What is the Section 184 Loan Guarantee Program?
The Section 184 Loan Guarantee Program was designed to increase lending to Native American and Alaskan Native communities that were traditionally underserved by financial institutions. The Section 184 mortgage loans are guaranteed 100% by the Office of Loan Guarantee within HUD's Office of Native American Programs. This guarantee encourages national and local lenders to extend financing to Native Americans and increases the marketability of their current assets and future investments.
Our staff works with a wide network of Tribal and Private Sector partners to increase Native access to financing and their ability to leverage this financing and current assets to strengthen their community's financial standing. In conjunction with our Title VI Leverage Finance instrument, The Office of Loan Guarantee's Section 184 Loan Guarantee Program continues to successfully expand financing opportunities to Native Communities.
Why Should a Tribe Promote Section 184 Loans to our members?
The success of the Section 184 Loan Program has significantly improved how Native investments are valued by financial institutions. The Office of Loan Guarantee (OLG) has paved the way for 184 approved lenders to market directly to Native Communities and extend greater financing opportunities to Tribal members.
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
- Flexible Underwriting: Our underwriters understand the unique issues and circumstances that Native Americans face when trying to obtain a mortgage in Indian Country.
- Growing National Network of Approved Lenders: Our network of approved lenders includes both large 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 up front 1.5% guarantee fee is paid at closing and can be financed into the loan.
- Protection from predatory lending: Our program reviews fees our approved lenders charge to ensure the amounts are reasonable and comply with the program standards. Section 184 loans cannot be used for Adjustable Rate Mortgages (ARMs).
- Low Risk: Despite the economic downturn, lenders have not reduced their activity in the Section 184 loan market as they have in other markets since our loans are guaranteed 100%.
- Knowledgeable Staff: Our staff understands the unique circumstances associated with lending on Native Lands and work with borrowers to avoid default and foreclosure.
Participating Tribes and Eligible Areas
The Section 184 Loan is synonymous with home ownership in Indian Country.
Participating Tribes determine the areas where the Section 184 loan can be used.
How Can a Tribe Participate in the HUD 184 Loan Guarantee Program?
A Tribe interested in participating must have the following as part of their Tribal Laws:
- Tribal Court Jurisdiction over Real Property
- Defined Eligible Area (usually the Tribal formula area)
- Foreclosure Procedures
- Eviction Procedures
- Leasing Procedures
- Tribal Trust and/or Allotted Trust Land Leases
- Provision showing HUD 184 Guaranteed Loan as first lien priority.
- Provision granting HUD and/or private lenders access to tribal lands for the purpose of servicing guaranteed properties.
- Acknowledgement that should eviction and foreclosure procedures not be enforced, the Office of Loan Guarantee will cease making new loan guarantees within the tribe's area of jurisdiction
A copy of the ordinances, procedures, proposed lease(s) and tribal resolutions enacting these above items should be mailed to:
Office of Loan Guarantee, Attn: Director
National Office of Native American Programs
US Department of Housing and Urban Development
471 7th Street SW, Room 5143
Washington, D.C. 20410
How Can a Tribe Learn more about Promoting Section 184 Loans?
The Office of Loan Guarantee offers training to help Tribes, TDHEs, IHAs, and CDFIs to assist their members in securing Section 184 home loans.
Using Section 184 for Community Development
Tribes and TDHEs can use Section 184 Loans to develop rental housing or to build single-family homes that are subsequently sold (or assumed) by eligible borrowers.
The Section 184 Loan can be used for:
- Acquisition of existing housing
- Rehabilitation of existing housing
- Construction of new housing, including manufactured housing affixed to a permanent foundation
- Refinancing, including rate and term, streamline, cash out
Section 184 Loans are to be used only for single-family housing (1-4 units), and can only be fixed-rate loans for 30 years or less. Section 184 cannot be used for commercial structures or with Adjustable Rate Mortgages (ARMs). For Tribes interested in Commercial Financing see our Title VI Program.
Find an Approved Section 184 Lender
Once you are ready to apply for a Section 184 loan, contact one of our approved lenders. All of our approved lenders have undergone training on the unique circumstances of Native Homeownership.
What Can a Tribe Do To Assist Tribal Members in Becoming Home Owners?
To support their members in becoming home owners, many Tribes offer:
- Infrastructure Development: Providing roads, water and sewer, electricity or Internet cabling, or gift monies toward these projects
- Down Payment Assistance: This could be in the form of a soft second, IDP, or Gift funds
- Home Buyer Counseling: Offer classes on financial literacy, saving & investing, and house maintenance to better prepare tribal members for home ownership
- Surveying: Surveying tribal lands
- Leasehold Recording: The Tribe leases land to the Tribal member for homeownership
- Planned Development Design: Developing architectural and housing development plans to provide scaled and unified growth on Trust lands
- Green Building Incentives: Offering financial incentives for green house design and weatherization
Are you a Borrower? View Borrower Resources.
Are you a Lender or CDFI? View Lender Resources.