If you’re an American Indian or Alaska Native, you may be able to participate in a special Native American home loan program designed to help you purchase, construct, rehabilitate or refinance your home easier. This program is known as the Section 184 Indian Home Loan Guarantee Program. Keep reading – I’m going to explain what it is, who qualifies and how you can participate.
What is Section 184?
Section 184 is a loan guarantee program offered by the US Department of Housing and Urban Development’s Office of Native American Programs.
As a loan guarantee program, Section 184 basically tells the lender that they will be paid for the loan even if you are unable to make payments on it. Since the lender doesn’t need to worry about losing their investment, they’re more willing to work with low income borrowers!
Why should I consider a Section 184 loan?
There are many benefits to using a Section 184 loan to purchase your home.
Down payments are incredibly low! Loans over $50,000 require a 2.25 percent down payment. Loans less than that require just 1.25 percent! These are some of the lowest rates I’ve ever seen.
Interest rates are based on market rates, not credit scores. This is a huge benefit to most low income borrowers!
Repair costs can be included in your Section 184 loan! Weatherization and rehabilitation can be included in a Section 184 loan.
Manual underwriting ensures that each loan application is given individual attention from a real person. Automatic underwriting is not allowed with the Section 184 program.
Home types can vary with this program. Section 184 will finance existing home purchases or new home construction (including manufactured homes). They will help you fix up a home you’re buying. They’ll also help you rehabilitate or refinance a home you already own.
Who qualifies for Section 184 loans?
Section 184 Indian Home Loan Guarantee Program is exclusively for American Indians and Alaskan Natives. You must be a member of one of these federally recognized tribes in order to qualify for this program.
In addition, the home to be purchased must be in an eligible area. Although areas are NOT limited to tribal lands, they must be located in a participating state and county.
The following states are “full approval states.” This means that any home in any county in the state will qualify for financing through the Section 184 Indian Home Loan Guarantee Program.
- Alaska
- Arizona
- California
- Colorado
- Florida
- Idaho
- Indiana
- Kansas
- Maine
- Massachussetts
- Michigan
- Minnesota
- Montana
- Nevada
- New Mexico
- North Carolina
- North Dakota
- Oklahoma
- Oregon
- South Carolina
- South Dakota
- Utah
- Washington
- Wisconsin
There are a dozen more states with counties that qualify for Native American home loans. However, you will have to choose a home in one of the eligible counties if you want to participate in this program. The states with partial approval are:
- Alabama (Baldwin, Elmore, Escambia, Mobile, Monroe, Montgomery, Washington counties only)
- Connecticut (Fairfield, Litchfield, New London counties only)
- Iowa (Black Hawk, Linn, Marshall, Monona, Polk, Pottawattamie, Poweshiek, Tama, Woodbury counties only)
- Illinois (Cook, DuPage, Kane and Lake counties only)
- Louisiana (Allen, Avoyelles, Concordia, Evangeline, Grant, Iberia, Iberville, Jefferson Davis, La Salle, Rapides, Saint Mary and Washington counties only)
- Missouri (Barry, Jasper, Lawrence, McDonald, Newton counties only)
- Mississippi (Attala, Jackson, Jasper, Jones, Kemper, Leake, Neshoba, Newton, Scott, Winston counties only)
- Nebraska (Boyd, Burt, Cuming, Dixon, Douglas, Hall, Holt, Know, Lancaster, Madison, Platte, Irchardson, Sarpy, Sheridan, Stanton, Thurston, Wayne counties only)
- New York (all counties EXCEPT Bronx, Kings, New York, Queens, Richmond)
- Rhode Island (Washington county only)
- Texas (El Paso and Hudspeth counties only)
- Wyoming (Fremont and Hot Springs counties only)
How do I sign up for Native American home loans?
You will need to meet with a Section 184 approved lender to begin the application process. Here’s a list of approved lenders from the HUD website!