The Low-Income Housing Tax Credit’s Eventual Tenant Ownership program is meant to give people the chance to buy the home they’re renting. It works by providing developers with Low-Income Housing Tax Credits for building homes that would qualify for this program in exchange. But new reporting from Underscore Native News and ICT highlights how the Washington program, which mainly serves tribal lands and governments, has failed to convert a single home to ownership. Luna Reyna is the Northwest Bureau Chief for the publication. She joins us to share more.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. About 20 years ago, tribal governments in Washington started offering a new housing program. It’s called the Eventual Tenant Ownership program and it’s part of a larger federal tax credit for low-income housing. The details do get complicated, but the basic idea is pretty simple. After 15 years of paying rent, tenants should be able to buy the home they’ve been renting. The thing is, 15 years have come and gone for hundreds of tenants in Washington state, and not a single renter has become an owner.
Luna Reyna wrote about this recently as a Northwest Bureau Chief for Underscore Native News and ICT. She joins us now with more. Welcome back to Think Out Loud.
Luna Reyna: Thank you so much for having me.
Miller: Can you just describe first some basics here, what the Low-Income Housing Tax Credit Eventual Tenant Ownership program is?
Reyna: Yeah, it is a mouthful. So the Low-Income Tax Credit program assists in developing the low-income rental housing. So it’s a federal program that’s facilitated by the Housing Finance Commission. But in 1986, the Tax Reform Act mandated that all states administer the second portion of it – the eventual tenant ownership portion – which allows for project units to be available for purchase to the residents after this 15-year compliance period. So that’s the nuts and bolts of the eventual tenant part.
The commission allocates federal income tax credits to a developer which, in Washington state, is largely the Native nations. They enter into a partnership with an investor who gives them money to develop, in exchange for those tax credits.
Miller: And then the idea is that after 15 years, the tenant, the person who’s been paying rent for this whole time for these new units, should be able somehow to take ownership. But we’ll get to the problems that you and the state auditors themselves have identified.
So I want to turn to that audit now. Last year, an audit found serious shortcomings in the way a state agency has been managing this program. Can you give us their high-level findings?
Reyna: Yeah, I think the biggest finding is that there has been no compliance for the last two decades. They didn’t develop sufficient guidance for each of the Native nations’ housing authorities to even implement the tenant purchase option. They just gave some general information and were kind of asleep at the wheel.
Miller: It also seems like the audit itself needed an audit. What did you find when you looked into some of the numbers that the state auditors put in their original report?
Reyna: Yeah, exactly. So according to some of the documents I was able to obtain through the Housing Finance Commission, the audit incorrectly claimed that there were only 135 homes that were eligible for homeownership in 2023. But a total of 160 homes were eligible for homeownership and none of them had begun the process for ownership transfer at the time of the audit. The audit also shared that by 2030, approximately 250 homes would be eligible for tenant purchase, but further investigation revealed that 454 homes would be eligible for conveyance by 2030. So those are major discrepancies.
Miller: Why is it that not a single home among 160 that you found had been transferred, had gone from ownership by either this private entity or the tribe to the actual residence?
Reyna: Exactly. So the crux of it is, for the last two decades, there’s been an absence of policies. There’s been no oversight, no guidance, compounded by the Washington Housing Finance Commission’s failure to enforce its own agreements with Native housing authorities. So it’s really kept any fulfillment of the original agreements with Native nations and the families to own the homes eventually at year 15.
Miller: When Washington officials have talked about this program, this eventual tenant ownership program, some have seemed to try to deflect blame by saying, hey, this hasn’t been successful anywhere. In other words, it’s not just us. This just isn’t a good program. At least that’s the way I read some of those quotes in your story.
Is that true? Has this not been successful anywhere?
Reyna: That’s so interesting. There are a lot of numbers that I wasn’t able to include in the story, but I reached out to a lot of the states that the commission reached out to. Ohio’s program has conveyed over 1,800 homes, but their program hasn’t served Native nations on trust land. Montana’s program has conveyed 58 homes in three different projects for Confederated Salish and Kootenai Tribes, and another three projects with the Blackfeet and Fort Belknap Nations. They’ve indicated that they’re going to begin the conveyance process. In Minnesota, one project with 16 homes with the Red Lake Nation was successfully conveyed in 2023. Another 21 homes in July and another 26 were expected to be conveyed this fall at Red Lake Nation.
That’s just the beginning of folks who are on a Native land. There are several in other states, so Colorado has only had one ETO (Eventual Tenant Ownership) project with 50 homes. So there’s some that don’t have very many homes. Today, there’s 18 units for Colorado. Virginia has only had one ETO project that’s not eligible for ownership until 2037. Oh, and South Dakota has no ETO projects. So some of the ones that they reached out to, there actually aren’t any ETO projects. But I spoke with companies like Trevois, who are consultants hired by Native nations to support in submitting these applications for this process, and they’ve had success in supporting conveyance across the country and have expressed shock at the lack of ownership in Washington.
Miller: What did you hear from tenants who have qualified for this program and who maybe thought that they were going to be able to own their homes after those 15 years, but it has not happened?
Reyna: They’ve had little to no guidance, training or even like a sample tenant transfer plan. And since tenant purchase is a new process for them, that’s so necessary. In the auditors focus groups, with people living in homes managed by the Yakama Nation Housing Authority, and there was one managed by the Lower Elwha Housing Authority, those revealed that tenants wanted to own their homes and they were looking forward to renovations, but they were unclear how the program worked. Some of them didn’t even realize that their homes could be owned one day. Others thought that they were in Section 8 housing and they never even heard anything about potentially being able to own their homes.
So tenants were really just in the dark and want to know more in writing about everything from financing to the actual purchase process, to information about ongoing maintenance. And they also wanted to know about passing on their homes to their grandchildren and their children. The audit says that housing authorities are responsible for providing that information and supporting the tenant needs, but the commission must develop that guidance for the housing authority to be able to implement those tenant purchase options.
Miller: If I understand the audit correctly that you were describing before, it’s focused on the state agency that oversees this program and it found that they had erred in not setting up this system, not providing better guidance for tribal governments, not done important check-ins and follow-ups. But I still wonder, these individual programs are run by a handful of tribal governments. Was anything preventing these tribes from doing these transfers? If they said, “Hey, this is important to us. It’s been 15 years, you’ve always gotten your rent in on time. We’re gonna make this happen.” Could they have done that?
Reyna: No. So housing authorities or the Native authorities, like you mentioned, are responsible for providing the information and support to tenants to understand the purchase options, but the commission must first develop that guidance for each housing authority to be able to implement the tenant purchase option under this federal program. And that guidance wasn’t developed until July of this year.
Miller: As a result of the audit.
Reyna: Exactly.
Miller: What else changed at the state level as a result of the audit?
Reyna: So the state auditor’s office gave a few recommendations for progress moving forward. The first called for an updated process that includes scheduling for progress reports and reported changes – this was everything in a timely manner, monitoring the process, documenting the reporting process. And then the second called for clearer guidance. The August 2024 Eventual Tenant Ownership Guide for property ownership was created and the July 2025 updated Commission Housing Tax Credit policies were created, which should help implement all of those necessities to be able to really implement the program.
When I talked to the commission, they said that they’ve contacted all participants in 2022 to check on compliance and transfers, and by 2023, the commission had shared those new policies with housing authorities, and that framework was finalized in 2024. So under the new policies, the commission will require yearly certifications to ensure that the homeownership progresses moving forward. And starting in year 13, there’ll be more detailed notifications, residents will be included in the information, property inspections and any major maintenance. And the commission says they’ve also created a lease writer that explains the Eventual Tenant Ownership program from the beginning, from day one. So residents should be aware that they could own their home at year 15 from the first day they start residing in their new home.
Miller: One of the confusing pieces of this story for me was that there was a real disagreement about what seems like a basic question. About what it should take for a tenant of one of these homes to take ownership. Can you explain that disagreement?
Reyna: Yeah, exactly. So the commission and resident advocates have never agreed on the process for successful transfer of ownership under the ETO program in Washington. The director of multi-family housing and community facilities for the Housing Finance Commission, when I spoke with her, insisted that the tenant had to purchase the property. These are sovereign nations, so dictating how they transfer homes that they now own to their citizens can be seen as a bit of an overreach.
So, the transfer of property can happen in a number of ways. For example, Nooksack Indian Housing Authority only requires one additional dollar of consideration for conveyance or transfer and sale of the properties. I spoke with David Bland, who’s the retired and chief executive officer of a company called Travois. It’s a firm that partners with Native nations to support the program. And he explained how Native housing authorities choose to transfer the homes at year 15 is their own decision, and Travois generally advised their clients to convey the houses to the tenants with no purchase necessary.
Miller: In other words, if you pay your rent every month for 15 years, and at the end of it, you pay $1 or it’s transferred, you own it after those 15 years.
Reyna: Exactly.
Miller: But the state has said no, we don’t think this is the way it should be?
Reyna: Yes, the Housing Finance commission, the folks that I spoke with there said that they believe this should be like a purchase, they had to purchase the property. And I think the way that Nooksack went about that purchase price is it’s a dollar.
Miller: Has this been worked out? You were saying that in the coming years, that there’s gonna be more guidelines put forward, more check-ins, people who are 13 years into renting, that they’re going to hopefully be getting a lot more communication about how this works. But has this basic question about whether or not tenants actually have to put up a significant amount of money or not been resolved?
Reyna: I think that’s a great question. A good example of that is there was something called reserve accounts. The commission claimed it was their understanding that each Native nation was going to establish this reserve account and the money received in that reserve account from the tax credits would be like the funds for purchasing the home later. But with Nooksack, Nooksack decided to remove the homeownership reserve accounts completely from their transfer plan and now their purchase price for each unit will be $1. Purchase price is set at $1. So, since what I’m seeing with Nooksack, there’s no real pushback about this change, I’m assuming that other nations will follow this pattern. Since reserve accounts weren’t funded and this is each nation’s authority to decide how and how much the purchase price should be.
Miller: So just to zoom out, does it seem like any homes are actually going to be transferred anytime soon?
Reyna: I hope so. As of this year, there are now 301 eligible homes for homeownership. As of September, the housing commission has approved a tenant transfer plan for Tulalip, where 91 homes are eligible for ownership; Spokane Indian Housing Authority, where 25 homes are eligible for ownership; Colville, where 45 homes were eligible for ownership; and Nooksack has 85 homes. There are so many homes. Quinault has 35 homes eligible for ownership. Lower Elwha, there are 20 homes eligible for ownership.
So the next step after the approval of the tenant transfer plan is for the housing authority to complete a spreadsheet of homes that they intend to convey. And return that to commission. And as of September, none of the housing authorities had returned that spreadsheet. I did follow up with the housing commission in November again and we’ll continue to follow this. But it feels good. It feels like the new process is working. There are many nations already who have begun working on their tenant transfer plans, so that is looking up.
Miller: Luna, thanks very much.
Reyna: Yeah, thank you so much for having me.
Miller: Luna Reyna is the Northwest Bureau Chief for Underscore Native News and ICT. You can find a link to her recent article at our website.
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