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HUD Seeks to Expand Homeownership for Native American Families

The U.S. Department of Housing & Urban Development (HUD) has proposed a rule for the Section 184 Indian Home Loan Guarantee Program, which will looks to modernize the program regulations and encourage homeownership opportunities in Indian Country.

The proposed rule expands and revises the existing program regulations, and will codify program requirements, while introducing much needed clarity for participating lenders. In addition, the proposed rule will increase homeownership opportunities for Native American families by providing a federal guarantee on qualifying loans in the event of default and authorize HUD to establish a minimum level of lending on trust land.

Often referred to solely as the Section 184 Program, the Indian Home Loan Guarantee Program is a home loan product created for American Indian and Alaska Native individuals and families; Alaska villages; Tribes; and tribally designated housing entities (TDHEs). Section 184’s underwriting requirements, low downpayment, and reduced fees make the program more accessible to Native borrowers.

“Homeownership can be a powerful wealth building tool, and that’s why HUD is proposing updates to the Indian Home Loan Guarantee Program to create more homeownership opportunities for Tribal communities,” said HUD Secretary Marcia L. Fudge. “By setting requirements, attracting more lenders, and setting a minimum standard of lending, we are taking steps to make homeownership a reality for American Indian and Alaska Native individuals and families. Today’s proposed rule is a part of the Biden-Harris Administration’s commitment to strengthening the Nation-to-Nation relationship with Tribes and making equitable investments in Indian Country.”

Highlights of HUD’s proposed rule include:

  • Outlining of the requirements for Tribal participation in the Section 184 program.
  • Outlining of the requirements for eligible borrowers, eligible properties, and loan types for the Section 184 program.
  • Outlining of the requirements for mortgage servicers to service Section 184 loans and the loss mitigation required when a loan is in default.
  • Outlining claim types and requirements to submit claims to HUD.
  • Outlining of HUD’s ability to conduct periodic performance reviews, reporting requirements for lenders and servicers, and sanctions for noncompliance with regulations.

During the Biden-Harris Administration, HUD has supported Tribal Nations and their communities through:

  • The creation of the first-ever Housing & Urban Development Tribal Intergovernmental Advisory Committee.
  • Efforts to increase homeownership opportunities in Indian Country.
  • Expansion of tribal HUD-Veterans Affairs supportive housing.
  • Providing more than $220 million to tribal communities for affordable housing and community development.
  • Investing in community relationships and ensuring equitable housing.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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