The Department of Housing and Urban Development's mission is to increase homeownership, support community development and increase access to affordable housing free from discrimination. HUD fulfills this mission through high ethical standards, management and accountability, and by forming partnerships with community organizations.
The first loan was guaranteed on March 1, 1995. As of September 30 2007, 5,051 loans totaling $664,841,253 had been guaranteed (cumulative over life of program).
Uses and Use Restrictions
Mortgage loans are for the acquisition or rehabilitation of existing homes, purchase and rehabilitation of a home or construction of a new home; and refinancing of existing debt (FY 03).
The financial institution which originates the mortgage loan must meet certain requirements noted in the law.
The loan applicant must be members of a federally recognized Indian tribe, band or community, which includes Native Americans, Alaska Natives, or an Indian Housing Authority including a Tribally Designated Housing Authority (TDHE) or a Tribe which meets certain requirements.
Applicant eligibility is validated by current enrollment in a federally recognized tribe.
The homeowner is the ultimate beneficiary of the program. When the Indian Housing Authority, TDHE or Tribe is the homebuyer, they may then rent the property. In these cases, the person renting the home would be an indirect beneficiary.
Loan applicants must provide the lender with documentation on eligibility, assets, income, debts and liabilities to show ability to obtain and repay the mortgage loan.
Aplication and Award Process
A Tribe must develop eviction, foreclosure, and priority of lien procedures and adopt a residential mortgage lease acceptable to HUD and the BIA for any property on trust land within their jurisdiction to be eligible for this program.
The loan applicant must find an existing property or a builder to construct a home.
The proposed home site must be in an Indian area as defined in the statute.
This program is excluded from coverage under E.O.
Applications are submitted to eligible financial institutions. With the loan application, the homebuyer must submit documentation such as pay stubs, W-2 forms (income tax returns if self-employed), evidence of assets such as bank accounts, and any other documentation requested by the lender to support the applicant's ability to obtain and repay the mortgage. The lender verifies the land status of the proposed property.
The financial institution obtains and reviews all documentation and forwards it to HUD's Office of Native American Programs. HUD sends the Section 184 Loan Guarantee Firm Commitment Form to the Lender, if the mortgage meets the Section 184 Program underwriting criteria. The financial institution is responsible for assuring Tribal eligibility, land status, property acceptability and the creditworthiness of the loan applicant. HUD has responsibility for the approval or disapproval of the loan (the application for loan guarantee). Eligible lenders may originate loans under the Direct Guarantee Program. Direct Guarantee lenders underwrite, approve and close the loan prior to submission to HUD for the Loan Guarantee Certificate.
Housing and Community Development Act of 1992, as amended; Public Law 102-550; 106 Stat. 3739; 12 U.S.C. 1515z-13a.
Range of Approval/Disapproval Time
There are no specific time requirements for the processing of these loans.
Applicants whose loans are disapproved may appeal the disapproval if the applicant can provide additional documentation to resolve the issues which lead to the disapproval.
Formula and Matching Requirements
The loan amount is calculated based on 97.75 percent of the appraised value of the property if over $50,000 and 98.75 percent if the property is valued at or under $50,000. The applicant must have sufficient assets in cash (or their equivalent) to make the downpayment. The applicant's total debts (including the mortgage loan) should not exceed 41 percent of their income (unless valid compensating factors are presented).
Length and Time Phasing of Assistance
The term of the loan cannot exceed 30 years. The processing time varies from time of application to the time the loan closes, but in general will average from 30 to 120 days unless there are significant land issues; then 6 to 12 months is possible.
Post Assistance Requirements
Participating financial institutions must provide HUD with copies of loan files and must report to HUD on the status of the loan, once it has closed.
Participating lenders, and closed loan files, are reviewed to assure compliance with the program's requirements.
Copies of loans files are maintained by HUD. The lender that originates the loan must maintain a copy of the loan file for 2 years after loan closing. The lender that services the loan must maintain the loan file for the life of the loan plus 3 years.
(Loans guaranteed/commitment level) FY 07 $235,074,000; FY 08 est $367,000,000; FY 09 est $367,000,000.
Range and Average of Financial Assistance
The average loan amount in FY 2007 was $168,009.
Regulations, Guidelines, and Literature
24 CFR Part 1005; a Guidebook and literature is available from HUD's Office of Native American Programs.
Regional or Local Office
None. Inquiries should be addressed to the Headquarters Office below.
Thomas C. Wright, Director, Office of Loan Guarantee, Office of Native American Programs, 451 Seventh Street, S.W., Room 4126, Washington, DC 20410. Telephone: (202) 402-4978, or toll-free, (800) 561-5913.
Criteria for Selecting Proposals