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NEW! Dear Lender Letter 2021-03Section 184A Financing of Homes Located on Agricultural and Pastoral Lots on Hawaiian Home Lands

This Dear Lender Letter (DLL) announces policy established by the Office of Native American Programs (ONAP) for the Section 184A Loan Guarantee Program regarding financing of homes located on agricultural and pastoral lots on Hawaiian home lands.

Dear Lender Letter 2021-02 - Extensions for the foreclosure and eviction moratoriums, loan processing flexibilities, and the Borrower’s ability to request a COVID-19 Forbearance.

The purpose of this Dear Lender Letter (DLL) is to inform Lenders of further extensions for the foreclosure and eviction moratoriums, loan processing flexibilities, and the Borrower’s ability to request a COVID-19 Forbearance. This DLL also broadens Borrower eligibility for COVID-19 Loss Mitigation Options and expands COVID-19 Forbearance periods for certain Borrowers.  The DLL extends the foreclosure moratorium under the Section 184 and Section 184A programs through June 30, 2021.  Continue Reading

Dear Lender Letter 2021-01- Extension of foreclosure and eviction moratorium and loan processing flexibilities in connection with the Presidentially Declared COVID-19 National Emergency.

The purpose of this Dear Lender Letter (DLL) is to inform lenders and servicers of an extension to the foreclosure and eviction moratorium originally issued in DLL 2020-04, extended in DLL 2020-06, DLL 2020-08, DLL 2020- 10, and further extended in DLL 2020-13 for borrowers with Section 184 or Section 184A guaranteed loans for an additional period through March 31, 2021. This DLL also announces an extension of the loan processing flexibilities originally issued in DLL 2020-05; extended in DLL 2020-06, DLL 2020-08, and DLL 2020-10; modified and extended in DLL 2020-12; and further extended in DLL 2020-13 for an additional period through March 31, 2021. This extension will allow industry partners additional opportunity to utilize flexible guidance related to re-verification of employment and appraisal protocols for the Section 184 and 184A programs affected by COVID-19.  Continue Reading

​What is the Section 184 Loan Guarantee Program?

The Section 184 Loan Guarantee Program was created by the Housing and Community Development Act of 1992 to address the lack of mortgage lending in Indian Country. The 184 program offers a 100% loan guarantee.

Why is there a lack of mortgage lending in Indian country?

Much of the land in Indian Country is held in trust by the United States government for the benefit of a particular tribe or individual Native American. Land held in trust for a tribe cannot be mortgaged, and land held in trust for an individual must receive approval from the Bureau of Indian Affairs (BIA), before a lien is placed on the property. Without the ability to mortgage and foreclose on a home or place a lien on individual trust property, lenders were not able to make home loans to individual Native Americans.

How does the Section 184 program address the lack of mortgage capital?

For a home loan on tribal trust land, the eligible individual borrower leases the land from the tribe for 50 years. It is the home and the leasehold interest that are mortgaged. The land remains in trust for the tribe. The Section 184 mortgage is designed to be secured with this Leasehold interest.

How Does Section 184 Work?

The Office of Loan Guarantee within HUD’s Office of Native American Programs guarantees the mortgage loan made to eligible borrowers. The loan guarantee assures the lender that its investment will be repaid in the event of a foreclosure. The borrower pays a 1.5% loan guarantee fee at closing which may be financed in the mortgage. 

Effective December 1, 2016 the new annual premium of 0.25 percent of the remaining loan balance will apply to all new loan guarantees, including refinances. 

The borrower applies for the loan with an approved lender. If leasing tribal land they work with the tribe and the Bureau of Indian Affairs to obtain an approved 50 year lease.

Where can Section 184 loans be used?

Section 184 can be used in 38 states. In fact, as the eligible area continues to expand across the nation, a majority of participating states are eligible in their entirety.  The land located in an eligible Indian area or Alaska Native area (as determined by the participating Tribes) may entail Tribal Trust, Allotted Trust or Fee Simple.

Who Can Use a Section 184 Loan?

Section 184 Loans can be made to the following:

How Can Lenders Become Approved to Participate?

Loans are originated and serviced by lenders that have completed Section 184 training and have met program requirements.  To become a Section 184 lender, submit the Lender Application form to HUD for approval. If you have questions on the requirements or procedures of the approval process send an email to 184lenderapproval@hud.gov.

How are Homes on Native American Lands Appraised?

Home values can be based on Cost or Market basis. On reservation properties, land values are not added into total appraisal values. The HUD FHA 4150.2 handbook (issued May 20, 1999), provides guidance for appraisers on how to appraise existing, proposed and new construction of one to four family homes on tribal trust, allotted and fee simple lands under HUD's Office of Native American Program (HUD/ONAP) Section 184 Loan Guarantee Program.

Are Guaranteed Loans Marketable?

Yes! A Section 184 guaranteed loan, including the security given for the loan, may be sold or assigned by the lender to any financial institution. A strong secondary market exists for Section 184 loans. A growing network of national Lenders as well as Fannie Mae, Freddie Mac, Ginnie Mae, some state housing financing agencies, and some federal home loan banks purchase Section 184 loans.

Lender Training

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ONAP Catalyst is a new cloud-based platform that will build trust and efficiency through reliable and accurate data, facilitating a modern system for participating Section 184/184A direct guarantee lenders and servicers. Access the ONAP Catalyst page now.

Lender Forms

Loan Processing Guidelines

Loan Guarantee Fee Increase