTANCE LETTER
A letter describing the program and the down payment loan which the NHBP Hearing Department will provide to a member applicant for his or her use in obtaining a primary mortgage loan.
GRANT/LOAN AGREEMENT
The contract signed by a member in which that member promises to follow and abide by the terms of the Down Payment Assistance Program as partial consideration for the monies advanced to the member under this program and which gives the NHBP the contractual right to maintain a lien on any premises acquired with assistance from the Down Payment Assistance Program.
MEMBER and/or MEMBER APPLICANT
An enrolled member of the Nottawaseppi Huron Band of Potawatomi Indians who has applied for or has been granted a loan under this Down Payment Assistance Program.
MEMORANDUM OF AGREEMENT
A memorandum signed by the member which describes the grant/loan agreement and lien maintained by NHBP on the member's property.
NOTE
The promissory note signed by the member applicant which evidences the loan and provides for repayment of the funds advanced under the program.
NOTTAWASEPPI HURON BAND OF POTAWATOMI or NHBP
A federally recognized tribe located in the Pine Creek area near Athens, Michigan, at 1485 Mno-Bmadzewen Way, Fulton, MI 49052.
PROGRAM or DPAP
The Nottawaseppi Huron Band of Potawatomi Indians Housing Department Down Payment Assistance Program Policy, as funded by the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA) and/or the Indian Housing Block Grant.
SECOND MORTGAGE or LIEN
The mortgage to NHBP which secures repayment of the monies advanced under the program.

§ 9.5-3 Eligibility criteria.

A. 
The member applicant must meet NAHASDA income guidelines and shall document ALL the income of all individuals living in the member applicant's household by providing signed copies of income tax returns, copies of pay stubs or W-2 forms (or each household member must include a signed and notarized statement listing the reasons why he or she did not file a tax return), or any other documentation deemed reasonable and necessary to the evaluation of the member's financial situation. The member applicant must sign a release authorizing the Housing Department to verify any eligibility criteria.
B. 
The member applicant must be an enrolled member of NHBP.
C. 
The member applicant and the head of household must each be at least 18 years of age or older.
D. 
The member applicant must be a first-time homebuyer and not have owned an interest in any real estate within the last three (3) years, unless one of the following exceptions applies:
(1) 
The member applicant is recently divorced or legally separated, where the previously owned home was held jointly and member applicant relinquishes all ownership rights to said home without any financial consideration being received for said relinquishment; or
(2) 
The member applicant seeks to acquire a new principal residence in Calhoun, Kalamazoo or Branch Counties because the member applicant or his/her spouse recently relocated to accept employment with the Tribe or a Tribally owned enterprise and the member previously owned residence in another location. A member applicant who still owns his/her former principal residence is not eligible for DPAP funds.
E. 
The member applicant must be ready, willing and able to participate in the prehomeownership counseling program.
F. 
The member applicant must qualify for a first mortgage loan administered by an approved lender in the amount of the total purchase price for a qualifying home, less any amounts of the grant and/or down payment loan to be awarded under the program, within three (3) months of the application approval date.
G. 
The member applicant or any individual who lives in the member applicant's household must not owe any funds to the Housing Department in connection with previous participation in a federally assisted housing program.
H. 
The member applicant must agree to sign a grant/loan agreement provided by NHBP, providing for repayment in the event of default by the member applicant, as well as second mortgage/lien in favor of NHBP.

§ 9.5-4 Restrictions on use of down payment assistance grant/loan funds.

A. 
Nature of premises.
(1) 
Members may purchase either existing stick-built, modular or manufactured panelized homes.
(2) 
Additional restrictions/conditions apply in the following situations:
(a) 
Pine Creek Reservation. If the home is to be located on the Pine Creek Indian Reservation, the building plans must be approved by the NHBP Tribal Planning and Land Use Committee.
(b) 
Modular homes on suitable land. New modular homes are eligible, provided the member applicant locates the unit on suitable land. "Suitable" means the land must perc for a private wastewater system, be free of encumbrances, not violate any zoning or environmental codes, and not be located within a development which charges a monthly rent for space. The site must conform to such other conditions as the NHBP may, from time to time, require.
(c) 
New construction. If the member applicant applies for down payment assistance for a home to be built by the member, NHBP may place the assistance amount in a trust or escrow account with the lender or title company on terms it determines appropriate. Under these circumstances, the lender or title company shall not release escrowed funds for "draw requests." Escrowed funds shall only be applied at closing for premises permitted under the Down Payment Assistance Program.
B. 
Appraisal. NHBP shall not assist in the purchase of any premises when the appraised value of the premises does not equal or exceed the proposed purchase price.
C. 
Prepayment of fees. The member applicant shall pay the appraisal and/or credit report fees and/or inspection fees (if necessary) at the time these processes are completed, but in all circumstances before closing, prior to NHBP advancing any funds under the terms and conditions of the program.
D. 
Allowable closing/down payment costs. Eligible costs under the Down Payment Assistance Program may include:
(1) 
Down payment/equity toward purchase price of home;
(2) 
Reimbursement of home inspection fees of up to $500;
(3) 
Cost of title examination and mortgage title insurance where applicable;
(4) 
Document preparation, if said document preparation is an expense of the member applicant and if the document preparation is performed by a third party not controlled by the lender;
(5) 
Property survey, if any;
(6) 
Recording fees and prorated share of taxes;
(7) 
Reimbursement of test and certification fees (such as water and environmental tests);
(8) 
Settlement fees, if the closing agent is not an employee of the mortgagee and if the settlement agent is an independent company or a subsidiary that regularly closes loans for several different mortgagees; and
(9) 
Loan origination fee up to 2% of loan amount.

§ 9.5-5 Limitations.

A. 
Funding under this program is available only to members residing within the State of Michigan.
B. 
A completed application for the Down Payment Assistance Program must be submitted.
C. 
The dwelling obtained through down payment assistance must be the primary residence of the member applicant.
D. 
The member applicant must cooperate fully in the prehomeownership counseling program established for the Down Payment Assistance Program.
E. 
The member applicant must occupy the home purchased through the program within thirty (30) days of the closing date and must make this home his principal residence for no less than five (5) years.
F. 
Once the member applicant has been assisted through this program, the member applicant will not qualify for the Housing Improvement Program (HIP) or similar housing rehabilitation program that might be established by NHBP for a term of five (5) years.
G. 
The member applicant must qualify for a mortgage loan through an approved financial institution. The Housing Department cannot provide down payment assistance for transactions involving land contracts or any lease-to-purchase scenarios.
H. 
The mortgage secured must have reasonable terms, including a thirty-year term at a fixed and reasonable interest rate.
I. 
The subject home must receive a certified appraisal that meets the requirements of the program.
J. 
The premises purchased must be either a single-family dwelling, a townhouse, a condominium unit or a manufactured/mobile home on a permanent foundation. Rental properties, condominiums, income properties, and/or cooperative units will not be eligible, nor will mobile homes and/or manufactured homes that are not placed on a permanent foundation and/or on property not owned by the member applicant.
K. 
NHBP will not provide assistance to purchase any premises classified by NHBP as substandard. Substandard means the home fails to meet local codes or standards for structural integrity, operating or mechanical systems, electrical and plumbing, zoning, environmental restrictions and material composition, or which otherwise fails to meet the United States Department of Housing and Urban Development (HUD) requirements that any home purchased through the program meets all local housing codes and HUD's published Housing Quality Standards.

§ 9.5-6 Implementation.

A. 
The member applicant must sign a counseling agreement that shall require the member applicant and any co-borrower to attend a series of one-on-one counseling sessions prior to the purchase of the home.
B. 
Approval of all applications shall be contingent upon the availability of funding budgeted for the Down Payment Assistance Program.
C. 
The member applicant must participate in a prehomeownership counseling program to be conducted by the Housing Counselor or his or her designee. In the prepurchase sessions, the Housing Counselor and the member applicant shall identify homeownership-oriented goals. The Housing Counselor shall then prescribe an action plan to meet those goals and shall monitor the member applicant's progress toward attaining the identified goals.
D. 
Once the goals are reached, the Housing Counselor will award a prehomeownership education certificate to the member applicant.
E. 
The member applicant must identify the chosen home to the Housing Department. The Housing Department will then dispatch a Housing Inspector to assess conformance with NAHASDA standards and to determine the cost of repairs necessary to bring the home into such conformance.
F. 
Conditional approval.
(1) 
If the Housing Department verifies that the member applicant meets all of the eligibility requirements and that all documents necessary and desired for approval are prepared, the Housing Director may grant conditional approval of the application. The conditional approval shall identify the amount of Down Payment Assistance Program funds the member applicant will be awarded if all remaining requirements, described below, are satisfied.
(2) 
If the NHBP Housing Department denies the application, the Department shall provide written notification to the member applicant, advising him/her of its action, the reason for the denial and any corrective actions (i.e., documents needed) that would cure the deficiency and permit approval of the application.
(3) 
Any member applicant who has had his or her application denied shall have the right to appeal the Housing Department's determination and request review of his or her application by the Tribal Council. Tribal Council shall not have the authority to waive any of the requirements of these guidelines but shall determine if the Housing Department's decision was in error. It shall be presumed that the Housing Department's decision was correct, and an aggrieved member applicant shall have the burden of proof to rebut this presumption by clear and convincing evidence.
G. 
A member applicant who has received conditional approval must qualify for a first mortgage loan administered by an approved lender in the amount of the total purchase price for a qualifying home, within three (3) months of the application approval date. If the member applicant fails to secure a mortgage loan within the three-month time frame, the Housing Department shall notify the member applicant in writing that the application approval has been withdrawn until such time as the member applicant's eligibility status changes.
H. 
The lender shall provide standard mortgage loan forms and conditions, shall set closing dates and times, and shall ensure that all appropriate paperwork is complete prior to closing. It is the responsibility of the member applicant to notify the Housing Department of the closing date at least ten (10) business days prior to that date.
I. 
Closing.
(1) 
When the member applicant is approved for a program loan and/or grant he or she must provide a primary mortgage loan commitment letter to the NHBP Housing Department within a reasonable time. After the closing date and time is set by the lender, a Housing Department representative will request a down payment assistance check, subject to the terms of the program and the availability of funds.
(2) 
The NHBP Housing Department representative will issue an assistance commitment letter and shall forward copies to the member applicant, lender, realtor (if one is involved), closing agent, and the NHBP Finance Department.
(3) 
The down payment check will be payable to the title company or the closing officer, for deposit into an escrow account until final closing. The member applicant must arrange with the lender to have closing dates set at least ten (10) business days after the Housing Department makes the payment request, to permit check preparation and arrangement for the funds.
(4) 
The NHBP Housing Department representative shall be present at all closings to ensure that closing documents contain required lien and first right of refusal provisions and to sign any recording documents.
J. 
Assistance amounts.
(1) 
The Tribe will not provide assistance of more than $20,000 per the member applicant for one residence, or household, no matter how many qualified tribal members reside there;
(2) 
Program down payment loans will be based on up to 20% of the primary mortgage amount so long as the total purchase price of the home does not exceed $175,000.
K. 
If at any time either during the application process or after purchase of the home it is determined that the member applicant provided false, incomplete or inaccurate information regarding any eligibility factor, an investigation to determine fraud will be conducted. If it is determined that fraud has been committed, the member applicant will be subject to penalties under applicable federal, state or tribal laws. In addition, approval of his or her application for down payment assistance will be withdrawn. If the assistance has already been rendered and there is a finding of fraud, the amounts granted or lent through the program shall become immediately due and payable, and the member applicant(s) shall be required to repay the entire down payment amount.

§ 9.5-7 Lien requirements; default by member.

Requirements of members and default provision.
A. 
Five-year occupation. Member applicants are required to use the property purchased under the program as their "primary residence" for not less than five (5) years from the date the member applicant moves in. If the member ceases to use the property as his or her primary residence before five (5) years from the date of closing, that event will constitute a default under this chapter. "Primary residence" means that the person occupies the home for not less than ten (10) consecutive months of the year, except for interruptions caused by medical conditions or otherwise approved by the NHBP Tribal Council. Vacations or other interruptions of less than three (3) weeks will not be considered a failure to occupy.
B. 
Lien. As a condition of the program grant, the NHBP will require the member to:
(1) 
Execute lien documents giving the NHBP certain rights to recover the property in the event of default; and/or
(2) 
The right of first refusal to NHBP in certain circumstances.
C. 
Default. The following shall constitute a default under the terms of this chapter and the note:
(1) 
Failure to use the property as the primary residence for a continuous period of sixty (60) days as provided in Subsection A above;
(2) 
Assignment or entering into an agreement to assign, convey or grant any interest in the premises to a person, firm or corporation other than the member applicant to whom the loan and/or grant was made;
(3) 
Pledging the premises to another as security after the loan or grant;
(4) 
Failure to make any payment when due or other default in a term or condition of any mortgage on the premise;
(5) 
Failure to pay any tax or assessment when due;
(6) 
Issuance of a notice of forfeiture, foreclosure or institution of foreclosure or forfeiture proceedings of any kind;
(7) 
The creation of a lien of any kind against the property;
(8) 
The member applicant filing for bankruptcy or being placed into bankruptcy or receivership;
(9) 
Failure to maintain adequate insurance on the premises;
(10) 
Failure to maintain the property in good condition and repair, or the commission of waste; and
(11) 
Use of the premises for business purposes. This will not apply to small home-based businesses which may, from time to time, be permitted by the Tribal Council in its discretion upon application of the member prior to the commencement of the business.
D. 
The occurrence of any of the events or conditions listed in Subsection C above will constitute a default under the terms of the note as well as this chapter. The failure of the NHBP to enforce its rights under this chapter or the note at any time shall not constitute a waiver of its right to proceed in the case of a default at any later time.
E. 
Recovery or repayment.
(1) 
Except in the finding of fraud, as described in § 9.5-6K of this chapter, which would require repayment of 100% of the amount funded regardless of the length of time between the disbursement and a finding of fraud, for all other defaults in the terms of this chapter or the note, NHBP will be entitled to recover the following percentages of the loan from the member depending on the length of time from the closing of the loan:
Required Ownership
Percentage Subject to Recovery
0 to 2 years
100%
2 to 3 years
75%
3 to 4 years
50%
4 to 5 years
25%
Over 5 years
0%
(2) 
After five (5) years, the down payment assistance loan will be forgiven, converted to a grant, and the lien discharged. In the event the note is for less than five (5) years, the percentages will be adjusted accordingly.
F. 
Notice of default to the member is not required before action to commence recovery.

§ 9.5-8 NHBP Housing Department activities.

A. 
Director's assistance. The NHBP Housing Director will assist the member applicant in the application process for the program and monitor the written application and accompanying documentation. The NHBP will use application information to determine income eligibility for down payment assistance, and it will assist with prequalification through an NHBP approved lender or real estate agent.
B. 
Down payment seminar. The NHBP Housing Director may contract with a third party provider for a member education seminar. The seminar may include:
(1) 
A review of the Down Payment Assistance Program;
(2) 
Introduction to the loan/mortgage process;
(3) 
Member orientation;
(4) 
Overview of home selection options; and
(5) 
Overview of extended services available through the NHBP Housing Department.
C. 
Extended services. NHBP Housing Department staff may provide advice when it believes it necessary or the member applicant requests it, for:
(1) 
Recommendations to lending institutions for securing a loan.
(2) 
Recommendations to realtors for choosing a home which complies with the program guidelines.
D. 
Closings. The NHBP Housing Department staff may assist the member applicant at closing to help the member with the following:
(1) 
Making appropriate calculations for the Down Payment Assistance Program assistance grant;
(2) 
Executing the necessary documents;
(3) 
Obtaining fire and casualty insurance documents.