Home loan programfor American Indians

May 28, 2008 12:00 am

The local Yurok Alliance for Northern California Housing and Community Development Financial Institution (CDFI) can now generate home loans.

The Yurok Alliance is the first CDFI to be granted the ability to do Section 184 home loans in the country.

The Section 184 Indian Home Loan Guarantee Program is a mortgage product specifically for American Indian and Alaska Native families, Alaskan villages, tribes, or tribally designated housing entities. Congress established this program in 1992 to facilitate homeownership in Native American communities.

With Section 184 financing, buyers can get into a home with a low down payment, no mortgage insurance and flexible underwriting. Loans over $50,000 require a down payment of 2.25 percent or $11,250.

There is no monthly mortgage insurance premium each month. Instead, a one-time, one percent loan guarantee fee can be added to the final loan amount.

This loan can help with the purchase of an existing home, single-close construction loans for a stick-built or a manufactured home on a permanent foundation, rehab loans and purchase and rehab.

Eligibility is limited to single-family housing (1-4 units), and fixed-rate loans for 30 years or less. Section 184 loans cannot be used for commercial structures or with Adjustable Rate Mortgages (ARMs). Tribes, TDHEs or IHAs can borrow funds to develop rental housing or to build single-family homes that are subsequently sold (or assumed) by eligible borrowers.