Everything You Need to Know About HUD Section 184 Loans

HUD Section 184 LoanAre you a member of a federally recognized tribe? Did you know that you may be eligible for a Native American home loan?

Section 184 loans are dedicated to providing home loans to the Native American community. Those associated with federally recognized tribes may be eligible for a section 184 Indian home loan.

This article brings you insight into what a Section 184 loan is, the requirements, eligibility, loan terms, and much more.

What Is a HUD Section 184 Mortgage Loan Program?

Created by Congress in 1992, the HUD Section 184 loan program increases the homeownership opportunities to Native Americans, tribally designated housing entities, Indian housing authorities, and tribes. It is a guaranteed mortgage loan program available through private financial institutions. The loans are guaranteed by the Office of Loan Guarantee within HUD’s Office of Native American Programs.

What Is the Down Payment?

Since the Office of Native American Programs backs the loans, section 184 has a pretty low down payment. It is 2.25% for loans above $50,000 and 1.25% for loans under $50,000. This money can be from your investments, savings, or a gift from a family member.

Is a Section 184 Loan an FHA loan?

Section 184 is a HUD (U.S. Department of Housing and Urban Development) loan and not an FHA (Federal Housing Administration) loan. However, both the loans share the same loan attributes and requirements.

How Does a Section 184 Loan Work?

A Section 184 loan works in two ways:

Tribal Trust Land: The BIA or HUD sets the home or land as a leasehold estate upon approval. This makes the property a leased entity while the loan is repaid and ten years after the last payment. In case of a foreclosure, the lender seizes the lease instead of the home.

Allotted Trust Land: The individual holds allotted trust land and does not need approval for a leasehold estate. However, the BIA and HUD should approve the loan application. In case of a foreclosure, the lender seizes the home.

To ensure that the land remains within the tribe, the lender offers the lease or the land to the tribe or an eligible member of the tribe or the Indian housing authority.

Section 184 Loan Requirements

To be eligible for the section 184 Indian home loan guarantee program, you must be a currently enrolled member of a federally recognized Native American tribe. In the case of individual buyers, the loan applies for owner-occupied properties. The occupancy requirement doesn’t apply for tribally designated housing entities, Native American housing authorities, or tribes.

  • Approval Process – The loan approval process depends on the lender. It uses a more flexible, human-based approach.
  • Credit Score – It doesn’t have a minimum credit score/credit history requirement making it easy for eligible, credit-challenged borrowers. However, lenders are required to verify the borrower’s employment for the prior two years.
  • Borrower Debt-to-Income Ratio – The typical DTI ratio is 41%. However, the ratio can be higher if the borrower has a solid financial profile.
  • Borrower Income Limit – There are no borrower income limits.

Loan Terms of Section 184

Section 184 is fixed-rate financing with a market rate of interest.

  • Max Loan Amount: 150% percent of the FHA lending Limits for the Area
  • Prepayment Penalties: None
  • Max Loan Length: 30 Years or Less

Section 184 Loan Interest RateInterest Rate on a 184 Loan Program

One of the advantages of a section 184 loan is that the interest rates are based on the market rate, no matter the credit score.

How Do I Apply for a Section 184 Loan?

Section 184 loan has to be applied through a list of lenders preapproved by HUD.

How Do I Qualify for a Native American Home Loan?

To qualify for a Section 184 loan, you need to be an American Indian or Alaska Native member of a federally recognized tribe. In addition, the property must meet FHA construction and safety codes. Furthermore, it must be the primary residence of the applicant and is not applicable for second homes.


Section 184 loans are a one-of-a-kind way for Native Americans to buy a home. However, not all lenders are approved for offering this type of loan. The loan benefits include low interest rates, low down payments, mortgage insurance benefits, flexible underwriting, etc.

Since the loan is not dependent on the credit score, the applicants qualify for more financial assistance. However, to be eligible for the loan, you need to be a member of a federally recognized tribe.

These loans can be used on and off trust lands for:

  • Purchase of an existing home
  • Home improvements
  • New construction
  • Refinancing

Altitude Home Loans LogoThe people at Altitude Home Loans bring many decades of experience in doing loans the right way. If you are interested in purchasing a home, contact one of our Loan Officers today and we’ll guide you through the Home Loan application process. You’ll be glad you did.


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