How to Get an Indian Home Loan (Section 184)

What it is

A Section 184 Indian Home Loan is a loan established by the United States Congress in 1994 that is designed to offer home ownership, property rehabilitation, and new construction opportunities to eligible tribes, Indian Housing Authorities, and Native American individuals and families wanting to own a home on trust land or land located in approved Indian or Alaska Native area. The Indian Home Loan offers a low down payment of 1.25 to 2.25 percent based on the lower of the appraised value or cost to acquire the property. There is also an option to refinance. The maximum loan is 150% of the Federal Housing Administration's mortgage limit, subject to the appraised value and down payment requirements.

The Indian Home Loan has a one percent finance guarantee fee at closing and no private mortgage insurance or monthly premium. It is the lowest cost of any government guarantee or conventional insurance program in Indian country. Monthly mortgage payments begin after closing. At closing, the amount allocated for construction or rehabilitation plus five to 10 percent contingency and up to six months mortgage payments are placed in an escrow account and are drawn down as the work is satisfactorily completed. The United States Department of Housing and Urban Development offers a 100 percent guarantee to the lender in the event of a foreclosure and claim.

Who it's for

Eligibility for the Indian Home Loan includes projects such as new construction, rehabilitation and purchase of an existing house. There is a qualifying debt to gross income ration of 41 percent which can be exceeded with some compensating factors. Loans may be acquired by creditworthy borrowers that meet program eligibility.

What you need to do to apply

In order to obtain a Section 184 Indian Home Loan, a borrower must contact a local Housing and Urban Development office.

Apply for an Indian Home Loan (Section 184)

Apply online for any type of housing loan at LoanWeb:

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