Carrington Mortgage Services is introducing Section 184 Loans for Native Americans for its retail lending customers.
“The Section 184 Loan is a great product, in part because the costs are low when compared to other loan programs,” says Greg Austin, executive vice president, lending, for Carrington Mortgage Services, in a release. “They’re becoming more and more popular as Native Americans realize there’s a specific product out there designed for them – especially on tribal land.”
The Section 184 Loan Guarantee Program was created by the U.S. Department of Housing and Urban Development’s (HUD) Housing and Community Development Act of 1992 to address the lack of mortgage lending for Native Americans and Alaskan Native tribal members.
According to HUD, Section 184 loans are available to American Indians or Alaska Natives who are enrolled members of a federally recognized Tribe, Alaska Village or Regional Corporation.
These home loans are guaranteed 100% by the Office of Loan Guarantee within HUD’s Office of Native American Programs to encourage lenders like CMS to provide mortgage loans to Native Americans.
For a home loan on tribal trust land, eligible borrowers lease the land from the tribe for 50 years. Currently, Section 184 home mortgage loans are fully available in 24 states, including Oklahoma, Arizona, Colorado, Kansas, New Mexico and Utah. In 14 states, including Texas, New York and Connecticut, the loans are only available in certain counties and cities.
Loans offered through this program require a low minimum down payment – generally 2.25%, or as low as 1.25% for loans of less than $50,000.
In addition, the program utilizes a hands-on approach to underwriting and approval, as opposed to using automated decision-making tools.
For loans closed on or after July 1, 2023, there is no longer an Annual Loan Guarantee Fee. Section 184 loans can only be used for single-family homes (1-4 units) and for a primary residence.
“In certain cases, Native American homeowners may use gift funds or benefit from approved closing cost assistance programs,” Austin says. “This program can really help a qualifying customer purchase or refinance a home more easily. It is important that Native Americans have equal access to the American dream of homeownership; and at Carrington, we are proud to help these deserving homeowners find a great home using a program created for their unique needs.”