What's New
Dear Lender Letter 2023-08- OLG FY23 Year End Closure
This Dear Lender Letter (DLL) informs Lenders and other stakeholders of the start of HUD’s FY 2023 financial closeout for the Section 184 Indian Home Loan (Section 184), the Section 184A Native Hawaiian Home Loan (Section 184A) and the Title VI Loan Guarantee (Title VI) programs.
Select a Topic
Program Overview
Program Highlights
The Title VI Loan Guarantee Program is authorized by the Native American Housing Assistance and Self Determination Act of 1996, as amended (25 U.S.C. 4101 et seq.), (NAHASDA<), in accordance with the Code of Federal Regulations at 24 CFR Part 1000. A guarantee by HUD, made under Title VI of NAHASDA guarantees repayment of 95 percent of the unpaid principal and interest due on the notes or other obligations guaranteed.
The Title VI Loan Guarantee program allows recipients of Indian Housing Block Grant Funds to use current and future fund allocations as a means of leverage to obtain HUD guaranteed financing. As a borrower, tribes, Alaska Native Villages or TDHEs (with tribe approval) will collaborate with an approved lender to prepare and submit required documents for HUD review. Once approved, HUD will provide the lender with the loan guarantee and the borrower can start the intended project. Obtaining a Title VI guaranteed loan permits borrowers to develop their project at today's cost; avoiding the need to save funds over several years and incurring the risk of potential cost increases.
Proceeds from a Title VI guaranteed loan may be used to:
- Create new housing
- Rehabilitate housing
- Build infrastructure
- Construct community facilities
- Acquire land to be used for housing
- Prepare architectural & engineering plans
- Fund financing costs
The maximum loan amount HUD will guarantee and that a tribe/TDHE can borrow is approximately five times the need portion of the annual IHBG allocation. There is no minimum loan size. Click here. to view an example of how leveraging increases the borrowers loan amount.
A tribe/TDHE must repay its Title VI loan. However, the repayments may be stretched to 20 years. As the amortization period increases, the annual debt service payments decrease. If a tribe/TDHE fails to repay the debt and a default is declared, HUD will make the loan payments to the lender. HUD will then seek reimbursement from the borrower’s pledged funds. Click here to view an example of a repayment schedule.
- Log in to post comments