What is the Section 184 Loan Guarantee Program?
The Section 184 Indian Home Loan Guarantee Program is a home mortgage specifically designed for American Indian and Alaska Native families, Alaska Villages, Tribes, or Tribally Designated Housing Entities. Section 184 loans can be used, both on and off native lands, for new construction, rehabilitation, purchase of an existing home, or refinance.
Because of the unique status of Indian lands being held in Trust, Native American homeownership has historically been an underserved market. Working with an expanding network of private sector and tribal partners, the Section 184 Program endeavors to increase access to capital for Native Americans and provide private funding opportunities for tribal housing agencies with the Section 184 Program.
To help increase Native access to financing, the Office of Loan Guarantee within HUD’s Office of Native American Programs, guarantees the Section 184 home mortgage loans made to Native Borrowers. By guaranteeing these loans 100%, we encourage Lenders to serve the Native Communities. This increases the marketability and value of the Native assets and strengthens the financial standing of Native Communities.
Section 184 is synonymous with home ownership in Indian Country. As of 2014, the Section 184 program has guaranteed over 24,000 loans (almost $4 billion dollars in guaranteed funds) to individuals, Tribes, and TDHEs.
There are many advantages to using a Section 184:
- Low Down Payment: 2.25% on loans over $50,000 and only 1.25% on loans under $50,000
- Low Interest Rates: based on market rates, not on applicant’s Credit Scores
- Manual Underwriting: The Program utilizes a hands-on approach to underwriting and approval opposed to automated decision-making tools.
- Growing National Network of Approved Lenders: Our network of approved lenders includes national companies and local banks to suit your needs. Our Lenders have also been trained on the unique circumstances of Native homeownership.
- No monthly mortgage insurance: a one-time 1.5% up front guarantee fee is paid at closing and can be financed into the loan.
- Protection from predatory lending: Our Program monitors the fees our approved lenders can charge Native borrowers. Section 184 loans cannot be used for Adjustable Rate Mortgages (ARMs).
- Knowledgeable Staff: Our staff understands the unique circumstances associated with lending on Native Lands and we work with borrowers to achieve home ownership and to avoid default and foreclosure.
You can use the Section 184 Loan to:
- Purchase an Existing Home
- Construct a New Home (Site-Built or Manufactured Homes on permanent foundations)
- Rehabilitate a Home, including weatherization
- Purchase and Rehabilitate a Home
- Refinance a Home (Rate and Term, Streamline, Cash Out)
Section 184 loans can only be used for single family homes (1-4 units) and for a primary residence. Since 184 strives to increase homeownership to all Native Communities, the guarantee funds are reserved for primary residences rather than second or investment properties.
Participating Tribes determine the areas where the Section 184 loan can be used. Many states are eligible in their entirety while only select counties are eligible in other states.
It is currently available anywhere in the state of AZ off Nation. It is not currently available on the Tohono O’odham Nation, but is very close to being available.
To use the Section 184 Loan, you must be a currently enrolled member of a Federally Recognized Tribe.
Verification of enrollment will be required when applying for a Section 184 loan. Neither Section 184 nor our approved lenders can assist in this enrollment process. Contact your tribe for their enrollment requirements.
Before meeting with a lender, it is recommended that you prepare for the home buying process by attending a homebuyer class or counseling session. Understanding what it takes to qualify for a loan can help you prepare for meeting with a lender.
Although these classes are not mandatory, they are greatly beneficial to you. Some lenders or Tribes will even offer financial assistance to borrowers who attend these classes.
Information courtesy of hud.gov website.
More Section 184 Indian Loan Information to view or download.
Tohono O’odham Ki:Ki Association is not a Section 184 approved lender. Here is a list of Section 184 approved lenders. This is a participation list dated June 2014, Click Here If you need more information about the Section 184 please give TOKA a call at 520-383-2202