The following key program policies and requirements are discussed in more detail in the processing chapters that follow this introductory chapter.
| 1. | Single family residential loans made by eligible lenders to eligible borrowers. Commercial structures are not eligible under the Section 184 Program. |
| 2. | 100 percent of the outstanding principal and interest and payment of other necessary and allowable expenses. |
Loans that are otherwise insured or guaranteed by the federal government are not eligible for the Program.
| 1. | An Indian or Alaska Native who will occupy the property as a principal residence and who has met the credit and underwriting standards specified in this handbook. |
| 2. | An Indian Housing Authority/Tribally Designated Housing Entity. IHAs/TDHEs may borrow funds to develop single-family homes that are subsequently sold to eligible borrowers or to create IHA/TDHE-owned rental housing. |
| 3. | An Indian tribe. As with IHAs/TDHEs, tribes may borrow funds to develop single-family homes that are subsequently sold to eligible borrowers or to create tribal owned rental housing. |
| 4. | While tribally held fee simple land may be readily encumbered, there are special considerations which need to be addressed when the tribal borrower intends to encumber tribally held trust land as security for the loan. Tribes are encouraged to contact the Program ONAP when they are considering applying for Section 184 guaranteed loans for additional guidance on these issues. |
| c. | Participating Lenders. Lenders must be: |
| 1. | Approved by the Secretary of Housing and Urban Development, the Secretary of Agriculture, or the Secretary of Veterans’ Affairs; or |
| 2. | Supervised, approved, regulated, or insured by any agency of the federal government. |
| d. | Eligible Activities. Eligible borrowers may use the guarantee program for the: |
| 1. | Acquisition of existing housing. |
| 2. | Rehabilitation of existing housing. |
| 3. | Acquisition and rehabilitation of existing housing. |
| 4. | Construction of new housing units. |
Loan guarantees for commercial structures are not eligible under the Section 184 program.
| 1. | The term of the loan may not exceed 30 years. |
| 2. | Interest rates established by the lender must reflect current market rates and cannot be adjustable. |
| 3. | Maximum mortgage amounts are set based on an established loan-to-value ratio and the borrower’s debt to income ratio, and, in no case, can these mortgage amounts exceed 150 percent of the FHA (HUD’s Federal Housing Administration) mortgage limit established for the locality. |
| f. | Property Requirements. Properties must be: |
| 1. | Located on land that is either trust/restricted or within the operating area of an IHA/TDHE or tribe (called an "Indian area"). |
| 2. | Standard quality and must meet applicable construction and safety codes. In addition, homes must be modest in size and design. |
| 3. | Single family structures (one to four units). Multifamily housing is not permitted. |
| g. | Alienation Policy. Section 184 properties may change ownership as a result of a voluntary assumption, a voluntary sale by the homeowner, or due to a default. |
| 1. | Voluntary Transactions: |
| § | Eligible borrowers (Native Americans, IHAs/TDHEs and Indian tribes) may assume a Section 184 guaranteed loan. Any prospective borrower must qualify for the loan based upon both income and credit. |
| § | Owners of Section 184 properties on tribal trust land may voluntarily sell their home. However, the tribe has the right to review and approve the leasehold securing the property and thus may reject certain buyers based on tribal law. |
| § | Owners of Section 184 guaranteed properties on fee simple or allotted land may voluntarily sell their property. |
| § | On tribal trust land and allotted trust land, neither HUD nor a lender may sell a defaulted property to a non-Native American (24 CFR 1005.107(b). |
| § | Defaulted fee simple properties may be sold to any purchaser or may be assumed by an eligible Native American borrower. |
| h. | Secondary Mortgage Market. Mortgages guaranteed under Section 184 may be sold in the secondary market. |
