Native American Home Loan Program

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The Native American Home Loan guarantee program (section 184) is an authorized program under the Housing and Community Development Act of 1992. The program is in the form of housing loans intended to provide property rehabilitation, home ownership, refinance opportunities as also new construction. This government loan is intended for eligible Native Americans on an individual basis and for tribes, as Native American Housing Authorities.

The US government holds in trust most of the land in the Native American country. Under US law, land held in trust for a tribe cannot be mortgaged. Federal approval is needed to place lien on a property held in trust for an individual. Due to these restrictions private mortgage capital was mostly beyond reach of Native Americans. Under the Native American home loan guarantee program (section 184) created in 1984 the US congress authorized HUD to guarantee loans to the Native Americans by private lenders.

With a mortgage under Native American home loan guarantee program (section 184) a borrower can purchase a home with a small down payment and no monthly mortgage insurance and flexible underwriting. The rates are:

● 1.25% down payment required for loans below $50,000
● 2.25% down payment required for loans above $50,000
● No monthly mortgage insurance
● 1% loan guarantee fee that can be added to your financed loan on a one-time basis.

The housing loans under the Native American home loan guarantee program (section 184) provide several options through the buyer. For example:

● Purchasing an existing home
● Construction of a new home on permanent foundation or stick-built foundation
● Purchase and rehabilitation
● Refinancing (Streamlined cash -out)

Under section 84, HUD guarantees the mortgage loans be made to eligible borrowers. The lender gets an assurance under the loan guarantee that in the event of a foreclosure, its investment will be repaid. A one per cent loan guarantee fee is paid by the borrower at closing, which may be paid in cash or financed in the mortgage. The borrower then applies for a loan with a prospective lender. The loan documents are evaluated by the lender and submitted to the HUD office for loan guarantee.

An Native American tribe, an Native American housing authority (IHA), a tribally designated housing entity (TDHE), American Native Americans or Alaska natives enrolled as members of a tribe recognized by the federal government and a member of Alaska village an authorized regional corporation are eligible for a government loan under section 184. Government loans under section 184 cannot be used for commercial structures or with Adjustable Rate Mortgages.