McCabe flags red flags in ZenniHome housing deal contract review

A Navajo Nation housing deal meant to help ease a chronic shortage of homes ran into a hard stop after Controller Sean McCabe said his office found enough warning signs to block the contract from moving forward. His testimony put the focus on whether promised housing for Navajo families could be delayed, made more expensive, or pushed off course by a procurement process that he said raised red flags.

McCabe told the Navajo Nation Budget and Finance Committee that the Office of the President and Vice President asked him to help shape a noncompetitive, sole-source contract tied to a $24 million grant intended to help ZenniHome build its housing manufacturing facility. The money was first announced in March 2024, when the Nation said ZenniHome would expand production by building a second factory at the former Navajo Generating Station site in LeChee, Arizona, under a 75-year lease.

Instead of signing off, McCabe said his office halted the proposal after spotting internal company cash-flow problems and questionable statements in public federal fundraising documents. He also raised concerns about whether the arrangement complied with Navajo Nation rules and federal requirements. A later version of the deal sought to sole-source the contract to Indigenous Design Studio + Architects, or IDSA, with ZenniHome later appearing as a subcontractor under that structure.

McCabe testified that the original proposal eventually fell apart after a dispute between the Office of the President and Vice President and IDSA. He also said sole-source contracting is not automatically barred under Treasury guidelines, but he questioned whether that path made sense because he did not believe only one vendor could do the work.

The June 10 investigatory hearing was part of a broader council push that began after lawmakers approved hearings into ZenniHome funding and related contracts in July 2025. The rules adopted by the Budget and Finance Committee covered procurement, subcontracts, deliverables, and payments tied to ZenniHome and IDSA, with council leaders saying constituents wanted answers about how the project was being handled.

The stakes are especially high in places like McKinley County and across the Navajo Nation, where housing shortages remain acute. President Buu Nygren has said one-third of homes on the Nation lack running water, kitchens, or bathrooms, while also saying no $24 million went missing from Navajo accounts and that the work order was reduced from 160 homes to 80. He later said the LeChee factory closure cost 200 Navajo jobs. The Navajo Department of Justice also said it learned on February 10, 2026, of an IDSA complaint against ZenniHome in Maricopa County Superior Court.

For families still waiting on housing, the hearing showed more than a contract fight. It showed a council still trying to build a record of who raised concerns, which safeguards failed, and whether the Nation can keep major housing projects on track without losing public trust.