Page 12 - Chehalis Tribal Newsletter - January 2015
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Photos of Breakfast with Santa How the New Proposed Changes to the Section
184 Loan Program Could Effect Home Owners

By James Gutierrez, CTHA Housing Director

HUD recently introduced new fees for recipients of loans through
the Section 184 loan program. Traditionally, loan origination fees
are used to cover the administrative expenses of writing a loan.
These expenses typically include loan application processing,
credit checks, loan document development, etc. HUD relies on their
partners to complete most of these tasks.

According to the Federal Register Volume 79, Number 194
published on October 7, 2014, HUD uses this fee to “reduce the
amount of appropriations needed to support the program, and
together with appropriations are used to fulfill obligations of the
Secretary.” To me, this means that HUD is using this fee to cure a
budget deficit for the program. In April of 2014, HUD increased
their fee from 1% to 1.5%. According to the same Federal Register,
the average mortgage for the Section 184 loan program is $175,000.
This would increase the loan fee for the average borrower from
$1,750 to $2,625. This is an increase of $875 on the average loan.

What is the Section 184 Loan Guarantee Program?

The Section 184 Indian Home Loan Guarantee Program is a home
mortgage specifically designed for American Indian and Alaska
Native families, Alaska Villages, Tribes, or Tribally Designated
Housing Entities. Section 184 loans can be used, both on and off
native lands, for new construction, rehabilitation, purchase of an
existing home, or refinance.

This program is a powerful tool for helping Native Americans to
become homeowners without a lot of money out of pocket and
with a low monthly payment. It is my understanding that HUD has
imposed a higher loan funding fee and a monthly fee that would act
as private mortgage insurance (PMI). Because of the unique status of
Indian lands being held in Trust, Native American homeownership
has historically been an underserved market. Working with an
expanding network of private sector and tribal partners, the Section
184 Program endeavors to increase access to capital for Native
Americans and provide private funding opportunities for tribal
housing agencies with the Section 184 Program.

For more information contact James Gutierrez at 360-273-7723 or

or go to National Indian Housing Council website at

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