The Section 184 Loan Program was designed to provide access to mortgage financing to Native American and Alaskan Native tribal members. Section 184 home loans are guaranteed 100% by the Office of Loan Guarantee within HUD’s (U.S. Department of Housing and Urban Development) Office of Native American Programs.
This guarantee encourages national and local banks to provide mortgage loans to Native Americans. The Office of Loan Guarantee works with a national network of lenders to increase Native access to home financing and to improve the value of Native investments.
Why Should I Use the Section 184 Loan?
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
- Manual Underwriting: The Program utilizes a hands-on approach to underwriting and approval opposed to automated decision-making tools.
- Growing National Network of Approved Lenders: Our network of approved lenders includes national companies and local banks to suit your needs. Our Lenders have also been trained on the unique circumstances of Native homeownership.
- Section 184 Upfront Loan Guarantee Fee and Annual Mortgage Insurance: A one-time 1.5% up front guarantee fee is paid at closing and can be financed into the loan. In addition, loans with a loan to value of 78% or greater will be subject to an annual .25% mortgage insurance premium.
- Protection from predatory lending: Our Program monitors the fees our approved lenders can charge Native borrowers. Section 184 loans cannot be used for Adjustable Rate Mortgages (ARMs).
What Can I use the Section 184 Loan for?
You can use the Section 184 Loan to:
- Purchase an Existing Home
- Construct a New Home (Site-Built or Manufactured Homes on permanent foundations)
- Rehabilitate a Home, including weatherization
- Purchase and Rehabilitate a Home
- Refinance a Home (Rate and Term, Streamline, Cash Out)
Section 184 loans can only be used for single family homes (1-4 units) and for a primary residence.
**All information taken from U.S. Department of Housing and Urban Development (HUD)**
Cru was an S 184 expert, and works with the best lenders in the state of New Mexico.
Contact her today for expert advice on how to get started.