Understanding Native American home financing

Learn about Native American Home Financing through the Federal Government’s Section 184 Program.

Native Americans have access to home financing through the Department of Housing and Urban Development. The Section 184 Loan Guarantee Program is one housing program available to Native American Indians, Alaskan Natives, Alaskan Villages, Tribes or Tribally Designated Entities. The maximum loan limits vary according to the State and County that housing is being sought in. These loans provide protection to the Lender by the full backing of the United States Government. In addition, the loans have designated areas for residence. Most states qualify as Section 184 eligible. However, the section 184 loan may not be utilized in some counties in some states; find out if your county is included in the list of participating states and counties.

The advantages to securing a Section 184 loan are that the down payment requirements are low. Loans $50,000 and under require a 2.25 percent down payment. Loans over $50,000 have a 1.25 percent down payment. Next, the interest rates are not based on the applicant’s credit score but rather on the current market interest rates. There is no monthly mortgage insurance payment. Rather, a one-time 1.5 percent guarantee up-front is paid at the time of the loan’s closing. The loan is used to secure a primary residence and are not typically utilized for purchase of a second home or investment property.

The Section 184 loan is similar to other loans offered by the Federal Housing Administration (FHA) in that the loan can be used to purchase an existing home, rehabilitate a home (including weatherization), refinance a home purchase and rehabilitate a home, or construct a new home.

In order to secure the Section 184 loan, you must be a currently enrolled member of a Federally Recognized Tribe. Homeownership counseling is highly suggested before visiting a lender to understand the steps required to pursue and maintain homeownership. Native American buyers can contact organizations in partnership with HUD on getting assistance with the homebuying process. Additionally, while not specific to the Section 184 loan, Michigan State University Extension offers homeownership seminars to help potential buyers understand the home buying process.

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