Native American Home Loans In Laredo

The Housing and Community Development Act of 1992 created the Section 184 Loan Guarantee Program to make it easier for Native Americans who live on reservations to obtain a mortgage. 

The HUD-184 loan has some of the lowest down payment requirements on the market. For loans of $50,000 or more, a 2.25 percent down payment is required, while a 1.25 percent down payment is required for loans of less than $50,000. A one-time guarantee fee of 1.5 percent is also paid to the government. This cash could originate from your savings, investments, or family gifts. Additionally, tribal assistance is accepted.

What is the HUD Section 184 Home Loan Program?

The HUD-184 Lending program is a government-backed loan program run by the Department of Housing and Urban Development. It was developed specifically so Native American tribal members could access flexible mortgage financing.

Section 184 financing enables borrowers to buy a property with a modest down payment and flexible underwriting. Section 184 loans may be utilized for a new building, remodeling, purchasing an existing home, or refinancing on and off native lands.

There is no minimum credit score requirement for the HUD-184 mortgage loan program. Unlike other mortgage programs, borrowers with marginal credit are not subject to higher interest rates.

How does the Native American Home Loan Works?

The Section 184 home mortgage loans made to Native Americans are insured by the Office of Loan Guarantee, a division of HUD’s Office of Native American Programs. In the case of a foreclosure, the loan program ensures the lender that its investment will be fully reimbursed.

The loan is only available for single-family residences with fixed rates of 30 years or less. Section 184 financing is unavailable for commercial properties or adjustable-rate mortgages (ARMs). The maximum loan amount varies according to the county.

If the property is located on tribal trust land, the qualifying buyer works with HUD and the Bureau of Indian Affairs to establish the house as a leasehold estate, making it a leased entity for the duration of the mortgage plus ten years. The mortgage requires approval from both departments, and in the event of failure, the lender will seize the lease instead of the property itself. Because the property belongs to the Tribe and is part of the Trust, the lender is not entitled to sell it to anybody other than a qualified tribe member, the Tribe, or the Indian Housing Authority.

The Borrower must speak with the Tribe and the Bureau of Indian Affairs before applying for a Section 184 loan from a participating lender and leasing tribal land. After carefully evaluating the relevant loan paperwork, the lender submits the loan for approval to HUD’s Office of Loan Guarantee.

Eligibility Requirements of HUD Section 184 Loan

To be eligible for a Section 184 loan, you must be an Alaskan or a member of a Native American tribe. The tribal leadership determines who is allowed into the Tribe and frequently issues a card or letter as proof. When applying for a Section 184 loan, tribe membership documents will be required. The participating Tribes must decide whether Section 184 eligibility applies to specific counties or the entire state.

Apply for a Native American Home Loan in Laredo

If you are a member of a Native American tribe and believe you may qualify for a Section 184 loan, Capital Home Mortgage may help. Call (956) 307-3422 to speak with one of our Home Loan Specialists about Laredo Native American Home Loans.