Native American Home Loans In Colorado

The Section 184 Loan Program, managed by HUD’s Office of Native American Programs, was created to give Native American and Alaskan Native tribal members access to mortgage financing. The Office of Loan Guarantee guarantees 100% of Section 184 house loans to the lender in case of foreclosure and claim.

Section 184 Background and Purpose

The Housing and Community Development Act of 1992 established the Section 184 Indian Home Loan Guarantee Program to address the shortage of mortgage lending in Indian Country. Historically, Native American homeownership has been underserved. Land under trust for a tribe cannot be mortgaged, and land in trust for an individual requires approval from the Bureau of Indian Affairs (BIA) before a lien is put on the property. Lenders have found it difficult to issue home loans to individual Native Americans because they lack the power to mortgage and foreclose on a home or establish a lien on individual trust property. 

The Section 184 Indian Home Loan Guarantee Program, in collaboration with an expanding network of private sector and tribal partners, seeks to increase access to capital for Native Americans while providing private funding opportunities for tribal housing agencies.

Borrower Criteria of Section 184 Home Loan Guarantee

Section 184 Indian Home Loan Guarantee Program loans can be utilized for new construction, renovation, acquiring an existing home, or refinancing on and off native territory. To help enhance access to financing, the Office of Loan Guarantee within HUD’s Office of Native American Programs insures Section 184 residential mortgage loans provided to Native borrowers. The initiative encourages lenders to serve Native communities by providing a 100 percent guarantee. This raises the marketability and value of Native assets while also strengthening Native communities’ financial standing.

• Income Limits

There are no income limits for the HUD Section 184 program.

• Credit

Interest rates are determined by market rates rather than an applicant’s credit score. There is no minimum credit score needed to participate in the program. However, the borrower must be creditworthy in all instances. Alternative credit is permitted but not as a replacement for regular credit. When delinquent accounts appear on a borrower’s credit report, underwriters must use their best judgment and experience to determine whether the late payments resulted from the applicants’ disregard for financial obligations, inability to manage them, or factors beyond their control.

• Occupancy

The program is for primary residences only. No second homes or investment properties are allowed.

• Special Populations

Borrowers who want to use the Section 184 Indian Home Loan Guarantee Program must be a member of a Federally Recognized Tribe or an Alaska Native. 

• Property Type

Only single-family dwellings with one to four units are permitted. Homes must be of standard quality and adhere to all applicable building and safety requirements. Furthermore, homes must be small in size and style.

Loan Criteria

• Loan Limits

The maximum loan amount cannot exceed 150 percent of the current FHA mortgage limits. FHA mortgage limits differ depending on the number of units and the county or Metropolitan Statistical Area in which the property is located. Every year, HUD publishes a Mortgagee Letter stating the new mortgage restrictions. 

• Loan-to-Value Limits

The LTV on loans exceeding $50,000 is 97.75 percent, and the LTV on loans under $50,000 is 98.75 percent.

• Down Payment Sources

No requirement for personal money. Gifts and down payment assistance programs from organizations with a clearly defined and documented interest in the applicant are allowed. 

• Debt-to-Income Ratios

At most, 41 percent, or 43 percent, with two or more compensating factors (lower loan-to-value ratio, limited rise in housing costs, solid credit history, additional income not utilized as qualifying income, significant cash reserves).

Apply for a Section 184 Home Loan Guarantee Program

If you are a Native American and believe you might be eligible for a Section 184 loan, the mortgage experts at Capital Home Mortgage can help.

We provide no-cost consultations, respond to any questions about a Section 184 home loan program, and assist you at every step. Call our Native American Team at (303) 226-1177 immediately!