1. SECTION 184 INDIAN HOUSING LOAN GUARANTEE PROGRAM
U.S. Department of Housing and Urban Development L-

2. Section 184 Training, Sponsored by HUD
PROGRAM OVERVIEW
1992 Housing and Community Development Act
Annual funding by Congress
Nationwide Program
What is the Section 184 Program? Why do we need it?
Section 184 Training, Sponsored by HUD L-

3. Section 184 Training, Sponsored by HUD
Guaranteed Loans
Section 184 Training, Sponsored by HUD

4. LENDING IN INDIAN COUNTRY IS UNIQUE
Land status
Tribal Trust Land
Allotted Trust Land
Unrestricted Land
Underserved markets
Non-traditional credit
Limited access/exposure to financing
Manual underwriting
Section 184 Training, Sponsored by HUD

5. LENDING IN INDIAN COUNTRY IS UNIQUE
Section 184 Training, Sponsored by HUD

6. Section 184 Training, Sponsored by HUD
184 PARTNERS
HUD 184 Program Staff
Lenders
Tribes
TDHEs (Tribally Designated Housing Entities)
BIA (Bureau of Indian Affairs)
Section 184 Training, Sponsored by HUD L-

7. LENDER INCENTIVES/ OPPORTUNITIES
100% guaranteed loan
Assign or foreclose
Up to 2.5% loan origination fee on construction/rehab loans
Community Reinvestment Act (CRA)
Section 184 Training, Sponsored by HUD L-

8. Section 184 Training, Sponsored by HUD
On Reservation
Section 184 Training, Sponsored by HUD

9. PARTNER ROLES AND RESPONSIBILITES
Section 184 Training, Sponsored by HUD

10. Section 184 Training, Sponsored by HUD
WHAT DOES OLG/HUD DO?
Develops and implements policies
Conducts training and marketing
Underwrites the loan
Issues the Loan Guarantee Certificate
Section 184 Training, Sponsored by HUD L-

11. Section 184 Training, Sponsored by HUD
WHAT DOES THE LENDER DO?
Lends the money!
Explains the 184 mortgage loan process and prepares the loan package
Serves as liaison between borrower and HUD
Underwrites the loan (Direct Guarantee approved)
Section 184 Training, Sponsored by HUD L-

12. Section 184 Training, Sponsored by HUD
ELIGIBLE LENDERS
Bank, Savings & Loan, Credit Union
Mortgage Companies approved through FHA, VA or RD
FHA approved Brokers with 184 Program Sponsorship
Lenders/Tribe obtain approval through NAHASDA
Section 184 Training, Sponsored by HUD L-

13. Section 184 Training, Sponsored by HUD
WHAT DOES THE TRIBE DO?
Implements foreclosure, eviction, lien & leasing procedures
Conducts environmental reviews
Completes land status form
Section 184 Training, Sponsored by HUD L-

14. WHAT DOES THE TRIBE PROVIDE?
Land
Homeownership counseling
Financial Assistance
Infrastructure
Section 184 Training, Sponsored by HUD L-

15. Section 184 Training, Sponsored by HUD
WHAT DOES BIA DO?
Serves as a trustee for tribal trust land
Approves lease/mortgage
Provides/updates title status reports
Records mortgage/lease
Underwrites/reviews loan package (if allotted/restricted)
Section 184 Training, Sponsored by HUD L-

16. PROGRAM FEATURES AND REQUIREMENTS
Section 184 Training, Sponsored by HUD

17. Who can apply for a 184 Loan? ELIGIBLE BORROWERS
Indian or Alaska Native individual enrolled in a Federally recognized tribe. Enrollment verification mandatory.
TDHE/IHA (Indian Housing Authority)
Tribe. Tribal federal designation available on Federal Register
Section 184 Training, Sponsored by HUD L-

18. Section 184 Training, Sponsored by HUD
LOAN FEATURES
Term: 30 years or less
Fixed interest rate determined by lender
1% guarantee fee
Minimal down payment requirement
No Adjustable Rate Mortgages
No commercial structures
Section 184 Training, Sponsored by HUD L-

19. HOMEOWNERSHIP OPPORTUNITIES
Purchase a house
Rehabilitation of existing house
Purchase and rehabilitation
New construction
Manufactured
Modular/stick built
Refinancing
Section 184 Training, Sponsored by HUD L-

20. PROPERTY REQUIREMENTS
Trust land or land within an Indian area
Single family (1-4 units)
Examples include: house, duplex,
tri-plex, four-plex, town home, manufactured/modular home
Manufactured Housing
Affixed to a permanent foundation
Manufactured after 6/15/76
Section 184 Training, Sponsored by HUD L-

21. Section 184 Training, Sponsored by HUD
LAND OWNERSHIP
Tribal trust land
Allotted individual trust land
Fee simple land in a defined Indian operating area
Section 184 Training, Sponsored by HUD L-

22. Section 184 Training, Sponsored by HUD
LAND
Tribal Trust Land
Land or interest in land held in trust by BIA for a Tribe
Land may not be encumbered or alienated
Leasehold interest established for a 50 year term
No land value
Section 184 Training, Sponsored by HUD L-

23. Section 184 Training, Sponsored by HUD
LAND
Allotted Individual Trust Land
Land or interest in land held in trust by the BIA for an individual Indian
Tribe has no interest in land
Subject to restrictions against alienation or encumbrance
Land value/equity
Section 184 Training, Sponsored by HUD L-

24. Section 184 Training, Sponsored by HUD
LAND
Fee Simple Land
Estate in land that is absolute or unrestricted
Owner can dispose of land
Subsequent sale of home and/or foreclosure; land and home sold together
Located on reservation or within Tribe’s operating area for housing
Section 184 Training, Sponsored by HUD L-

25. LOAN PROCESS FOR TRUST TRANSACTIONS
Section 184 Training, Sponsored by HUD

26. LOAN PROCESS For TRUST TRANSACTIONS
Land status verified with tribe and/or BIA:
Title Status Report needed to verify individual allotment ownership
Land Status and Jurisdiction Form
Section 184 Training, Sponsored by HUD L-

27. LOAN PROCESS For TRUST TRANSACTIONS
Documentation required from the Bureau of Indian Affairs
Tribal Trust
Certified TSR (1 years or less) with/without recorded lease
Executed lease
Section 184 Training, Sponsored by HUD L-

28. LOAN PROCESS For TRUST TRANSACTIONS
Underwriting the Title Status Report (Cont.)
Individual Allotted Trust land
Certified TSR (6 months or less)
BIA approval to mortgage
Individual Allotted Trust Land with lease
Title Status Report with recorded lease
NO BIA approval to mortgage
Section 184 Training, Sponsored by HUD L-

29. SECTION 184 LOAN PROCESSING Section 184 Training, Sponsored by HUD

30. Section 184 Training, Sponsored by HUD
LOAN ORIGINATION
Borrower contacts approved lender
Lender determines if borrower meets program eligibility
Native American (ID/Enrollment Card)
Tribe on 184 approved list
Indian operating area
Lender requests case number from HUD (funds reservation)
Section 184 Training, Sponsored by HUD

31. Underwriting Components
Credit
Capacity
Collateral
The underwriting review determines the borrower’s ability and willingness to repay the mortgage debt.
Section 184 Training, Sponsored by HUD

32. Underwriting Components
The borrower’s ability to repay the debt is assessed by considering:
Income history and stability;
Employment history and stability
Debts
The borrower’s willingness to repay the mortgage debt is assessed by considering
Credit
Pay history
Section 184 Training, Sponsored by HUD

33. Section 184 Training, Sponsored by HUD
INCOME
Income - Types:
Salary or Wages
Overtime and Bonus
Commissions
Seasonal and Part Time
Retirement, Alimony, Child Support
Rental
Trust and Non-Taxable
Self Employment
Tribal Distribution
Section 184 Training, Sponsored by HUD

34. What are we looking for? CREDIT HISTORY
Show borrower(s) payment pattern
Show previous/existing debt
Show court order judgments, collections and liens which may affect borrower’s ability to obtain a loan
Note: Lack of Credit is not basis for denial
Section 184 Training, Sponsored by HUD L-

35. Section 184 Training, Sponsored by HUD
CREDIT REVIEW (Cont.)
Credit Requirements:
No late payments within 12 months
No late mortgage payments within 12 months
No bankruptcy, judgments in 24months (special circumstances reviewed on case by case basis)
No accounts reverting to collection in 12 months
Lack of credit not grounds for rejection; alternative credit accepted; 1 to 3 sources.
Section 184 Training, Sponsored by HUD

36. BORROWER’S INVESTMENT
Cash investment — difference between the mortgage loan and the cost to acquire the property
Range of investment — 1.25% to 2.25% based on maximum mortgage limit
Section 184 Training, Sponsored by HUD L-

37. Section 184 Training, Sponsored by HUD
FUNDS TO CLOSE
Borrower can obtain the down payment and closing cost funds from any of the following sources:
Saving/Checking
Secured funds
Gifts
Cash
Land equity
Sale of personal items
Sale of home proceeds
401K loan
Sale of Investments
Section 184 Training, Sponsored by HUD L-

38. TRIBE/TDHE ASSISTANCE
Provide a gift or loan to borrower:
Gift letter
2nd mortgage letter
Recorded documents with the endorsement package
Tribal funds:
No restriction on use/amounts
Section 184 Training, Sponsored by HUD L-

39. Section 184 Training, Sponsored by HUD
APPRAISAL
Market Approach
Using FHA appraiser/guidelines
Cost Approach
Trust land, rural areas
Types of Appraisals
Manufactured
Condominium
Standard 1 – 4 Units
Section 184 Training, Sponsored by HUD

40. THE TRIBE OR TDHE AS BORROWER Section 184 Training, Sponsored by HUDL-

41. Section 184 Training, Sponsored by HUD
UNDEVELOPED MARKETS
Limited Housing Supply
Low turnover, vacancy rate
Limited availability of developed lots
Limited sales
Modest homes
Tribal developers
Financing generally grant based
Limited exposure/access to financial markets
Subsidies
Construction (grants, guarantees, interest rate)
Down payment & closing costs
Section 184 Training, Sponsored by HUD

42. Section 184 Training, Sponsored by HUD
TRIBE/TDHE LOANS
When the Tribe or TDHE borrowers for the construction/purchase of rental property, they must demonstrate:
Property management skills
Rental and maintenance plan
Renters able to pay
Section 184 Training, Sponsored by HUD L-

43. Section 184 Training, Sponsored by HUD
New Construction
Section 184 Training, Sponsored by HUD

44. TRIBE/TDHE LOANS (Cont.)
These properties are eligible for assumption by qualified borrowers:
Tribe/TDHE pays cash investment and loan payments during construction
Qualified Borrowers able to assume
After qualifying assumption, Tribe or TDHE is released from liability
Section 184 Training, Sponsored by HUD L-

45. TRIBE/TDHE LOANS(Cont.) Financial Capacity
Demonstrated ability to pay mortgage loan:
Credit History (Dunn & Bradstreet)
Sources of funds to close
Income
Liabilities
Section 184 Training, Sponsored by HUD L-

46. TRIBE/TDHE LOANS (Cont.)
Coverage of debt service
Skills, experience to undertake project
Demonstration of need
Marketing plan
Audited financial statements
Section 184 Training, Sponsored by HUD L-

47. TRIBE/TDHE LOANS (Cont.)
Evidence of authority to borrow
Evidence of ability to obtain deficiency judgment
Plans for projects exceeding 20 homes must be built in phases
Section 184 Training, Sponsored by HUD L-

48. 184 SINGLE CLOSE CONSTRUCTION LOANS
Section 184 Training, Sponsored by HUD

49. Section 184 Training, Sponsored by HUD

50. CONSTRUCTION LOAN OPTIONS
2 options available to borrowers:
Lender or Bank carries interim construction loan
184 loan used to payoff construction loan; not closed or guaranteed until after house is complete
184 single close construction loan
Section 184 Training, Sponsored by HUD L-

51. SINGLE CLOSE CONSTRUCTION LOAN
One time Single Close
Construction starts within 60 days after closing
Mortgage payments begin after closing
6 month construction period
Guarantee issued after closing
Section 184 Training, Sponsored by HUD L-

52. SINGLE CLOSE REHAB LOANS
Acquisition or existing debt + improvements can’t exceed program LTV requirements
$10,000 + of improvements required for eligibility
Appraisal requirements or borrower’s wish list allowable.
Luxury items and items not a permanent part of the property are not eligible
Section 184 Training, Sponsored by HUD L-

53. Section 184 Training, Sponsored by HUD
REFINANCES
Section 184 Training, Sponsored by HUD L-

54. Section 184 Training, Sponsored by HUD
TYPES OF REFINANCES
Streamline refinances (existing 184 loans)
With or without an appraisal
With or without credit qualifying
Cash out with an appraisal and credit qualifying
No cash out with an appraisal and credit qualifying
Section 184 Training, Sponsored by HUD

55. Section 184 Training, Sponsored by HUD
LOAN CLOSING
Section 184 Training, Sponsored by HUD

56. Section 184 Training, Sponsored by HUD
ENDORSEMENT PACKAGE
Received within 60 days after closing
Reviewed
184 required documents
Commitment conditions
Closed as underwritten
Late endorsement (more than 60 days after closing)
Special processing requirements , fees may apply
Section 184 Training, Sponsored by HUD L-

57. Section 184 Training, Sponsored by HUD
LOAN SERVICING
Protecting HUD’s interest
File retention (life of mortgage + 3 years)
Escrow accounts
Notification of servicing change
Section 184 Training, Sponsored by HUD L-

58. FORECLOSURE OR ASSIGNMENT
Option to foreclose or assign
100% payment
Claim submission
Section 184 Training, Sponsored by HUD L-

59. Section 184 Training, Sponsored by HUD
SECONDARY MARKETS
Ginnie Mae
Fannie Mae
Freddie Mac
Local Markets
Section 184 Training, Sponsored by HUD L-

60. Section 184 Training, Sponsored by HUD
THANK YOU!
More information on the 184 program:
HUD/Office of Native American Programs
Toll Free:
Do not use or alter without permission of author, Deanna Lucero, NONAP, OLG, HUD
Section 184 Training, Sponsored by HUD L-