Section 184 Loan Frequently Asked Questions
Section 184 can help tribes and native families achieve home ownership. If you’re on this page, you have questions about the loan process. At Native Home Loans, we have the answers to your questions. Our expert loan agents assembled this guide to answer the more common questions. If you we don’t cover your question below, feel free to contact us.
Section 184 Indian Housing Loan Guarantee Program FAQ’s
• What is the the purpose of HUD Section 184?
• How does HUD Section 184 work?
• Is the HUD Section 184 Loan Guarantee available for non-trust land?
• What can a HUD Section 184 loan be used for?
• How Can a Tribe Participate?
• How much can I borrow?
• Do I have to be enrolled with my Tribe to be eligible for the HUD 184 Program?
• My Spouse / co-borrower is non-Native. Am I eligible for the HUD 184 Program?
• How long does the loan process take?
• Where can I use the HUD 184 Program and do I have to live on the Reservation?
• Is there a minimum credit score?
• I have medical collections. Am I eligible for the HUD 184 Program?
• Does HUD 184 Program have loan limits?
• Does HUD 184 Program have income limits?
• I have had a short sale or Foreclosure. Am I eligible for the HUD 184 Program?
• I have a Bankruptcy on my credit. Am I eligible for the HUD 184 Program?
• I have more questions!
What is the purpose of HUD Section 184?
The Department of Urban Development created the section 184 loan program in order to create a way to help native tribes and families receive the necessary funds to improve living conditions by building and maintaining homes.
Due to the complicated nature of native land, it can be difficult to receive mortgage loans. In an effort to protect Indian land from being seized, the United States holds many pieces of Indian Country in Trust. Trust lands cannot be mortgaged and any liens placed on the property must be approved by the Bureau of Indian Affairs. This does not encourage private lenders to gamble with whether or not loan seekers can pay. The crux of the problem is that lenders who offered loans on trust land cannot legally foreclose on the home when payments cannot be made.
Section 184 provided a way around this problem by providing a solution to protect lenders and ensure that native land remains in native lands.
HUD Section 184 works in two ways.
Tribal Trust Land. The tribe or individual contacts the BIA and HUD to set the home or land as a leasehold estate. The leasehold needs to be approved by the BIA and HUD. A leasehold estate makes the property a leased entity while the mortgage is being repaid and 10 years after the last payment. If the loan is defaulted, the lender seizes the lease rather than the land.
Allotted Trust Land. Allotted trust land is held by individuals. The individual will not need approval for a leasehold estate. However, the BIA and HUD must approve the loan application. With no leasehold estate, the home itself can be seized in foreclosure.
In order to ensure native land remains in native hands, lenders must follow certain guidelines when they seize the property. The lease can only be liquidated after offering to transfer it to the tribe, and eligible tribe member or the Indian Housing Authority. If the home is foreclosed, the land cannot be sold to anyone other than an eligible tribe member, the tribe, or the Indian Housing Authority.
Yes, tribes may choose to designate locations where their tribal members live off reservation. These areas once approved will be included in the Section 184 program.
Up until 2012, The HUD Section 184 Home Loan Guarantee granted 15,000 loans to various individuals, tribes, and TDHEs . Since then that number has continued to climb.
Section 184 was created to increase home ownership in Indian communities. This means that loans are not granted for secondary homes or investment projects. If you are a tribe, individual, or TDHE who is seeking a loan on a single primary residence, Section 184 Loans allows you to:
- Purchase a new home
- Construct a new home
- Renovate a home
- Purchase and renovate an existing home
- Refinance a home
Before Tribes or tribe members can participate, the tribe must have:
- Eviction and Foreclosure Processes
- A system that will enforce the processes
- Systems that allow HUD or private members access to Native land
- Acknowledgement that failure to enforce processes will result in HUD no longer guaranteeing loans.
Section 184 loan limits are based on a number of factors:
- Where you live
- Current income
- Current debts
In order to receive your loan limit, please contact one of our agents.
For any questions or concerns not addressed in this guide, please refer to our contact page or call us at 855-288-3123.
You must be an enrolled member of a Federally Recognized Tribe.
Only one of the occupying borrowers needs to be an enrolled Tribe member.
There are many variables that factor into the mortgage loan process. Once we have your accepted purchase contract and all requested credit documents most loans are completed within 30-45 days.
The program is open to enrolled Tribal Members on or off reservation in approved areas. See link below for a map of eligible areas for HUD 184.
Credit is important, but you’re not judged on your score.
All collections must be paid in full at time of application. Medical collections that are to be paid by I.H.S. or Tribal Health can be excluded with a letter from the agency.
Please follow the link below for current HUD 184 Loan limits by State / County posted on HUD’s website:
An applicant that had a mortgage foreclosed is not eligible for another government loan until 3 years after the date the insurance claim was paid to the lender. If the applicant has previously had a Section 184 insured home foreclosed upon, they are permanently ineligible for a future Section 184 loan. Mortgage Short Sale- Applicants that were in default at the time of the short sale (or pre-foreclosure sale/deed in lieu of foreclosure) are not eligible for another government loan until three (3) years from the date of the sale. If the applicant has previously had a Section 184 insured home end in a short sale, they are permanently ineligible for a future Section 184 loan.
A bankruptcy must have been discharged fully, and the applicant must have reestablished good credit and demonstrated an ability to manage financial affairs. There must be at least 2 years between the discharge of the bankruptcy and the mortgage application.
Please call us at 855-288-3123 and we will be happy to answer all of your questions.