Section 184 How Does it Work?

Section 184 How Does it Work?

How-Does-Section-184-WorkIf the land that you are wanting to build a house on, purchase and existing house, or renovate is on tribal trust land, the eligible buyer works with the Bureau of Indian Affairs and HUD to set up the home as a lease hold estate. This turns the property into a leased unit for the duration of the mortgage and for 10 years after that. Both the Bureau of Indian Affairs and HUD must approve the mortgage. It’s the lease, not the land itself that the lender seizes if the loan is defaulted. The land still belongs to the tribe and is a part of the trust that is held by the government. The lender cannot sell the land to anyone other than an eligible tribe member, the tribe, or the Indian Housing Authority.

Program Overview

The Section 184 program is a home mortgage federal loan guarantee for enrolled members of federally recognized tribes or
for Tribally Designated Housing Entities.

One of the obstacles to lending in Indian country has been the unique status of Indian lands, which generally are held in trust. Lenders interested in making home loans to Native American borrowers often are unable to obtain legal assurances that the property purchased with the loan can be reclaimed in the case of default.

How Does Section 184 Work?

To help increase home ownership in Indian country, the Section 184 program provides a 100 percent guarantee on all housing loans made by private lenders and tribal housing agencies to American Indian and Alaska Native borrowers.
The program is administered by the Office of Loan Guarantee within HUD’s Office of Native American Programs. HUD works with a broad group of private lenders and tribal partners to promote access to capital through this program. Potential borrowers are advised to take home-buyer financial education courses, which often are offered by home-buyer counseling services.

As of January 2012, this program has guaranteed over 15,000 loans (almost $2.5 billion dollars in guaranteed funds) to individuals, Tribes, and TDHEs.

Numerous Options to Suit Your Needs:

  • How Does Section 184 Work?Purchase of an existing home
  • Single Construction Loan
  • Rehab loans
  • Purchase and rehab
  • Loans are assumable by someone wishing to purchase your home (buyer must be credit worthy)
  • The maximum loan is 150% of the FHA mortgage limit subject to appraised value and down payment requirements
  • 1% finance-able guarantee fee at closing (no private mortgage insurance of monthly PMI.) it is the lowest cost of any government
  • Guarantee or conventional insurance program in Indian Country.

Program Facts

  • No maximum income limits
  • 100% guarantee to lender
  • Low down payment
  • Both New & existing houses are eligible
  • Nationwide program on tribal trust land
  • Refinancing available
  • Flexible underwriting
  • 1% guarantee fee at closing

Interested in applying for a Section 184 Home Loan? At USDA Loans Direct we will assist you every step of the way!


Apply Now Or, if you’d prefer, simply give us a call today!