A financing tool long reserved for community facilities has, according to one tribal housing official, been applied to tribal residential housing for what she describes as the first time. This could offset 20 to 25% of total project costs for tribes facing severe housing shortages and limited access to conventional capital.
Alexandra Terry, Deputy Director of Administration and Development at the Tohono O’odham Ki:Ki Association (TOKA), says the organization’s San Miguel Homes project paired existing federal housing funds with New Market Tax Credits. Terry says that, based on her own research and experience, she is not aware of this combination being used in tribal housing before.
“Usually those are for facilities, a public facility like an education center, a community recreation facility, or a hospital type of thing,” Terry says. “But they had never done that with housing that we know of.”
New Market Tax Credits are typically deployed in commercial or community facility contexts. The tool cannot be layered with Low Income Housing Tax Credits (LIHTC), which are the primary financing mechanism for most affordable residential development. That restriction remains in place. But TOKA’s situation was different: the association already combines federal funding with tribal funds rather than relying on LIHTC as its primary equity source. That structure made it possible to introduce New Market Tax Credits into the capital stack without triggering the standard incompatibility.
“We were very easily able to leverage those funds with New Market Tax Credits,” Terry says. “My understanding of New Markets is that it does give a project benefit of about 20 to 25% of a total project cost. And then it goes directly to the bottom line of that project cost.”
TOKA operates on a reservation the size of Connecticut, where infrastructure alone can consume up to 50% of a project budget, according to Terry. A 20 to 25% reduction in total project cost changes what becomes financially viable to build.
Terry notes this was her first New Market Tax Credit project and that she does not consider herself the expert on the instrument. But she is direct about the replication potential. TOKA is already planning a second New Market Tax Credit project, including an off-reservation development estimated at approximately $25 million, where the association hopes to offset roughly 20% of costs through the same mechanism.
“This is definitely a process that other tribes will be able to replicate,” Terry says.
The premise is straightforward: tribes that already blend federal housing funds with tribal capital, rather than structuring deals around LIHTC equity, may have the same flexibility TOKA used to add New Market Tax Credits to their projects. The tool doesn’t require a novel legal structure, just a capital stack that doesn’t already include LIHTC.
For the broader real estate finance community, this suggests an existing federal tool may have been underused in Indian Country, at least based on Terry’s experience. The financing approach described here is not a new program or policy change. It’s a new combination of existing financing tools.
Terry says infrastructure routinely accounts for up to 50% of TOKA’s project budgets. The Tohono O’odham Nation cannot tap into existing municipal utilities. It operates its own utility authority and must build new water lines, power sources, and roads from scratch for each development. Construction crews face multi-hour drives to reach project sites, and the Nation sits on a 100-year FEMA floodplain, which requires elevated building pads and additional engineering.
“A developer in town looks at our project cost, they’re like, oh my gosh, why is it costing $500,000 to build one house?” Terry says. “The horizontal and the engineering is really what’s costing us.”
Any tool that reduces total project cost by 20 to 25% directly offsets a portion of those infrastructure expenses, costs that developers building elsewhere typically don’t face.
The San Miguel Homes project drew on three sources: US Bank provided New Market Tax Credit investment, Travois structured the transaction, and the Chickasaw Nation participated as a Community Development Entity. Terry says the deal required these parties to work through a structure with no direct precedent in tribal housing finance.
TOKA’s current focus remains residential development. The association has a waiting list of just under a thousand active households, plus an inactive list of applicants who stopped updating their materials after years of waiting. TOKA treats each new financing pathway as a way to reach families who would otherwise remain unserved indefinitely.
About the Expert: Alexandra Terry is Deputy Director of Administration and Development at the Tohono O’odham Ki:Ki Association (TOKA), the housing authority for the Tohono O’odham Nation in southern Arizona.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
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