How does the HUD Section 184 work?

Maybe you have heard about the Section 184 loans but have no idea of not only what it is but also how it works. The good thing is that by the end of this article, you will have received the relevant knowledge on the same. Also, you will learn about the eligibility for the loan, the much you can borrow, and what the loan can be used for.

A quick overview

The HUD 184 loans program was established in 1992 with the aim of improving access to the home loans for the American Indian, natives and tribes. The point was to have as many people from the fore mentioned communities own homes and increase their living standards. Among the things focused on including a low down payment and flexible and favorable underwriting. It is worth noting that the loan can be used both on and off the native lands.

How HUD Section 184 Works

Once an eligible borrower shows interest in getting access to finance under the Section 184 loan program, they are supposed to approach the HUD offices and present their papers. One of which will be a verification of belonging to the tribe, or Alaska Village among other applicable communities for that matter. They then work with the tribe as well as the Bureau of Indian Affairs when leasing of land is required.

After the lender assesses the provided documents, the loan can be granted with either of the following arrangements:

Tribal Trust Land

The borrower will have to contact the HUD and the BIA to put the land or home into a lease after approval. The property remains as a leased entity while the individual repays the mortgage including 10 years after the final repayment. In the instance of a default, the lease is seized instead of the land.

Allotted Trust Land

When an individual’s or tribe’s land is in question, the borrower seeks approval from the HUD and the BIA to put it to lease. Should there be default in repayment, the lender has to follow set guidelines to recover their money. This involves selling the property to either the Indian Housing Authority or a member of the tribe to make sure that the land remains in the community.


Another important thing to note is that not everyone is eligible for the Section 184 loans program. It was reserved for specific groups of people including:

  • Indian tribes recognized by the federal
  • Alaska Natives or American Indians belonging to a federally recognized tribe
  • Indian Housing Authority (IHA) among other tribally designated housing entities

How much can you borrow under the Section 184 program?

A number of factors have to be taken into consideration when determining the much you can borrow. Such include where you live at the moment of application for the loan, the current debts you owe to other lenders, and the current income. Different lenders treat these factors differently. It is also important to note that you will only be granted the HUD 184 loans if you are going to use for either of the following:

  • Constructing a new home
  • Renovating an existing house
  • Refinancing a home
  • Purchasing a new home
  • Purchasing and renovating an existing home