Abilene Native American Home Loans

Homeownership among Native Americans has been a historically underserved market, partly because of the unique nature of Indian lands in Trust. However, thanks to the Section 184 Program, lenders can now finance home purchases on native lands, making homeownership more accessible for Native Americans and Alaskan Natives. 

Capital Home Mortgage is a full-service mortgage company offering competitively-priced Native American Home Loans in Abilene, TX. As a direct mortgage lender, we have complete authority over the whole lending process. Our simplified workflow and extensive experience in HUD-184 loans allow us to provide our clients with a pleasant and stress-free homebuying experience.

The Section 184 Loan Program

Mortgages under Section 184 can be used to buy property within and outside Native American reservations. These mortgages were created to give Native Americans and Alaska Natives a more affordable way to purchase a home on tribal land. Many members of tribal communities would be denied the opportunity to build wealth through homeownership if not for this program.

HUD-184 Loan Eligibility

Native Americans who are members of federally recognized tribes can apply for loans through the Section 184 Loan Program, given that they can provide proof of tribe membership or citizenship.

One of the significant benefits of this loan program is that only one of the applicants needs to be a tribal member. You can still qualify for the HUD-184 loan program even if your non-tribal-member spouse is your household’s sole provider/income earner.

What You Need to Know About Section 184 Loans

If you meet the eligibility requirements and are interested in obtaining a Section 184 loan, here are some essential things to know/consider before actually applying for the mortgage:

1. Credit Score Requirements 

There is no required minimum credit score for a HUD-184 loan, making it accessible to borrowers who may otherwise be denied due to poor credit or lack of credit history. Moreover, borrowers with less-than-perfect credit histories are not penalized with higher interest rates like most mortgage programs. 

2. Debt-to-Income Ratio

For the most part, lenders look at borrowers’ debt-to-income ratio, typically set at 41%, to determine how much money they can afford. 

3. Borrower Income Limit

There are no income requirements for the HUD-184 Loan as long as the borrower can prove their ability to make payments. 

4. Down Payment and Closing Costs

The down payment requirements for a HUD-184 loan are among the industry’s lowest. The minimum down payment for loans over $50,000 is 2.25%, while the minimum down payment for loans under $50,000 is 1.25%. And while the government requires a one-time guarantee fee of 1.5%, the money can come from various sources, including investments, savings, or gifts from loved ones. Tribal assistance is also accepted. 

5. For Both First-time and Repeat Buyers 

Unlike other low-down-payment mortgage programs, this one is available to first-time and repeat buyers. Qualified borrowers who qualify may participate in the program multiple times but can only have one Section 184 Loan at a time. 

6. Buy, Build, Renovate, Refinance

The HUD-184 Loan can be used for the purchase, construction, or improvement of a primary residence by eligible borrowers. The favorable terms of HUD-184 loans are a significant draw for many homeowners who want to refinance their current mortgages. 

7. Manual Underwriting

HUD-184 loans are manually reviewed in great detail, as opposed to being submitted to a computer that would then approve or disapprove the Loan based solely on numbers. Any luck will increase your chances of getting a mortgage that works for you.

Is It a Good Option for Native American Homebuyers?

A HUD-184 loan is the best option for Native American homebuyers because of its favorable terms and flexibility. The thing is, a Section 184 loan can be hard to secure. 

If you are a member of a federally recognized Native American tribe, the loan specialists at Capital Home Mortgage can help you obtain a Section 184 loan. Whether you’re interested in a Section 184 mortgage or some other type of Loan, we’re here to help. Call our Native American Team today at (800) 536-8171!