What
is the Section 184 Loan Guarantee Program?
The Section
184 Indian Home Loan Guarantee Program is a mortgage product specifically
for American Indian and Alaska Native families, tribes, Alaska Villages or tribally
designated housing entities. Congress established this program in 1992 to facilitate
homeownership in Native American communities. List of
Participating Tribes
With
a Section 184 mortgage borrowers can purchase a home with a low down payment,
no monthly mortgage insurance and flexible underwriting.
- 2.25% down payment
requirement for loans over $50,000;
- 1.25% downpayment requirement for
loan under $50,000;
- No monthly mortgage insurance
- A one-time,
1% loan guarantee fee that can be added to your financed loan
- HUD underwriters
and Loan Guarantee Specialists are familiar with the unique
issues and circumstances that Native Americans face when trying to obtain a mortgage
in Indian Country.
The Section 184 Loan Provides
You With Numerous Options to Suit Your Needs
- Purchase of an existing
home
- Construction of a home (stick-built or a manufactured home on a permanent
foundation)
- Rehab loans
- Purchase and rehab
- Refinancing
(Rate and Term, Streamline, Cash Out)
Getting
Started
To qualify for a home loan, its recommended (but it's not mandatory)
that applicants first find out if there are homebuyer education classes available
through their tribe, housing department and/or in their community.
Homebuyer
classes prepare you for the home buying process, so that when you meet with a
lender you'll have a better understanding of what it takes to qualify for a home
loan.
Homebuyer
Counseling Resources
Meeting with a Lender
To
apply for a 184 loan, you must contact a HUD-Approved Section 184 lender. Download
the Section 184 participating lenders list.
Program
Overview
Homeownership for Native Americans
In 1992, Congress
established the Section 184 Indian Home Loan Program. The program was designed
to offer homeownership and housing rehabilitation opportunities for eligible Native
American individuals, families, tribes and tribally designated housing entities
(including Indian Housing Authorities) on their native lands and within an approved
Indian area. Loans
across the nation
Why a Loan Program Specific to Native Americans?
Because of the unique
status of Indian lands, Native American homeownership is an underserved market.
The Section 184 Program was designed to improve access to capital for Native Americans
and provide private funding opportunities for tribal housing agencies.
How
Does Section 184 Work?
HUD guarantees the mortgage loan made to eligible
borrowers. The loan guarantee assures the lender that its investment will be repaid
in the event of a foreclosure. The borrower pays a 1% loan guarantee fee at closing
which may be financed in the mortgage or paid in cash. The borrower applies for
the loan with a participating lender. If leasing tribal land they work with the
tribe and the Bureau of Indian Affairs to obtain an approved 50 year lease. The
lender then evaluates the necessary loan documentation and submits the loan for
approval to the HUD Office of Loan Guarantee. Frequently Asked
Questions?
Who is Eligible for a Section 184 Loan?
- American
Indians or Alaska Natives who are enrolled members of a federally recognized tribe
- A
member of an Alaska Village and Regional Corporation established pursuant to the
Alaska Native Claims Settlement Act
- An Indian tribe
- A Tribally
Designated Housing Entity (TDHE)
- An Indian Housing Authority (IHA)
How
Can You Use the Section 184 Loan Guarantee?
Individuals, tribes, TDHEs
and IHAs can use the Section 184 Loan for:
- Acquisition and/or rehabilitation
of existing housing
- Construction of new housing, including manufactured
housing affixed to a permanent foundation
- Refinancing
Eligibility
is limited to single-family housing (1-4 units), and fixed-rate loans for 30 years
or less. Section 184 cannot be used for commercial structures or with Adjustable
Rate Mortgages (ARMs). Tribes, TDHEs or IHAs can borrow funds to develop rental
housing or to build single-family homes that are subsequently sold (or assumed)
by eligible borrowers.
Lender Participation
How
Can Lenders Participate?
Loans are originated and serviced by lenders
that have completed Section 184 training and are: - Approved by HUD/ONAP
to originate Section 184 loans
- Approved by HUD/FHA for participation
in the single-family mortgage insurance program
- Authorized by the Veterans
Administration (VA) to originate automatically guaranteed housing loans
- Approved
by the Department of Agriculture to make loans for single-family housing
- Supervised,
approved, regulated or insured by any agency of the federal government Tribal
loan funds, credit unions, and CDFIs are encouraged to apply to be Section 184-approved
lenders based on past lending experience.
Are Guaranteed
Loans Marketable?
Yes! A Section 184 guaranteed loan, including
the security given for the loan, may be sold or assigned by the lender to any
financial institution. However, it is subject to examination and supervision by
an agency of the federal government or of any state.
A strong secondary
market exists for Section 184 loans. Fannie Mae, Freddie Mac, Ginnie Mae, some
state housing financing agencies, and some federal home loan banks can purchase
Section 184 loans.