Today, the U.S. Department of Housing and Urban Development (HUD) announced the release of a proposed rule for the Section 184 Indian Home Loan Guarantee Program, which will 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.
“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.”
Often referred to solely as the Section 184 Program, the Indian Home Loan Guarantee Program is a home loan product that was specifically created for American Indian and Alaska Native individuals and families; Alaska villages; Tribes; and tribally designated housing entities (TDHEs). This program’s underwriting requirements, low down payment and reduced fees make the program more accessible to Native borrowers. While the HUD’s loan guarantee encourages participation in the program by lenders, thereby expanding opportunities to access mortgage capital in Indian Country.
Provisions of the 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 Servicers to service the Section 184 loan 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.
Today’s announcement delivers on HUD’s commitment to Indian Country to invest unprecedented levels of resources and strengthen relationships with Tribes. Yesterday, HUD announced the creation of the first ever Tribal Intergovernmental Advisory Committee which will ensure that a broad range of Tribal voices are included in HUD policy and program discussions. On November 30, the White House will hold its two-day Tribal Nation’s Summit where federal leadership, including HUD Deputy Secretary Adrianne Todman, will have the opportunity to engage with Tribal leaders directly.
To see the full proposal, visit the link.
The proposed rule is open for comments until March 6, 2023. They can be submitted online at www.regulations.gov. Instructions for mailing in comments can be found there as well.
To learn more about HUD’s collaborations with Tribes, visit our Fact Sheet.