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Congress established the Section 184 Indian Housing Loan Guarantee Program in 1994. The program is designed to offer home ownership, property rehabilitation, and new construction opportunities for eligible tribes, Indian Housing Authorities and Native American individuals and families wanting to own a home on their native lands.
The Section 184 Loan Guarantee Program was created by the Housing and Community Development Act of 1992 to address the lack of mortgage lending in Indian Country. The 184 program offers a loan guarantee to private sector lenders who make mortgage loans to eligible borrowers for homes located in Indian Country.
The Indian Home Loan Guarantee Program (Section 184) is funded annually by Congress. The program is offered to Native Americans and provides homeownership opportunities throughout Indian Country in the United States. The program was developed specifically for Native Americans seeking homeownership opportunities on fee simple land in an Indian area, on Tribal Trust Land, or on individually allotted land on a reservation.
The 184 program staff is responsible for program development, monitoring and quality control, loan underwriting, program training, and marketing. In addition, the Loan Guarantee staff serve as a liaison between lenders, government agencies, tribal members, and other entities instrumental in making this program a success.
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Much of the land in Indian Country is held in trust by the United States government for the benefit of a particular tribe or individual Native American. Land held in trust for a tribe cannot be mortgaged, and land held in trust for an individual must receive approval from the Bureau of Indian Affairs (BIA), before a lien is placed on the property. Without the ability to mortgage and foreclose on a home or place a lien on individual trust property, lenders were not willing to make home loans to individual Native Americans.
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For a home loan on tribal trust land, the eligible individual borrower leases the land property from the tribe on a lease approved by the Bureau of Indian Affairs (BIA) and by HUD to create a leasehold estate. It is the home and the leasehold interest in the homesite that are mortgaged so that in the event of a foreclosure the home and leasehold interest are what are foreclosed. The ownership of the land itself remains in trust for the tribe.
For a home loan on individual or "allotted" trust land, both HUD and the BIA must approve the loan applicant. In the event of a default by a borrower on a 184 guaranteed loan on either tribal or individual trust land, the lender or HUD can only pursue liquidation of the loan after offering to transfer the loan to an eligible tribal member, the tribe or the Indian Housing Authority serving the tribe. In the event of a foreclosure, the lender or HUD can not sell the property to anyone but an eligible tribal member, the tribe or the housing authority serving the tribe. Thus the unique status of the trust land is protected.
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No. Land located in an Indian area or Alaska Native area are eligible locations for a 184 guaranteed home loan. Fee simple lands within an approved Indian area are allowed under Section 184.
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A tribe with tribal court jurisdiction over the property needs to have the following in place:
Foreclosure Procedures
Eviction Procedures
Procedures giving the HUD Guaranteed Loan first lien priority or otherwise ensuring that the guaranteed loan will be satisfied before all other property debts (except tribal taxes)
Ensure that HUD and/or private lenders have access to tribal lands for the purpose of servicing and evaluating guaranteed properties.
If there is tribal trust land, ensure acceptable lease is in place.
Understand that if eviction and foreclosure procedures are not enforced, the Department will cease making new loan guarantees within the tribe's area of jurisdiction
A copy of the ordinances/procedures, proposed lease and the tribal resolution enacting these ordinances/procedures should be mailed to:
Office of Loan Guarantee
National Office of Native American Programs
1999 Broadway, Suite 3390
Denver, CO 80202 or call
Phone: (303) 675-1600, 1-800-561-5913
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Available on tribal trust, individual allotted trust or fee simple land in an Indian operating area
Low down payment of 1.25% to 2.25% based on the lower of the appraised value or cost to acquire the home
Refinance eligibility
The maximum loan is 150% of the FHA mortgage limit subject to appraised value and down payment requirements
1% financeable guarantee fee at closing (no private mortgage insurance or monthly (MIP). It is the lowest cost of any government guarantee or conventional insurance program in Indian country. There is no monthly premium for a 184 loan.
Eligibility includes: New construction, rehabilitation and purchase of an existing house
One qualifying ratio: 41% total debt to gross income ratio which can be exceeded with compensating factors.
Single close construction (permanent) loan where only one closing is required. Monthly mortgage payments begin after closing. At closing the amount allocated for construction or rehabilitation plus a 5-10% contingency and up to 6 months mortgage payments are placed in an escrow account and are drawn down as the work is satisfactorily completed.
100% guarantee to the lender in the event of a foreclosure and claim.
A strong secondary market exists: Fannie Mae, Freddie Mac, FHLB of Seattle, Ginnie Mae and some state housing finance agencies.
Loans may be assumed by a creditworthy borrower that meets program eligibility.
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1. Source: U.S. Department of Housing and Urban Development
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