FARMINGTON — A federal judge in Colorado has ruled that the federal government unlawfully reduced housing funding to the Navajo Housing Authority by millions of dollars.

Senior District Judge Richard Matsch ruled on June 30 that the U.S. Department of Housing and Urban Development must restore approximately $6.2 million in funding to the Indian Housing Block Grant program.

A request for comment from NHA about the ruling was not answered by press time on Monday.

The Indian Housing Block Grant program provides money for a range of affordable housing activities on reservations and is authorized under the Native American Housing Assistance and Self-Determination Act.

The NHA filed the civil complaint in April 2008 against the federal housing department and then HUD Secretary Alphonso Jackson.

Also named in the lawsuit was then HUD General Deputy Assistant Secretary Paula Blunt, who managed the Office of Public and Indian Housing, and Deborah Lalancette, then director of the Office of Grants Management — Office of Native American Programs.

HUD is authorized by Congress with the responsibility of administering Native American Housing Assitance and Self-Determination Act funding.

The Navajo Nation Council established NHA in 1963 as the tribally designated housing entity and authorized it to administer federal financial assistance.

The 2008 complaint stated that HUD made an unlawful reduction of funding issued under the Act to NHA.

According to court documents, NHA claimed HUD violated the Act by reducing the number of housing units counted for the calculation of the tribal housing entity's share of the annual Indian Housing Block Grant and then tried to take back funding issued in previous years.

In January 2008, HUD informed NHA that it received approximately $6.2 million in grant overfunding from fiscal years 1998 to 2006, according to court documents.

The letter proposed that NHA repay the amounts through a deduction of its fiscal year 2008 funding but NHA refused to voluntarily repay.

As a result of noncompliance, HUD reduced the fiscal year 2008 amount by approximately $6.2 million and did not provide any form of hearing before implementing the action.

"HUD had no authority to recapture grant funds that it had already awarded to Navajo without following the procedures required by the pre-amendment version of (the Act)," the June 30 ruling stated.

The court ordered that HUD "restore" the $6.2 million to NHA within 30 days of the judgment.

Noel Lyn Smith covers the Navajo Nation for The Daily Times. She can be reached at 505-564-4636. nsmith@daily-times.com Follow her @nsmithdt on Twitter.