Frequently Asked Questions for the Section
184 Indian Housing Loan Guarantee Program
is the Section 184 Loan Guarantee Program?
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.
is there a lack of mortgage lending in Indian country?
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.
does the Section 184 program correct the problem?
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.
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.
trust land the only land eligible for a Section 184 loan
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 (see
PIH Notice 2004-19) are allowed under Section 184.
What must a tribe do to participate in the HUD
184 Loan Guarantee Program?
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
- If there is tribal trust land, ensure acceptable lease is
- 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
Office of Loan Guarantee
Office of Native American Programs
1999 Broadway, Suite 3390
Denver, CO 80202 or call
Phone: (303) 675-1600, 1-800-561-5913
do I appraise homes on Native American lands?
FHA 4150.2 handbook (issued May 20, 1999), provides guidance
for appraisers on how to appraise existing, proposed and new construction
of one to four family homes on tribal trust, allotted and fee simple
lands under HUD's Office of Native American Program (HUD/ONAP) Section
184 Loan Guarantee Program. You may obtain a copy of the Handbook
4150.2, Valuation Analysis for Home Mortgage Insurance online
or by calling: 1-800-767-7468